Household debt and war fears push buyers to delay purchases as market faces sixth straight year of declines

Many consumers are likely to delay home purchases or shift to renting instead. The war in the Middle East is escalating tensions involving the US, Israel, and Iran, and these geopolitical risks are weighing on consumer sentiment in Thailand. Kasikorn Research Center forecasts 300,000 residential transfers in 2026, down from the previous year. Of that total, 64.6% — around 194,000 units — will be second-hand homes. New residential unit transfers are forecast at 106,000 units in 2026, a 5.8% decline from 2025. In Greater Bangkok, the take-up rate for new residential launches in January 2026 averaged only 15%. Unsold inventory exceeds 600,000 units, including both new and resale properties. Developers face intense competition to clear inventory, leading to price adjustments. The average transfer value is projected to decline by 0.6% year-on-year to 2.72 million baht per unit in 2026. High household debt remains a key constraint, with debt levels at five times the average monthly income of 28,151 baht in early 2025. Elevated living costs and long mortgage tenures are limiting purchasing power. Supporting measures like reduced transfer fees and relaxed loan-to-value limits for homes under 7 million baht expire on June 30, 2026. Prateep Tangmatitham, president of Supalai, has called for the extension of these stimulus measures. Foreign condo demand will reach 15,200 units in 2026, up 1.8% year-on-year but slowing from 2.2% in 2025. Foreign demand accounts for only 5% of total residential transfers nationwide. Investment in new residential projects in 2026 will remain subdued, near 2025 levels. Developers will cautiously time new launches and focus on clearing existing inventory.