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TPSI Signals Thai Property Market Strained by Purchasing Power, Not a Bubble
MacroIndustry
An analytical report from BLS Wealth Insights indicates that the Thai real estate market is facing a condition of Affordability Stress Without an Asset Bubble. The Thailand Property Stress Index, or TPSI, stands at 71.7 points, reflecting high market stress driven by pressure from developer funding, household credit, and affordability. Meanwhile, the Asset Bubble Diagnostic stands at only 29.9 points, indicating that the core problem is difficulty in buying rather than asset prices forming a bubble. A key factor is the gap between housing prices and income. Between 2001 and 2025, Thai household income rose 21.8%, but detached house prices rose 59.7%, townhouse prices rose 80.2%, and condominium prices rose as much as 98.5%. In 2025, the PTIR stood at 8.05 times for the overall market and as high as 11.84 times for new homes. On the purchasing power side, pressure led to a 13.8% decline in the number of residential transfers between 2023 and 2025, a 17.4% decline in transfer value, and a 4.2% decline in the average price per transaction, reflecting a downtrading trend. Meanwhile, in the first quarter of 2026, the number of transfers nationwide rose 11.2% year on year, but transfer value rose only 3.1%, causing the average value per unit to fall 7.3%. At the same time, the loan rejection rate rose from about 40% in the fourth quarter of 2024 to 45% in the first quarter of 2025, and for housing priced between 1 and 3 million baht, the loan rejection rate in the developer survey stood at roughly 65% to 70%, based on a sample of 22 developers covering 272 projects, which is not a figure for the entire banking system. On funding obligations, in 2027 about 134.9 billion baht of real estate sector bonds will mature, or 33.8% of the sector's total outstanding, with roughly 65% concentrated in the first and third quarters. Overall, this does not yet reflect a broad transmission of risk into the financial system, because the banking sector still has high levels of capital funds and liquidity.