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The Thai Real Estate Market Situation in 2025: Decoding Opportunities and Challenges in a Changing Era
As a veteran in the real estate industry for over a decade, I have witnessed countless market cycles, but never before has it been as complex and fraught with crucial factors to watch. After years of turbulent times, from the pandemic to domestic and international economic volatility, 2025 presents a demanding year for developers and investors to adapt, build resilience, and seek new opportunities to overcome challenges and achieve sustainable growth. I will take you on a deep dive into the overall picture, situation, and key trends in the Thai real estate market this year, while also decoding the strategies of the true winners.
Lessons from 2023 – A Turning Point Reflecting Market Fragility
Looking back at the performance of 41 leading real estate developers listed on the Stock Exchange of Thailand in 2023, it’s clear that the overall market did not meet initial expectations. The lack of sustained momentum from 2022 led to a continuous slowdown in the Thai real estate sector, starting before the general election, continuing through the end of the year, and continuing into 2024. According to data compiled by Property Mentor, the 41 real estate companies in Thailand had combined revenues of over 371,560 million baht, a slight decrease of approximately -1.2% from 2022. However, a closer look at individual companies reveals that 25 of them experienced significant revenue declines. For example, LPN Development, Eastern Star Real Estate, and Country Group Development saw decreases of around -28%, while Raimon Land, Lalin Property, Major Development, and Siamese Asset all saw declines of over -20%. Even giants like Land & Houses saw an 18% decrease in total revenue. Notably, among the top 10 companies with the highest total revenue that year, five experienced a decline, including AP (Thailand), Supalai, Pruksa Holdings, and Origin Property.
A deeper dive into revenue from sales, the core of real estate development business operations, reveals further details. The picture is becoming clearer: the market is facing real challenges. Total sales revenue for all 41 companies amounted to 268,460 million baht, a decrease of -11% from 2022. Thirty companies experienced a decline in sales; Raimon Land saw a sharp drop of -78%, while LPN Development’s sales decreased by almost -40%, and Land & Houses’ sales fell by as much as -38%. Even AP (Thailand), the company with the highest sales, experienced a slight decline of -2%. Alarmingly, among the top 10 companies with the highest sales, eight faced a decline. This signals a slowdown in purchasing power and intense competition.
Net profit, a true indicator of revenue-generating capacity, was also not bright. The combined net profit of all 41 companies was 44,165 million baht, a decrease of -11% from 2022. Twelve companies reported losses, and more than 20 companies experienced a decrease in profit. Land & Houses continues to lead in profits with a total of 7,495 million baht, partly due to extraordinary gains from the sale of a hotel. However, Supalai and AP (Thailand) remain strong players in terms of profitability, demonstrating effective cost management and sales strategies.
Lessons from 2023-2024 clearly indicate that the Thai real estate market is entering an era where “the fast fish eats the slow fish,” and “large fish that cannot adapt may struggle.” Success is not solely dependent on organizational size, but also on the ability to adapt, manage risks, and see opportunities in crises.
Macroeconomic Drivers and the Thai Real Estate Landscape in 2025
Accurately forecasting real estate trends in 2025 requires consideration of key drivers at both the macroeconomic and microeconomic levels:
The Thai Economy and Recovery: The government continues to implement economic stimulus policies, particularly promoting foreign investment and upgrading infrastructure. The recovery of the tourism sector is another important factor that will drive the overall economy and the service-based real estate sector. However, the slow pace of GDP growth may remain a challenge.
Interest Rates and Household Debt: Trends in policy interest rates of central banks worldwide, including the Bank of Thailand, will determine the direction of financing costs. For both developers and homebuyers, a reduction in interest rates could stimulate purchasing power, but it’s important to remember that high levels of household debt continue to pressure consumers’ ability to borrow and their decision to purchase real estate.
Purchasing Power and Income: Employment and minimum wage increases will be key variables affecting consumer purchasing power, especially in the mid-to-lower income segments. A comprehensive economic recovery would boost income and unlock pent-up demand for housing.
Government Policies and Stimulus Measures: Government measures such as reduced transfer and mortgage fees, relaxed lending criteria, or special interest rate loan programs for targeted groups will be crucial in stimulating the real estate sector. However, the effectiveness of these measures will depend on their timing and suitability to market conditions.
Infrastructure Investment: Mega transportation projects, particularly extended electric train lines in Bangkok and its surrounding areas, as well as the Eastern Economic Corridor (EEC) project, remain key drivers in adding value to land and stimulating real estate development in nearby areas.
Foreign Investment Flows: The return of foreign investment…
