The Thai housing market is facing significant challenges as consumers remain hesitant to spend, largely due to economic uncertainties spurred by recent tariff increases imposed by the United States. Despite the governments efforts to mitigate these effects, including a reduction in transfer and mortgage fees as well as relaxed loan-to-value (LTV) limits, market experts believe these measures will have minimal impact on reviving demand in the short term.

Surachet Kongcheep, the head of research and consultancy at Cushman & Wakefield Thailand, highlighted that even with the potential for an interest rate cut, the overall consumer sentiment remains cautious. Reducing spending is necessary, especially as soaring gold prices signal major economic trouble, he explained. This trepidation among consumers could lead to a continued slowdown in the housing market throughout this year, reflecting broader trends of economic stagnation.

Mr. Surachet pointed out that Thailands economy is currently sluggish, pressured by a combination of local economic factors and persistent global uncertainties that are likely to endure for at least another year or two. The Thai government has yet to devise new strategies to effectively address the implications of the US tariff hikes, relying primarily on negotiations and concessions. This lack of clarity is further exacerbating consumer anxiety regarding their financial decisions.

Between late March and late April, the residential market was subject to a series of contradictory influences. On the positive side, the Bank of Thailand (BoT) announced a relaxation of LTV limits, effective from May 1, 2025, to June 30, 2026, potentially making home loans more accessible. Additionally, in early April, the government revealed a reduction in transfer and mortgage fees for residential properties valued at 7 million baht or less, effective from April 22, 2023, through June 30, 2026.

However, these encouraging measures were overshadowed by two significant events: a powerful 7.7-magnitude earthquake that struck on March 28 and the announcement of US tariff increases by President Trump on April 2. These occurrences have reverberated through the global economy, further unsettling markets worldwide.

The USs reciprocal tariff policy, which affects imports from about 90 countries, has intensified pressures on Thailands economic landscape. As a result, forecasts for the country's GDP growth have been revised downward, with Kasikorn Securities predicting a continued weakening of economic performance.

In their analysis, Kasikorn Securities took a more conservative stance on the residential market, citing that persistent high competition stemming from an ongoing mismatch between housing supply and demand is likely to prolong the current challenges. Given the weak demand projected for the year, the firm adjusted its full-year performance outlook for SET-listed developers, including major players like Land & Houses and Sansiri.

Specifically, Kasikorn Securities has revised its profit forecast for Land & Houses, anticipating a 14% decline year-on-year in 2025, a minor adjustment of 0.3 percentage points. Similarly, Sansiri's profits are expected to drop by 17%, which reflects a more significant revision of 3 percentage points. Nevertheless, there remains cautious optimism as Kasikorn Securities believes that the newly introduced housing stimulus measuressuch as eased LTV rules and the reduction of transfer and mortgage feeswill help stimulate demand across both high-end and affordable housing segments by the second quarter of 2025.