The important question for property buyers is not just whether the market is falling, but why it is falling, and whether the reasons apply equally to every location and buyer type.
According to Kasikorn Research Center, Thailand’s residential market is expected to contract for a fourth consecutive year in 2026, with nationwide transfers projected to fall 5.1% year-on-year to around 300,000 units, the lowest level in years. The forecast reflects fragile buying activity shaped by limited purchasing power, high household debt, and heightened uncertainty driven by tensions in the Middle East.
For Phuket property buyers and investors, the national picture matters, but the local context matters more.
What the figures actually show
The projected 300,000 residential transfers nationwide would mark the fourth consecutive annual decline. Of those transfers, around 194,000 units, or 64.6%, are expected to be second-hand homes. Transfers of new residential units are forecast at 106,000 units, down 5.8% from the previous year.
In plain English, the resale market is absorbing the majority of transactions, while demand for newly launched projects remains weak. In 2025, new home sales in Greater Bangkok tallied only 52,000 units, described as the lowest level in years.
Residential prices are expected to edge down slightly, with the average transfer value projected to decline by 0.6% year-on-year to 2.72 million baht per unit. The price adjustment reflects competition among developers to clear a large inventory exceeding 600,000 units, including both new and resale properties, giving buyers greater bargaining power.
Kasikorn Research Center notes that the market had already been expected to contract before the escalation of tensions in the Middle East. The conflict involving the US, Israel and Iran is now weighing on sentiment, though the decline in 2026 is projected to be less severe than in the previous year.
Why purchasing power remains constrained
Limited purchasing power is identified as a major constraint. Data from the National Statistical Office showed that in the first half of 2025, household debt stood at five times the average monthly income of 28,151 baht. High living costs and elevated household debt continue to limit the pool of domestic buyers.
Given high unit prices, long mortgage tenures and limited liquidity of residential assets, many consumers are likely to delay purchases or shift towards renting instead of ownership, according to the research center.
Even before the recent escalation in the Gulf, demand indicators remained weak. In January 2026, the take-up rate for new residential launches in Greater Bangkok averaged only 15%.
Government support measures and what happens next
Key supporting factors for the residential market in 2026 include reduced transfer and mortgage fees for homes priced below 7 million baht, as well as relaxed loan-to-value limits for first and second homes. These measures are set to expire on June 30, 2026.
Prateep Tangmatitham, president of SET-listed developer Supalai, said the market showed signs of an upswing in the first two months of 2026, but began to stumble in March following the outbreak of war. He expressed hope that the new government will extend the support measures.
Developers have rolled out significant promotions to encourage home purchases amid sluggish demand, providing some support to the market. However, Kasikorn Research Center notes that downside risks continue to outweigh the positives.
Foreign buyer demand continues to grow
Kasikorn Research Center forecasts that foreign condo demand will continue to grow, with transfers expected to reach 15,200 units in 2026, up 1.8% year-on-year. However, this marks a slowdown from 2.2% growth in 2025 and accounts for only 5% of total residential transfers nationwide.
The projection suggests that foreign buyers remain active, though the rate of growth is moderating. The detail worth noting is that foreign demand is resilient even as domestic demand weakens.
What this means for Phuket property
The national housing market and the Phuket property market are not the same market. Phuket serves a different buyer base, with higher foreign participation, stronger tourism-linked demand, and a focus on luxury and lifestyle-driven investment rather than primary residence housing.
The challenges cited in the national report—high household debt among Thai buyers, weak domestic purchasing power, and Bangkok-centric oversupply—do not directly translate to Phuket’s villa and high-end condo market, where foreign buyers, rental investors and lifestyle purchasers dominate.
However, the broader economic context does matter. If government support measures expire without extension, mortgage access may tighten for Thai buyers in all markets. If geopolitical tensions weigh on confidence, foreign buyers may also pause or reconsider timing.
The report’s projection of continued foreign condo demand growth, albeit slower, suggests that international buyers remain engaged. For Phuket property, the question is whether the island’s appeal as a resort destination and rental investment location can continue to attract buyers even as the broader Thai housing market contracts.
Investment in new projects is likely to remain subdued, with developers focusing on clearing existing inventory and timing new launches carefully. For buyers, this may mean more negotiating power, more incentives from developers, and more choice in the resale market.
Frequently Asked Questions
What is driving the decline in Thailand’s housing market?
The decline is driven by limited purchasing power, high household debt, weak domestic demand, and heightened uncertainty from geopolitical tensions. Data shows household debt stood at five times the average monthly income in the first half of 2025.
Does this decline apply equally to Phuket property?
Not directly. The national report focuses on the broader housing market, particularly Bangkok, where domestic buyers and oversupply are key factors. Phuket’s market is more tourism-linked, lifestyle-driven, and reliant on foreign buyers, which creates different demand dynamics.
Are foreign buyers still active in Thailand?
Yes. Kasikorn Research Center forecasts foreign condo demand will reach 15,200 units in 2026, up 1.8% year-on-year. However, growth is slowing compared to 2.2% in 2025, and foreign buyers account for only 5% of total residential transfers nationwide.
What happens if government support measures expire?
Key support measures, including reduced transfer and mortgage fees for homes below 7 million baht and relaxed loan-to-value limits, are set to expire on June 30, 2026. Developers have called for the new government to extend these measures to sustain demand.
Is now a good time to buy property in Thailand?
The report suggests buyers have greater bargaining power due to high inventory and price adjustments. However, whether it is a good time depends on individual circumstances, location, buyer type, and whether government support measures are extended.
Sources
- Bangkok Post — Property — House sales to fall as war hits demand — link
