"Growing 'Unbuyable Middle Class': Social Media Laments Bangkok's Housing Bubble - Why is the Real Estate Market Booming Despite Economic Slowdown?"

1. The Paradoxical City: Cooling Economy and Surging Housing Prices

In recent years, Thailand's economy has languished with a growth rate in the 2% range, burdened by household debt exceeding 90% of GDP. Despite this, housing estate prices, particularly in the Bangkok metropolitan area, continue to rise, widening the gap between public perception and statistical reality.asiarealestatesummit.comnationthailand.com

2. The Reality of "Gradual Increase" as Shown by Official Data

According to the latest report from the Government Housing Bank (GHB) and the Real Estate Information Center (REIC), the housing estate price index in Bangkok recorded a year-on-year increase of +2.7% and a quarter-on-quarter increase of +0.9% in the first quarter of 2025. Meanwhile, the adjacent three provinces (Nonthaburi, Pathum Thani, and Samut Prakan) saw a decline of ▲2.6%, but a slight quarter-on-quarter increase of +0.2%.pattayamail.com

3. "Cost Inflation" Driving Prices Up

The primary factor driving the increase is construction costs. Key materials such as steel and cement remain high due to global supply chain constraints, and the minimum wage was raised again in January 2025. Additionally, land prices in central areas have reportedly reached 4 million baht per 4 square meters.pattayamail.comthaiexaminer.com

4. Winners and Losers by Area

・Eastern Bangkok (Phra Khanong, Bang Na, etc.): Prices in the 7.5 to 10 million baht range are rising, buoyed by the airport rail link and EEC investments.
・Suburban Three Provinces: Properties near stations in Muang Thong Thani and Pak Kret have surged, while areas like Bang Yai and Bang Bua Thong have seen discounts of up to 10% to clear inventory.
pattayamail.com

5. Developers' "Desperate Measures": The Story Behind Clearance Sales

The overall market sales pace is slowing, prompting major listed companies to aggressively offer discounts, furniture, and cashbacks, compressing profit margins with "loss-leading" promotions. A senior executive lamented, "Land prices have soared since acquisition, making new land purchases impossible. We're prioritizing recovery, with profit margins falling below 5%."pattayamail.comnationthailand.com

6. The Mortgage Barrier: Stricter Screening Leading to More "Unable to Buy" Cases

In response to ballooning household debt and increasing delinquencies, financial institutions nominally allow a 100% loan-to-value (LTV) ratio but increasingly require down payments of over 20%. The middle class and below often fail loan screenings, leading to a "polarization" where cash-rich individuals dominate showrooms.bangkokpost.com

7. Government Intervention: Fee Reductions and Tax Deductions

The government has significantly reduced transfer registration and mortgage fees to 0.01% for homes under 7 million baht. Additionally, it is considering removing the cap on mortgage interest deductions, though this has sparked criticism on social media as "favoring the wealthy."pattayamail.com

8. Anger and Sighs Overflowing on Social Media

On Pantip, one of the largest online forums in the country, posts such as,

"In 2015, it was 8,000B per square meter, now it's double. Salaries remain stagnant."
"Construction costs of 16,000B per square meter are insane."
are common. Among younger users, the sentiment of "investing in rentals instead of buying a house" is growing.pantip.compantip.com

9. "Too Expensive to Dream"—Real Voices

An IT technician earning 50,000 baht a month laments:

"Even a townhouse costing 5-6 million requires a repayment ratio of 60%. Marriage and children are out of the question."
Meanwhile, a couple who purchased in the same price range gave positive reviews, citing "good manners and quietness" in the neighborhood, showing a divide in evaluations based on attributes.pantip.compantip.com

10. The Cost Debate: "Developer's Profiteering" or "Inevitable Reality"?

On Pantip, discussions are heated with over 300 comments, with some accusing developers of "profiteering through land flipping," while construction professionals counter that "gross margins are only 10-20% due to material and labor costs."pantip.com

11. Developers' New Strategy: The Rise of "Hybrid Housing"

Low-rise condos combining condominiums and townhomes, known as "towndominiums," are gaining attention. By keeping land costs down while enhancing shared facilities, they achieve a price point in the 5 million baht range. However, properties within walking distance of stations sell out instantly, with lottery odds exceeding 10 times not uncommon.thaiexaminer.compattayamail.com

12. "Rebound Demand" in Provincial Cities

In areas like Phang Nga and Hua Hin, a 3-7% annual increase is reported due to increased purchases by foreign retirees, prompting local residents to express concerns about being priced out.bambooroutes.com

13. Buying a Home as a "Race Against Time"

The expectation that the pace of price increases would be less than the pace of savings should make purchasing possible. However, in reality, stagnant wages and loan restrictions exacerbate the situation, leading to the phenomenon dubbed "บ้านลอยฟ้า (flying house)" on social media, where the longer you wait, the further it gets.pantip.com

14. Monetary Policy and Interest Rate Outlook

With inflation slowing, the Bank of Thailand has shifted to rate cuts since 2022, but the impact on market interest rates has been limited. Bloomberg reports "negative inflation leaves room for further cuts," but banks remain cautious about credit risks.bloomberg.com

15. Comparative Perspective: Differences from the 1997 Bubble

Back then, dollar-denominated borrowing and a currency crash were triggers, but now it'sa cost-push model driven by domestic demand. Economists analyze it as closer to "sticky inflation" than "overheating."

16. "Land Price Doping" from EEC and Massive Infrastructure

The Eastern Economic Corridor (EEC) with its high-speed rail and port plans raises land price expectations but also carries completion delay risks. A landowner in Phra Khanong laughs, "Just seeing the tracks raises the price per square meter by 10%," but for buyers, it's a gamble.pantip.comasiarealestatesummit.com

17. Scenarios Looking Toward 2030

1. Soft Landing: GDP recovery & interest rate decline lead to a gentle increase of around +3% annually

2. Crash: External demand deterioration + household debt chain reaction lead to a sharp decline of ▲15%

3. Parallel: Polarization between areas near stations and suburbs—center +5%, suburbs ▲5%

18. Expert Recommendations

• Strengthening "vacant land tax" to curb idle land for tax savings

• Expanding cooperative schemes for low-income groups by the Government Housing Bank (GH Bank)

• VAT reduction for carbon-neutral building materials

19. Self-Defense Measures for Citizens

• Participating in co-buying or crowdfunding housing

• Refinancing to fixed-rate loans

• Hedging against rent increase risks with long-term lease contracts

20. Conclusion: The Divide Between "Those Who Can Buy" and "Those Who Cannot"

Behind the soaring prices, housing has fully shifted from being merely a "commodity" to an "investment asset." Without addressing income and wealth disparities, housing estates will remain "