Property investment slows in Thailand’s three eastern provinces amid weak demand
A challenging year for housing demand in the three eastern provinces saw developers scale back new investments in 2024 as weak demand coincided with higher mortgage rejection rates among local homebuyers. Despite still-accessible borrowing costs in a general sense, the burden of household debt and tighter credit conditions translated into notably lower absorption, especially for affordable segments. The Real Estate Information Center (REIC) data show a broad slowdown across Chon Buri, Rayong, and Chachoengsao, reflecting a market recalibration after years of rapid activity. Looking ahead, REIC’s forecast points to a modest rebound in 2025, but with a wide forecast range that underscores ongoing uncertainty and the sensitivity of the market to lending conditions and consumer sentiment. These trends are shaping strategies across developers, banks, and buyers as they navigate a market where demand remains cautious and investment appetite is restrained.
Market Landscape in the Three Eastern Provinces
Demand dynamics, affordability, and mortgage rejections
Across Chon Buri, Rayong, and Chachoengsao, demand for new housing cooled in 2024 as buyers faced amplified hurdles, particularly in securing mortgage approvals. Even with interest rates remaining relatively low, households carried elevated debt levels that constrained their capacity to obtain financing and commit to purchases. This dynamic curtailed the overall absorption of newly launched residential units, with buyers often unable to secure the necessary credit to close transactions. In practical terms, the market showed a marked preference for housing options that did not jeopardize the borrower’s financial position through heavy leverage, and affluent buyers who might have more flexibility in funding purchases did not fully compensate for the reduced activity among mid-market and affordable segments. In this environment, developers faced a tighter sales environment, forcing a recalibration of launch calendars and product mix to align with what buyers could realistically finance.
The absorption rates for homes priced at or below 3 million baht were described as “nearly zero,” a stark indicator of the disconnect between existing lending constraints and the affordability spectrum that typically targets first-time buyers or entry-level buyers. High household debt, even in the context of low benchmark rates, dampened purchase intent and extended the selling horizon for many projects. The sentiment among buyers shifted toward caution; prospective buyers appeared to adopt a wait-and-see stance, looking for clearer signals on credit availability, wage growth, and broader macroeconomic stability before committing to large purchase decisions. The effect was a slower velocity of sales across the board, with developers needing to rethink timing, unit mix, and promotional strategies to resonate with buyers who were still navigating credit approval processes.
In parallel, the market environment saw banks tightening mortgage lending, reflecting a broader risk-off stance that prioritized balance-sheet quality and prudent underwriting over aggressive loan approvals. Even as interest rates stayed within historically low ranges, lenders emphasized more stringent criteria for income verification, debt-servicing ratio assessments, and collateral considerations. For homebuyers, this translated into more stringent qualification processes, higher scrutiny over income stability, and closer evaluation of existing debt obligations. The combination of tighter credit access and cautious consumer behavior contributed to reduced demand momentum and slower transaction flows, reinforcing a cautious market trajectory that persisted throughout 2024.
Developer activity and project pipelines
Against this backdrop, residential developers in the three eastern provinces adjusted their project pipelines to align with new demand realities. The market’s reduced absorption prompted developers to recalibrate launch plans, prioritizing smaller-scale projects, more conservative investment commitments, and tighter capital expenditure. The Chon Buri Real Estate Association’s president, who also manages a local development firm, highlighted a striking shift: his company launched only a single project in 2024, comprising fewer than 100 units, a stark contrast to roughly 5–6 projects with thousands of units each just three years prior. This shift signals a broader trend of risk aversion within the developer community, as firms prioritized financial resilience and project viability over expansive growth during a period of constrained demand.
The broader effect on the supply side was visible in the data on land allocations and construction approvals, which reflected a deliberate pullback in new-build activity. With the demand environment softened by lending constraints, developers faced longer sell-through times and greater exposure to price sensitivity, necessitating a more measured approach to land procurement and project initiation. The reduction in new launches also had knock-on effects on ancillary sectors, such as construction services, supply chains for building materials, and financial institutions assessing project viability. In this context, developers began favoring projects with clearer financing pathways, stronger pre-sales commitments, and more measurable return profiles, reinforcing a market characterized by discipline over speed.
