Interest rate cut and incentives boost sales, but demand still hits 15-year low

• In Q4 2024, the Bank of Thailand cut interest rates by 25 bps to 2.25%. Bangkok’s prime condo market showed signs of recovery, with the highest quarterly net absorption of the year. Despite government stimulus and discount campaign, demand hit a 15-year record low.
• The prime apartment market remained stable, with a minor decline in net absorption as rental contracts expired in some apartments. Vacancy rose to 4.7% (+17 bps) but stayed below the historical norm. Expats and shifting local preferences drove market robustness.

Developers maintain caution, avoid flooding market with new units

• A total of 705 prime condominium units from five projects were completed in Q4 2024, driving the total stock to 74,740 units. Following a quarter of no new launches, Via Sukhumvit 61 entered the market, achieving an impressive presale rate.
• No new prime apartment completions were tracked in the quarter. The stock remained limited with around 4,700 units across the market and no promised forthcoming projects in the pipeline.

Both capital values and rents for prime condos rise further

• Top-tier products drove capital values up by 1.3% q-o-q and a significant 11.1% y-o-y. Rising market prices are putting pressure on affordability, particularly among young buyers who are seeking home ownership, as property prices escalate and outpace income growth.
• This shift in rental demand has driven up gross rents by 1.6% q-o-q, while the market yield held steady at 4.9%.

Outlook: Market sentiment continues to be subdued

• About 3,072 prime condominium units from 11 projects are expected by year-end 2025. Prolonged economic downturn has subdued market activity, leading to consolidation, with only a few major developers capitalising on the situation.
• While local demand remains soft, there are opportunities from the increase in foreign buyers. At the same time, economic pressures and rising property prices are straining affordability, further strengthening the rental market.