Residential real estate in Bangkok: sentiment index at historic low!

Residential real estate in Bangkok: sentiment index at historic low!

The sentiment index for residential property developers in Greater Bangkok recorded a dramatic decline in the first quarter of 2025, falling to 42.0 points. This is the fourth lowest level since the survey began and shows a decline of 8.4 points compared to the previous quarter. Values ​​below 50 indicate a negative assessment of the business climate, highlighting developers' concerns. Loud der-farang.com Similar lows have been recorded in the past during the floods in the fourth quarter of 2011, the global financial crisis in late 2008 and at the start of the coronavirus pandemic in the first quarter of 2020.

The reasons for the decline in the index are varied. The Research and Economic Intelligence Center (REIC) cites high household debt, stricter lending rules, economic policy uncertainties and geopolitical tensions. Added to this are the effects of the reciprocal US customs measures, which are putting additional pressure on the business climate.

Changing conditions and perspectives

Although the sentiment index has fallen to historic lows, the expectations index for the next six months shows slight confidence at 52.3 points. Although this index fell compared to the previous quarter (64.3 points), it remains above the critical threshold of 50. This confidence could be due to government support measures, relaxed loan-to-value limits and real estate incentives valid until June 30, 2026.

In parallel, the residential market index in Thailand fell to its lowest level in 12 quarters in the third quarter of 2024, reaching 76.8 points. This represents a decrease from 84.8 in the second quarter of 2024 and 79.3 in the third quarter of 2023, as bangkokpost.com reported. A key driver of this decline is declining housing transfers and a slowdown in supply, which resulted in a 3% year-on-year decline.

To reflect current market conditions, developers have begun delaying the launch of new projects, particularly in areas with weak demand, and are increasing their focus on residential properties priced below 7 million baht. Forecasts suggest the index could be at 82.1 in the fourth quarter of 2024, down 6.3% compared to the fourth quarter of 2023.

Additionally, the latest figures show that confidence in Greater Bangkok's housing market rose to 40.5 points in the third quarter of 2024, an improvement from 39.6 in the previous quarter. Despite the increase, the index remains below the neutral level of 50, but this reflects growing consumer optimism. What is particularly notable is that women have more confidence in buying property than men at 54.3%, and the 25 to 34 age group accounts for 46.9% of those interested in buying property.

Interest in new and used properties has increased. 56.3% of potential buyers show interest in both categories, while the proportion of buyers only looking for new properties fell from 37.2% to 33.7%. Single-family homes are particularly sought after (40.4%), while condominiums and townhouses account for 34% and 20.6%, respectively. Despite the challenges facing the market, the search for suitable residential properties remains dynamic.