Thai housing demand recovering but outlook clouded by energy shock risks

BANGKOK - Thailand's housing market showed recovery signs in the first quarter of 2026, the state house leader said on Wednesday, with transaction volumes rising on government stimulus even as gains in value lagged, underscoring weak purchasing power.

• The outlook remains fragile, with rising energy costs linked to Middle East war, soft domestic demand and a pullback in foreign buying expected to weigh on the sector through the rest of the year, the Government Housing Bank said in a statement.

• The housing market is expected to decline slightly in 2026 due to energy costs and inflation, though declines will be limited by government stimulus, an extended loan-to-value easing for another year and fee cuts for certain homes, the bank said.

• Foreign condominium demand weakened sharply in January-March, with transfers down about 17% year-on-year in both volume and value, though foreigners still accounted for a significant share of transactions.

• Chinese buying declined steeply, by 43% in value, while Russian demand grew, with foreign activity concentrated in Bangkok, Chonburi and Phuket, particularly in higher-end segments.

• The bank expects a mild contraction in 2026, with transfers seen down 1.1% in volume and 2.3% in value, and new mortgage lending projected to fall 1.6%.

• Residential unit transfers rose 11.2% year-on-year in the first quarter, while value increased a more modest 3.1%, highlighting a shift towards lower-priced homes.

• Higher energy and construction costs, driven by geopolitical tensions, are weighing on household purchasing power, it said.

• Thailand's household debt was 16.44 trillion baht ($504.45 billion) at the end of last year, or 86.7% of GDP, among Asia's highest levels, dragging on consumption and growth.

• Housing loans are starting to recover after a prolonged downturn, with new mortgage lending rising 11.1% year-on-year to about 122 billion baht in the first quarter.

($1 = 32.5900 baht)

(Reporting by Kitiphong Thaichareon, Orathai Sriring and Chayut Setboonsarng; Editing by Martin Petty)

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This story was originally published May 27, 2026 at 1:43 AM.