Thailand's housing market showed signs of recovery in the first quarter of 2026, driven by government stimulus. Transaction volumes rose, but gains in value lagged, highlighting weak purchasing power.
The Government Housing Bank warned that rising energy costs linked to the Middle East war, soft domestic demand, and a pullback in foreign buying could weigh on the sector for the rest of the year.
The housing market is expected to decline slightly in 2026 due to energy costs and inflation. However, government stimulus, extended loan-to-value easing, and fee cuts for certain homes will limit the downturn.
Foreign condominium demand weakened sharply in January-March, with transfers down about 17% year-on-year. Chinese buying declined by 43% in value, while Russian demand grew.
The bank expects a mild contraction in 2026, with transfers seen down 1.1% in volume and 2.3% in value. New mortgage lending is projected to fall 1.6%.
Residential unit transfers rose 11.2% year-on-year in the first quarter, while value increased by a modest 3.1%, indicating a shift towards lower-priced homes.
Higher energy and construction costs, driven by geopolitical tensions, are weighing on household purchasing power.
Thailand's household debt stood at 16.44 trillion baht ($504.45 billion) at the end of last year, or 86.7% of GDP, one of Asia's highest levels.
Housing loans are starting to recover after a prolonged downturn, with new mortgage lending rising 11.1% year-on-year to about 122 billion baht in the first quarter.