Transfer trends and value in 2024
The REIC reported that residential transfers across Chon Buri, Rayong, and Chachoengsao declined by 6.7% in 2024, totaling 48,095 units with a combined value of 120 billion baht. This decline, in both volume and value terms, underscored the breadth of the demand shock and the tightening of the housing market’s core financing and purchasing mechanisms. The year’s performance followed a multi-year pattern of weakening demand, suggesting that the market’s earlier resilience was giving way to a more structurally constrained phase where buyers needed stronger incentives, more favorable lending conditions, or both to re-enter the market in larger numbers.
On a quarterly basis, transfers exhibited a sustained downward trajectory, marking six consecutive declines beginning in the third quarter of 2023. The declines in the first three quarters of the downturn stood at 1.4%, 11%, and 16.7%, reflecting a sharp deceleration in activity during the latter half of 2023 and the early part of 2024. The downward momentum persisted through the latter part of 2024, with contractions of 4.1% and 5.8% continuing the trend, and a final noted drop of 0.8% in the fourth quarter of 2024. These quarterly dynamics pointed to a persistent shrinkage in housing transactions, consistent with a market in the throes of shifting demand patterns and a cautious buyer base. In terms of value, transfers began to decline in the fourth quarter of 2023, marking five consecutive quarters of contraction at 9.4%, 14.3%, 10.2%, 6.8%, and 0.5% through the fourth quarter of 2024. The pattern of shrinking value paralleled the volume declines, signaling that price levels and transaction activity were both softening as lenders remained selective and buyers hesitated.
The ongoing decline in housing demand and the accompanying contraction in transfers contributed to a slowdown in new investment momentum. This was reflected not only in sales and financing conditions but also in the broader pipeline of projects in the three eastern provinces. The market’s inertia was further reinforced by the lag effects of policy measures and stimulus programs whose impact was variable and sometimes delayed. The combination of weak demand and cautious lending environment created a challenging climate for developers, who had to balance the need to maintain liquidity, preserve project viability, and sustain employment across related industries.
Mortgage Environment and Absorption
Interest rates, debt, and homebuyer behavior
Even as official interest rates remained relatively low, the real-world impact on buyer behavior was shaped by the surrounding debt landscape. Household debt levels remained elevated, constraining the capacity of many buyers to service new mortgages even when credit was available. This dichotomy—low rates but high debt—helped explain why absorption for lower-priced homes was nearly non-existent. Homebuyers with existing obligations faced tighter budget constraints and risk-averse decision-making, which slowed the pace of new purchases and postponed planned transactions.
The mortgage market’s tighter lending standards reinforced this effect. Lenders applied more conservative underwriting criteria, emphasizing sustainable income streams, sound debt-to-income ratios, and collateral adequacy. The net result was a tightening of credit channels for a broad segment of buyers, not limited to the lower end of the price spectrum but extending into more mid-range offerings where buyers previously relied on more flexible financing solutions. Consumers who could qualify often faced longer processing times or higher down-payment requirements, while those who could not qualify faced outright price reluctance or reconsideration of purchase timelines.
Absorption for sub-3 million baht housing
Absorption for homes priced at 3 million baht or less was characterized as nearly zero, highlighting a pronounced misalignment between demand expectations and financing feasibility for entry-level buyers. This phenomenon implies that even as builders attempted to preserve affordability in form, the affordability message did not translate into actual purchasing power due to credit constraints. For the market, this signals a multipronged challenge: developers must consider whether to adjust price bands, reconfigure unit sizes, or pivot to alternative financing arrangements to attract buyers who can secure funding.
