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Macroeconomic Landscape and Government Policies: Key Drivers of the Real Estate Market in 2025
In 2025, the Thai real estate market will face significant domestic and international macroeconomic factors that will significantly shape the market’s direction. The strong recovery in the tourism sector is a key driver of the overall economy, indirectly impacting the real estate sector, particularly in prime tourist and business districts. However, challenges remain with the policy interest rate, which, despite stabilizing or trending down slightly, remains higher than pre-COVID-19 levels. This directly impacts developers’ financing costs and home loan decisions, particularly for first-time homebuyers or those seeking mid- to low-priced housing. Access to home loans remains a significant constraint.
Furthermore, government policy plays a key role in guiding the market. In 2025, we will see continued housing stimulus measures, such as reductions in transfer and mortgage fees for certain types of property, which will serve as incentives for purchase decisions. However, the government will continue to struggle with balancing economic stimulus with managing high household debt, which may lead to future adjustments to mortgage loan-to-value (LTV) measures. Promoting large-scale infrastructure investment remains key to creating new opportunities for real estate developers. Particularly with the expansion of electric train lines and urban development projects in the outskirts of Bangkok and major cities, transportation network connectivity not only increases land value but also creates new potential locations for residential, commercial, and investment properties.
Consumer Behavior and Demand Direction: Towards Diversity and Sustainability
What will be interesting in 2025 is the significant shift in consumer behavior and demand. Today’s buyers are increasingly sensitive and demanding value, not just price but also quality, functionality, and individual lifestyle needs. Gen Z and Millennials are becoming the primary purchasing power, leading residential projects to adapt to these needs. This includes condominiums that emphasize flexible living spaces and modern design, or townhomes with green spaces and community connections.
Demand for spacious single-detached homes remains strong, particularly in convenient suburban locations, catering to families seeking privacy and security. Meanwhile, the luxury real estate market continues to grow, driven by high-income Thai and foreign buyers seeking unique projects, world-class amenities, and superior service. Sustainable Real Estate is also gaining traction, with consumers increasingly prioritizing environmentally friendly projects, energy efficiency, and the use of technology to reduce environmental impact. Developers who can deliver these values ​​will gain a significant competitive advantage.
Entrepreneur Strategy: Adaptability is the Key to Success in 2025
Amid volatility, leading real estate developers are embracing diverse strategies to cope and achieve growth. Although the total revenue of many listed companies in 2023 will decrease slightly compared to 2022, with 25 out of 41 companies experiencing a decrease in revenue, reflecting a period of severe market challenges, lessons learned from that period have shaped their strategies for 2025 to be more robust and forward-looking.
Diversification and Product Portfolio: Successful companies in 2025 are often not just residential specialists, but also diversified into other investment properties, such as mixed-use projects encompassing residential, office, retail, and hotel properties. This helps generate diversified cash flows and reduces reliance on the residential market alone. Companies like Central Pattana (CPN) have demonstrated the potential to capitalize on the sales of their previously developed properties, recording a 103% growth in sales revenue in 2023. 2025 is expected to see continued growth in residential projects, alongside shopping centers and hotels. Cost and Debt Management: Net profitability remains a key indicator. Land and Houses (LH), which achieved its highest profit in 2023 despite a significant decrease in sales revenue, demonstrated its expertise in asset management and value creation from investments and sales of potential assets. This presents an important lesson for other operators in 2025, which will require them to focus on intelligent portfolio management, not just sales acceleration.
Adoption of Technology and Innovation (PropTech): The use of real estate technology (PropTech) is not just an option, but a necessity. From digital marketing and AI to customer data analysis, to VR/AR for project presentations, smart home construction, and efficient building management, operators who adopt PropTech will be able to reach a wider audience, reduce costs, and create a better buyer experience.
In-depth Look at Key Players: Who Will Be the Leaders in 2025?
Analyzing strategies and adaptability from historical data (2023-2024) to trends in 2025, we can categorize the key players in the Thai real estate market as follows:
Market leaders who remain strong:
Sansiri: With its adaptability and brand building capabilities
