The Government Housing Bank reported on Wednesday that Thailand’s housing market is exhibiting signs of recovery in the first quarter of 2026, with an increase in transaction volumes attributed to government stimulus. However, the rise in value remains modest, reflecting ongoing challenges related to weak purchasing power. The overall outlook for the housing sector is still precarious, influenced by escalating energy costs tied to the conflict in the Middle East, declining domestic demand, and a downturn in foreign purchases expected to persist throughout the year, according to the state-owned bank.
Despite the anticipated slight decline in the housing market for 2026 due to energy price hikes and inflation, the impact will be mitigated by government measures such as an extension of eased loan-to-value regulations for mortgages for an additional year and reductions in fees for specific transactions.
In the first quarter, the demand for foreign condominiums saw a significant drop, with a 17% year-on-year decline in both transaction volume and value. Even so, foreign buyers still represented a substantial portion of the market. Notably, the value of purchases from Chinese buyers plummeted by 43%, while interest from Russian buyers increased, particularly in higher-end segments concentrated in Bangkok, Chon Buri, and Phuket.
The GHB forecasts a modest contraction for 2026, projecting a 1.1% decrease in transaction volume and a 2.3% drop in value, along with new mortgage lending anticipated to decline by 1.6%. In contrast, residential unit transfers showed an 11.2% year-on-year increase in the first quarter, with a more modest 3.1% rise in value, indicating a trend towards more affordable housing options.
The bank noted that escalating energy and construction expenses, driven by geopolitical issues, are impacting household purchasing power. As of the end of the previous year, Thailand’s household debt reached 16.44 trillion baht, which is equivalent to 86.7% of GDP, ranking among the highest in Asia and affecting consumption and economic growth. New mortgage lending has begun to recover from a prolonged slump, with an 11.1% year-on-year increase to approximately 122 billion baht in the first quarter.
Source: Bangkok Post