This scenario also has implications for lenders and policymakers. Banks may need to balance risk management with the imperative to sustain liquidity in the housing market, perhaps by refining credit products targeted at first-time buyers, offering more flexible repayment options, or collaborating with developers on pre-approved loan programs tied to specific projects. Policymakers, in turn, may weigh the efficacy of stimulus measures and credit incentives to stimulate absorption without compromising financial stability. The ultimate effect on sentiment is a more cautious buyer psyche, tempered by the perception of ongoing financing hurdles rather than immediate relief from interest-rate adjustments.
Implications for buyers and lenders
For buyers, the central takeaway is that access to affordable financing remains a critical determinant of purchasing decisions. Even when rates are historically favorable, the cost and availability of credit can overshadow headline rate levels. Prospective buyers must carefully evaluate the total cost of ownership, including interest payments over the loan term, fees, and the risk of loan rejection or delays in processing. For lenders, the environment underscores the necessity of robust risk assessment, transparent underwriting standards, and the development of targeted mortgage products that address the needs of credit-constrained buyers while maintaining prudent risk controls.
The broader implication for the housing ecosystem is that the market will continue to require a careful alignment of product offerings with the realities of consumer financing capacity. Developers may need to adjust pricing, unit mix, and location strategy to match buyer propensity, while financial institutions may need to tailor their loan products and service models to facilitate smoother approvals and faster closings for qualified borrowers. The dynamic remains delicate, with the potential for gradual stabilization if credit conditions improve and buyer confidence returns, but also the risk of protracted weakness if funding constraints persist.
Developer Responses and Market Activity
Project launches and pipeline changes
The reduction in demand and tightening credit translated into a notably cautious approach from developers in the three eastern provinces. The trend toward smaller, more carefully staged projects stood out as a practical strategy to preserve liquidity and minimize exposure to market volatility. The case of Maneerin Property—Chon Buri-based and led by a prominent local developer executive—illustrates the broader shift: in 2024, the company launched only one project containing fewer than 100 units, a marked departure from the 5–6 large projects that characterized the prior three-year period when thousands of units were common in a single development cycle. This strategic pivot reflects a belief that smaller, modular, or more flexible projects with simpler financing requirements are better suited to a market where buyers face tighter credit and slower decision-making.
Beyond Maneerin Property, other developers have similarly tempered their activity, focusing on risk control, product viability, and capital expenditure discipline. The reduced pipeline also implies a slower cycle of land acquisition, permitting, and construction, as firms carefully evaluate the macroeconomic signals and the likelihood of timely sell-through. Accordingly, developers have become more selective in choosing locations, project scale, and target segments to maximize the probability of successful pre-sales and favorable project economics. This evolution in developer behavior is not merely a response to the immediate demand shock but also a strategic adjustment to maintain long-term viability in a market where the cost of capital and the speed of sales are uncertain.
Investment adjustments and land use
The protective stance adopted by developers extended to land allocation and construction planning. The data indicate a notable contraction in land allocation activity: the number of land allocation projects fell by 32.3%, while the overall units in those projects dropped by 40.2% relative to 2023. This dual decline signals a sharp retrenchment in the supply pipeline for new low-rise housing, as land is a leading indicator of future housing stock. The reduction suggests that developers are delaying or canceling potential projects until there is clearer evidence of demand strength or improved financing conditions. It also implies that the market could experience a tighter supply in the near term, potentially contributing to a lag effect where unsold inventory remains elevated while new stock remains scarce.
Construction area approvals also contracted, decreasing by 15.8% overall. Within this contraction, low-rise housing projects fell by 15.8%, and condo developments by 15.2%. The similar magnitude of declines in both segments points to a broad-based pullback across product types, driven by market uncertainty and the need to preserve capital in a stretched credit environment. The interplay between land acquisition delays and slower construction approvals can create a feedback loop: slower approvals delay starts, which in turn reduces near-term supply, with potential upward pressure on prices if demand stabilizes. However, given the prevailing weak demand, price dynamics may remain tempered unless credit conditions improve or demand fundamentals strengthen.
