WITH INCOME growth lagging expenses over 56% of Thais now have no plans to buy a home in the next five years while being additionally dissuaded by high housing prices, according to an analysis by SCB EIC’s Economic and Business Research Centre published by PPTVHD36 this evening (June10).
With purchasing power remaining sluggish in the face of high household debts, slowing household income, limitations in accessing and repaying housing loans, and economic uncertainty this analysis highlighted the following issues:
-The housing market is projected to continue contracting in 2026 and recover slowly in the medium term, amidst economic pressures including the slow recovery of the Thai economy, debt burdens, stricter lending standards by financial institutions, and a delay in purchasing or investing in real estate due to economic uncertainty, particularly the conflict in the Middle East, which affects both domestic and foreign purchasing power.
– This aligns with the 2026 housing demand survey by SCB EIC, which shows that 56% of respondents have no plans to purchase a home in the next five years, an increase from 47% in the previous year and the highest level in four years. Reasons for not planning to buy a home, besides already owning a home, include economic factors such as high expenses, debt burden, high housing prices, and concerns about the future economic situation — primarily demand-side factors.
Additionally, some respondents hesitated to apply for housing loans or decided not to apply at all due to perceived risks of rejection, while others assessed their financial readiness and therefore chose not to apply for a loan initially.
– The majority of respondents want the government to prioritise assistance in accessing housing and improving the ability to repay loans. The most urgent problems respondents want addressed are: 1) expenses increasing faster than income, reducing the ability to purchase and repay housing loans; 2) debt burden, impacting access to new housing loans and the ability to repay current loans; and 3) high prices of new housing, making it difficult to purchase.
– Measures or policies to support the real estate sector are also needed. The most requested measures by respondents to alleviate their housing problems include: 1) Low- or ultra-low-interest loans (soft loans), including low-cost housing projects, to help low-income groups severely affected by the economic downturn who still have the ability to repay low-interest loans, to gain greater access to housing; and 2) Measures to assist those experiencing difficulties repaying loans, such as flexible repayment terms for good borrowers, debt restructuring support, or government loan moratoriums.
– Measures to reduce housing costs remain necessary to stimulate purchasing power among those who are not yet financially ready. The majority of this group still want the government to maintain the measure of reducing transfer and mortgage registration fees at 0.01% each, with this expiring at the end of this month.
Even with measures supporting those with the potential to purchase homes, this would not be enough to revive the market. SCB EIC believes that addressing the challenges of home ownership for low-income earners, along with structural economic problems and policies to support the real estate sector in adapting to long-term changes, are crucial with recommendations being as follows:
– In the short term, the focus should be on measures to assist those experiencing difficulties repaying housing loans and those facing challenges accessing housing, such as debt relief, debt restructuring, or loan moratoriums for low-income groups affected by the economic downturn.
While the government has been continuously implementing these measures, they may not yet fully cover middle-income groups who are increasingly impacted by the economic crisis. This includes low-interest loan measures and government-sponsored low-cost housing projects to help low-income groups gain greater access to housing.
Furthermore, consideration should be given to supporting rentals and developing co-living housing units with lower prices and rental rates than typical residences, as an alternative to purchasing a home.
– Maintain measures that reduce housing purchase costs, especially the reduction of transfer and mortgage registration fees to 0.01% each, with this expiring at the end of this month, and consider expanding the ceiling to cover housing priced above 7 million baht, following the extension of the relaxed loan-to-value (LTV) ratio.
This aims to encourage some financially capable individuals to purchase. While the impact of these measures is currently limited, not extending them could cause some ready-to-buy individuals to delay purchases, leading to a more severe contraction in the housing market.
– In the medium to long term, focus should be placed on sustainable structural economic solutions addressing debt and expenses exceeding income, to help systematic recovery of housing market purchasing power.
For example, South Korea addressed this problem by increasing income through gradual increases in the minimum wage directly between 2018 and 2020, enabling low-income workers and young people to access housing. Combined with policies to increase productivity and labour market capabilities, this would further strengthen the income structure.
– Furthermore, policies should be implemented to support the real estate sector in adapting to changes in the economy, society, consumer behaviour, and megatrends. These include policies on housing security for aging societies that consider the accessibility and affordability of housing for seniors, encouraging renovations instead of buying new homes, and promoting the development of intergenerational housing projects or communities where seniors can live independently or with other age groups.
Policies should also address declining population trends by encouraging the conversion of vacant homes/apartments into rentals, similar to the Japanese model. Finally, stricter law enforcement is needed to protect resident welfare, such as cracking down on illegal construction permits or EIA approvals and preventing daily condo rentals.
CAPTIONS:
Top – A condo project. Photo – PPTVHD36
First insert – Buying a house is currently not possible for many Thais. Photo – PPTVHD36
Second insert – Mr. Chetthawat Songprasert, senior analyst, SCB EIC Economic and Business Research Centre. Photo – PPTVHD36
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