As of October 30, 2024, the Thai economy is undergoing a K-shaped recovery, where tourism is rebounding while the property sector continues to face significant challenges. The latest report indicates that in the first half of 2024, the total sales of new and resale residences amounted to 159,952 units, valued at 452.1 billion baht, reflecting a 9% decrease year-on-year. This downturn is attributed to subdued demand, an oversupply of properties, and high mortgage rejection rates. [bc1908ff]
Currently, there are 313,789 unsold residential units in Thailand, which are valued at approximately 1.7 trillion baht. This oversupply is a critical factor contributing to the struggles within the property market. The Bank of Thailand has responded to the economic situation by cutting the policy interest rate by 25 basis points to 2.25% on October 16, 2024, in an effort to stimulate economic activity. [bc1908ff]
Potential changes to loan-to-value ratios are being discussed as a means to further encourage lending and boost the property market. However, there are growing concerns about a possible liquidity crunch in 2025, which could exacerbate the challenges facing the sector. Additionally, the aging population in Thailand may also impact future housing demand, complicating the recovery process for the property market. [bc1908ff]
While the tourism sector shows signs of recovery, the property market's struggles highlight the uneven nature of Thailand's economic rebound. Stakeholders are closely monitoring these developments as they navigate the complexities of the current economic landscape. [bc1908ff]