With unsold housing worth THB1.6 trillion, property sector faces crisis
Thailand's property sector is facing a severe crisis, with unsold housing stock valued at a staggering THB1.6 trillion, nearly double the THB830 billion a decade ago. The market contraction, debt crisis, and demographic challenges are among the key factors contributing to this crisis.
According to Wichai Wiratkapan, acting director of the Real Estate Information Centre (REIC), the transfer of house ownership priced at no more than THB7.5 million in the first half of 2024 was negative across almost all price ranges. The cumulative number of unsold units has increased from 250,000 units 10 years ago to about 355,000 units in 2024, with a cumulative value of THB1.57 trillion.
Phadet Charoensivakorn, executive vice president of the National Credit Bureau (NCB), highlighted the growing debt crisis, particularly among lower-income groups and younger generations. The debt per household is about THB600,000, with 138% of income spent on debt repayment, including credit cards, home, and car loans.
Industry leaders are adapting their strategies in response to these challenges. Prasert Taedullayasatit, president of the Thai Condominium Association, projected a 15-20% market contraction for the year and called for government intervention. Keerati Satasook, CEO of CP Land, emphasized the need for new approaches, such as exploring growing markets like tourist cities and focusing on attracting customers with real needs. Uten Lohachitpitaks, Group CEO and chairman of the executive committee of Pruksa Real Estate Pcl, sees potential in targeting specific demographics, such as the elderly and those who want to take care of their health.
As Thailand's real estate sector navigates these turbulent waters, industry stakeholders are calling for a combination of government support, strategic adaptation, and a focus on emerging market segments. The next decade will be crucial in determining whether the sector can overcome its current challenges and return to a path of sustainable growth.
