BANGKOK, THAILAND – Thailand’s property market did not show a classic price bubble, but a risky mix of weak demand, high debt and large unsold inventories.
Bangkok diverged from global bubble trend
According to the UBS Global Real Estate Bubble Index 2024, the risk of a property bubble in major world cities had already declined for the second year in a row. High central bank interest rates curbed price excesses and brought markets closer to economic fundamentals. Cities such as Miami and Tokyo still remained in the “high risk” category as property prices there rose much faster than incomes and rents, while the bubble risk in London, Paris and Stockholm clearly moved into the “low” range.
“Silent bubble” in Thailand’s condo sector
In Thailand, the picture was reversed, with the market under pressure, particularly in the housing segment. Industry observers described this as a “silent bubble” because risks were building up in the system without spectacular price surges. Data from the Real Estate Information Center (REIC) showed that the price index for newly built condominiums in Bangkok and surrounding provinces fell by 0.5% year-on-year in the third quarter of 2025, the second consecutive decline, mainly due to a large stock of unsold units, especially in the condominium segment.
Developers push discounts and incentives
To reduce inventories, developers responded with aggressive pricing campaigns. In addition to discounts, they increasingly used promotions offering additional benefits worth up to 44.3% of the purchase price. At the same time, models that provided waivers of property transfer fees became more common.
Debt “credit wall” blocked new buyers
A key obstacle to a sustainable recovery was the so-called “credit wall”. Private households had a debt ratio of around 89–90% of GDP, and the rejection rate for mortgage loans rose to nearly 40%, especially for homes below 3 million baht, one of the largest market segments. The most frequent reasons were incomes that did not meet banks’ requirements and existing liabilities that prevented new borrowing, while even the previously robust high-end segment from 7 million baht showed clear signs of slowing in line with the broader economic downturn.
Different from classic speculative bubbles
This set Bangkok apart from typical bubble markets driven by speculation. Here the problem was a slump in demand triggered by the domestic debt structure rather than runaway prices. Apartments stood empty, prices declined quietly, loans were refused and debts weighed on millions of households, raising questions about whether this signalled a prolonged “ice age” for real estate or a last chance to reshape the system before a real crash.
Government cut fees to support transactions
Hopes for relief came from government stimulus. At the centre was the “Quick Big Win” policy, which reduced transfer and mortgage fees for properties up to 7 million baht to 0.01%. The REIC expected a notable impact in the fourth quarter of 2025, forecasting a 13.1% quarter-on-quarter increase in property transfers nationwide and a 9.5% rise in new loan volumes, although it still anticipated a full-year decline in transfers of about 7.3%, less severe than previously projected.
Lower key rate offered short-term support
In addition, a cut in the policy interest rate to 1.50% was seen as a short-term factor easing buyers’ financing burden and providing at least temporary support to demand. However, this relief did not yet point to a new boom, but rather to a fragile stabilisation phase in a market still struggling with structural debt problems and oversupply.
Cautious outlook for 2026
For 2026, no new real estate boom was in sight, and the sector appeared set to proceed cautiously. Developers had to carefully balance clearing existing projects, potentially postponing new ones and targeting segments with genuine end-user demand. The risk of non-performing loans (NPLs) moved into focus, with an NPL ratio of 4.58% in housing finance, and any further increase expected to heighten the system’s vulnerability.
System risk demands coordinated response
Industry experts viewed this as a systemic task.
“Only through coordinated action by banks, developers and policymakers can it be prevented that today’s fragility turns into a full-blown market shock.”
said industry experts. The overarching goal remained to align the market with real demand so that the current “silent bubble” did not become a long-term burden on the wider economy and financial system.