The Thai real estate market is going through a cash crisis: loan rejections are skyrocketing, launches are collapsing, and tourism is declining.

Despite stable prices, developers face a financing blockage, while Thailand has only welcomed 25.1 million visitors between January and October 2025 (-7.54%) and households remain heavily indebted.

See: Real estate in Thailand sinks into an unprecedented crisis

Opinion of developer and promoter Kirill Vyalykh: in this analysis, he details why the Thai real estate market is going through a cash crisis despite stable prices.

Original title of the op-ed: « We are building in Thailand — and we see the market on the brink of collapse »

The warning signs in 2025

The developer and real estate promoter Kirill Vyalykh. Photo: Thailand Business News

The tourist flow in 2025 is lower than that of 2024, banks have tightened their subscription conditions for mass market buyers, and new launches in Bangkok have reached their lowest level in several years.

It's not a 'price collapse', but a cash crisis for those who build: pre-sales are not converted into mortgages, project financing is blocked, IRR (internal rate of return) is melting, and phases are being pushed back.

What's happening 'in numbers'?

Tourists on a beach in Koh Samui. Photo: Khaosod

Tourism is at a standstill

From January 1 to October 12, 2025, Thailand welcomed 25.1 million foreign visitors (-7.54% year-on-year) and, in August, the national planner revised its forecasts for 2025 downwards to around 33 million (compared to 39.9 million in 2019).

For income-generating real estate and tourist complexes, this means less traffic and a lower NOI (net operating income) outside of 'flagship' locations.

Money is easier to obtain, but barriers are stricter

On October 8, the Bank of Thailand maintained its key rate at 1.50% (four rate cuts had already taken place during the year), while the regulator temporarily relaxed the loan-to-value ratio to 100% (contracts from May 2025 to June 2026).

This helps, but does not break the trend of rejections in the retail segment.

Fees have been reduced in a targeted manner

Until June 30, 2026, transfer and mortgage registration fees for properties with a maximum value of 7 million bahts are reduced to 0.01%, a measure that mainly concerns Thai citizens.

Households are over-indebted

At the end of the second quarter of 2025, household debt relative to GDP stood at 86.8% (one of the highest in Asia), which explains the strict bank ratings.

Demand and launches: the market is slowing down

Construction site in Bangkok. Photo: Tim Parkingson

Demand has decreased

In the first quarter of 2025, Bangkok condominiums recorded an absorption rate of 18.1%, the lowest in several quarters; at the same time, mortgage loan rejections for housing under 3 million bahts reached 70 to 80%.

The weakness of purchasing power, combined with strict subscription conditions, leads to a reduced number of real transactions.

Launches are at their lowest historical level

In the second quarter of 2025, new apartment launches in Bangkok plummeted 94% year-on-year to 373 units (Colliers estimate, the lowest level in 15-16 years).

Another estimate by Knight Frank reports only two projects / 405 units — methodologies differ, but the trend is the same: property developers are marking time.

Condominium title transfers in the capital region reached 12,183 (a low level for over 6 years).

Costs are not decreasing

The construction materials price index in March 2025 was 112.8 (+0.5% year-on-year): concrete and logistics are 'eroding' margins, while the final product price remains 'rigid' due to weak demand.

Tourist complexes: 'resilience islands'

In Phuket, in the first half of 2025, the average occupancy rate remained around 79.5% (in luxury and high-end, around 84%), while in several other destinations and in Bangkok, RevPAR is under pressure.

This is a significant turning point for product strategy.

Why is this precisely a crisis for property developers, and not just a slowdown?

The Gardens of Eden real estate project in Phuket. Photo: The Nation Thailand

Each project follows a simple cycle:

1) Reservation → 2) Mortgage approval → 3) Contract → 4) Construction loan → 5) Construction on schedule.

If 6 to 7 reservations out of 10 'fall through' due to mortgage refusals, the pre-sale threshold set by the bank is not reached.

The bank suspends loan disbursements and the real estate developer:

either adds discounts and staggered payment plans (the margin decreases);
or builds with its own funds (cash flow becomes negative, interest 'erodes' profits);
or slows down the phase (costs related to land holding, site maintenance, and contractors increase).

This is where the 'developer crisis' comes from: not because everything has collapsed, but because cash flows are interrupted.

What could help the market (and what we are asking regulators/banks)

View of Bangkok.

Predictable rules

If the easing of fees and mortgage rules lasts for a long time and is transparent, developers plan deliveries and banks plan limits.

Intermittent decisions have the opposite effect.

Targeted assistance for households

As long as families are heavily indebted, banks will reduce approvals.

The restructuring of 'small' consumer loans and more flexible payment schedules offered by developers increase the conversion of reservation to mortgage.

Quality of tourism

It's not just the number of tourists that counts, but also the share of long-haul markets, business tourism, medical tourism, and wellness tourism — these are precisely the elements that determine the profitability of tourism assets.

Risks and resilience points

Travelers at Don Mueang Airport. Photo: Varuth Hirunyatheb/Bangkok Post

Additional risks

Suburban projects without practical metro/public transportation.
Prices of entry-level real estate (up to around 3 million baht), where buyers more often fail bank checks.
Second-tier beach resorts where occupancy rates are lower and rental yields don't meet expectations.

More resilient

The center and hubs near BTS/MRT stations — rentals and resales are more dynamic there.
Phuket and some other mature beach resorts where hotel occupancy rates are maintained and investor-buyers are interested in numbers, not promises.

Conclusion

Condominiums rise above Chatuchak Park in Bangkok.

Condominium buildings rise above Chatuchak Park in Bangkok. Photo: Pattarapong Chatpattarasill

The current Thai market is not experiencing a 'price crisis', but a cash flow crisis for developers.

Projects 'collapse' not due to a catastrophic drop in demand, but due to a bottleneck:

Many bookings, few approved mortgages, a sharp shortage of 'real' presales, meaning construction and financing are at a standstill.

What to do?

Recognize weaknesses (mass segment without transit, unattractive beach resorts), design financially solid projects, only market when demand is confirmed, and control costs.

For the state and banks, the task is also clear: maintain predictable support measures and prudently handle household debt to widen the mortgage 'bottleneck'.

If these measures are taken in time, the market will cross the 'narrow bridge' without a sharp price drop and, within 12 to 18 months, we will return to a normal launch pace.

Otherwise, we won't face a resounding crash, but a long, persistent stagnation in which only the most disciplined will survive.

To remember

Loan rejections reach 70-80% for homes under 3 million baht.
Launches in Bangkok plummet 94%, the lowest level in 15 years.
The market is not in a price crisis, but in a cash crisis due to financing blockage.

Thailand: the real estate market is on the brink of collapse