Confidence and risk management
Market participants’ confidence in the three eastern provinces appears cautious, with both developers and lenders prioritizing risk management over aggressive growth. The tendency toward smaller launches and more selective land purchases reflects a stance that prioritizes liquidity and sustainability. For buyers, this cautious stance translates into a market where there are fewer new products entering the market, potentially limiting choice in the near term but preserving a more stable price trajectory if supply tightens.
In this environment, developers and financing partners are likely to benefit from clearer regulatory guidance, stable macroeconomic indicators, and more predictable policy measures that influence housing finance and consumer demand. The ability to align product offerings with buyer segments that can realistically qualify for financing will be crucial for sustaining activity. While the 2024 performance shows demand weakness, the market remains capable of recovery if financing becomes more accessible, buyer confidence improves, and the pace of new launches resumes at a more measured but steady pace.
Real Estate Information Center Data: Transfers and Trends
2024 annual transfers and value
The Real Estate Information Center’s annual assessment for 2024 shows a contraction in residential transfers across the three eastern provinces, with total transfers amounting to 48,095 units and a combined value of 120 billion baht. This represented a 6.7% year-over-year decrease in volume, and a 7.8% decline in value versus the previous year. The fall in both metrics highlights a synchronized retreat in activity, where fewer units were sold and the monetary value of those sales declined. The data point to a market recalibration after a period of relatively robust performance in prior years, reflecting the compounding effect of mortgage restrictions and the broader sentiment environment on buyer behavior and project execution.
Quarterly trajectory through 2024
The quarterly breakdown reveals a longer-term downturn that began in 2023 and extended through 2024. Six consecutive quarterly declines started in the third quarter of 2023, followed by a series of successive contractions through 2024. In the first three quarters of the downturn, transfers declined by 1.4%, 11%, and 16.7%, respectively, signaling a sharp deteriorating trend as the market absorbed the impact of tightening credit and caution among buyers. The decline persisted into the latter part of 2024, with contractions of 4.1% and 5.8% in successive quarters, culminating in a modest 0.8% drop in the fourth quarter of 2024. This pattern shows that even as external measures or seasonal factors could produce transient improvements, the underlying demand remained weak and buyer activity continued to contract on a quarterly basis.
In terms of value, transfers experienced five consecutive quarters of contraction from late 2023 into 2024, declining by 9.4%, 14.3%, 10.2%, 6.8%, and 0.5% through the fourth quarter of 2024. The alignment of volume and value declines underscores the fact that reduced transaction activity also translated into lower total transaction value, reflecting tighter financing conditions and more selective purchasing decisions by buyers.
Interpretive analysis
Taken together, the 2024 transfer statistics reveal a housing market in the three eastern provinces that faced persistent headwinds from financing constraints, cautious buyer sentiment, and a slower pace of new project approvals and starts. The six-quarter downturn pattern indicates a cyclical contraction that may reflect the lagged effect of policy and lending changes, as well as a structural shift in buyer behavior away from rapid turnover toward diligence and affordability checks. Seasonal factors may moderate quarterly figures at times, but the underlying trend points to a market that could take time to regain momentum without a meaningful shift in financing accessibility and consumer confidence.
Supply and Construction: Permits and Approvals
Land allocation and unit counts
The supply side data show a pronounced contraction in land allocation activity, with land allocation projects dropping by 32.3% and units within those projects decreasing by 40.2% when compared with 2023 figures. This indicates a substantial pullback from developers in the land procurement phase, which is a leading indicator of future housing completions. The decline in land allocation signals tighter capital discipline and slower project pipelines, consistent with the broader market’s cautious stance toward new investment in a period of weak demand and tighter credit. The significance of land acquisition decisions cannot be overstated: the pace at which land is secured and prepared for development sets the baseline for housing supply in the near to medium term, and this data imply a slower replenishment of inventory in the three eastern provinces.
