The Thai housing market is facing significant hurdles as economic uncertainties, largely stemming from the recent imposition of US tariffs, lead consumers to curtail their spending. Despite local efforts to stimulate the market, experts predict that a slowdown will persist in the housing sector.

Surachet Kongcheep, the head of research and consultancy at Cushman & Wakefield Thailand, expressed concerns regarding the efficacy of government measures aimed at reviving housing demand. He noted that even with the reduction in transfer and mortgage fees, as well as the easing of loan-to-value (LTV) limits, these factors are unlikely to sway consumer behavior significantly. Kongcheep pointed out, Reducing spending is necessary, especially as soaring gold prices signal major economic trouble. As a result, people are spending less, and the housing market will likely continue slowing this year.

Thailand's economic landscape is currently characterized by sluggish growth. This stagnation is driven by a mix of local economic constraints and a broader global economic malaise, both of which are expected to impact the country for at least one to two more years.

Critically, the government has yet to introduce substantial new strategies to counteract the adverse effects of the US tariff hikes. The only measures so far have involved negotiations and concessions, which, according to Kongcheep, leave consumers with lingering uncertainties. The uncertainty over tariffs is further worrying Thai consumers, he concluded.

In the short term, the residential market has experienced a mix of influences. On the positive side, the Bank of Thailand (BoT) has decided to ease LTV limits, a change that will take effect from May 1, 2025, until June 30, 2026. This policy aims to make housing more accessible. Furthermore, the government announced a reduction in transfer and mortgage fees for homes valued at 7 million baht or lower, effective from April 22 this year, lasting until June 30, 2026.

However, the housing market was jolted by two significant events: a 7.7-magnitude earthquake that occurred on March 28 and a tariff hike announced by then-President Donald Trump on April 2. Both events are anticipated to have considerable ramifications for the global economy, thereby affecting Thailand as well.

The US's reciprocal tariff policy, which now affects imports from approximately 90 countries, has placed additional strain on Thailand's economy. Consequently, analysts at Kasikorn Securities have revised their forecasts for the country's GDP growth, projecting a further decline in economic performance.

The firm has also adopted a more cautious stance regarding the residential market, highlighting ongoing challenges posed by intense competition and a persistent mismatch between housing supply and demand. As demand weakens this year, Kasikorn Securities has reevaluated the full-year performance outlook for several SET-listed developers, including Land & Houses and Sansiri. The firm anticipates a 14% year-on-year decrease in profits for Land & Houses in 2025 and a 17% decline for Sansiri, marking an overall downturn in expected profits.

Despite these challenges, Kasikorn Securities remains optimistic about the potential impact of newly introduced housing stimulus measures. They believe that the easing of LTV rules and the reductions in transfer and mortgage fees could help spur demand in both the high-end and affordable housing segments as the market moves into the second quarter of 2025.