Construction area approvals
Construction area approvals decreased by 15.8%, with low-rise housing projects shrinking by 15.8% and condo developments down by 15.2%. These parallel declines across housing formats emphasize that the contraction was broad-based rather than isolated to a single product segment. The smaller decline in condo approvals compared to low-rise housing might reflect some continued demand in multi-family formats or strategic financing arrangements associated with higher-density projects, but the overarching trend remains a cooling of construction activity. The reduction in approvals further tightens the supply dynamics and raises questions about the near-term availability of new residential inventory for the three-province region.
Implications for the supply pipeline
The combined effect of reduced land allocations and lower construction area approvals points toward a tightened supply pipeline in the near term. With fewer new projects entering development and a slower start to construction, the market could experience a rare period of limited new supply against a backdrop of weak demand, potentially stabilizing prices or creating a supply-demand mismatch if demand recovers more slowly than supply. Stakeholders may need to balance the timing of land banking and project gating to preserve capital while remaining responsive to any signs of demand improvement. The data highlight a market in transition, where supply decisions are increasingly demand-driven, underpinned by cautious investment strategies and a careful assessment of financing conditions.
Outlook for 2025: Projections and Range
REIC projections and ranges
Looking ahead to 2025, REIC estimates that residential transfers in the three eastern provinces will reach 49,259 units, representing a 2.4% increase from 2024. The forecast comes with a wide expected range between 44,333 and 54,185 units, indicating a forecast sensitivity to economic and credit conditions. In terms of value, transfers are projected to total 121 billion baht, up 1.2% from 2024, with a forecast range of 109 to 133 billion baht. This range equates to a potential decline of 8.9% or growth of 11.4% relative to 2024 values.
Interpretation of the forecast
The 2025 outlook signals a cautious expectation of improvement in activity compared with 2024, driven by a modest rebound in demand and potential stabilization of credit conditions. The range underscores significant uncertainty, reflecting the possibility of a softer or stronger-than-expected recovery. The market’s performance in 2025 will likely hinge on several key factors, including the trajectory of mortgage approvals, the overall macroeconomic environment, consumer confidence, and the effectiveness of policy measures aimed at supporting housing finance and affordable homeownership.
Potential risk factors and upside
Prospects for the 2025 recoveries depend heavily on credit market normalization and buyer sentiment. If mortgage access improves and households regain confidence in their ability to qualify for financing, absorption could expand more rapidly, driving higher transaction volumes and values. Conversely, continued tight lending standards or sustained high debt levels could limit the pace of a rebound, even if interest rates remain low or decline further. External factors such as economic growth, employment stability, and consumer financing incentives will also influence the pace and breadth of recovery. The forecast range thus captures the spectrum of potential outcomes, from modest gains to more robust improvement, depending on how the broader financial environment evolves in the near term.
Conclusion
The housing market in the three eastern provinces—Chon Buri, Rayong, and Chachoengsao—entered 2024 with notable headwinds: weakened demand, tighter mortgage credit, and a cautious developer community recalibrating project pipelines and land acquisitions. The data from REIC indicate a broad retreat in transfers, both in volume and value, alongside significant declines in land allocation and construction approvals, painting a picture of a market in transition. The absorption challenges for affordable housing, particularly for units priced at 3 million baht or less, highlight the complexity of balancing affordability with financing viability in a tightened lending landscape. The results were visible in developer behavior, with smaller launches and disciplined investment as a strategic response to uncertain demand and financing conditions.
Looking forward, the REIC forecast for 2025 offers a glimmer of cautious optimism: a potential uptick in transfers and a modest rise in total transaction value, tempered by a wide forecast range that acknowledges ongoing risks. The extent of any recovery will hinge on the evolution of mortgage accessibility, buyer confidence, and macroeconomic stability. Stakeholders across developers, banks, and buyers will need to stay vigilant, adjusting product offerings, financing solutions, and marketing strategies to align with the evolving demand dynamics while maintaining prudent risk management. As the market adjusts, the three eastern provinces could see a gradual stabilization and eventual rebound if conditions on credit and consumer sentiment improve, supported by targeted policy measures and industry collaboration aimed at sustaining affordable housing access and healthy investment activity.