A model house on display at the 47th Home and Condo Expo held last month at Queen Sirikit National Convention Center. Residential developers in three eastern provinces slowed new investments last year due to weak demand. Somchai Poomlard

Residential developers in three eastern provinces slowed new investments last year in response to weak demand, driven by high mortgage rejection rates among local homebuyers.

Vattanapol Pholchivin, president of the Chon Buri Real Estate Association, said many residential projects in 2024 recorded zero sales, as banks tightened mortgage lending, weakening purchasing power.

"Though interest rates remain low, household debt is still high," he said. "Absorption rates for homes priced 3 million baht or less were nearly zero, as potential buyers failed to secure mortgages."

Mr Vattanapol, who is also managing director of Chon Buri-based developer Maneerin Property, said his company launched only one project with fewer than 100 units in 2024, compared with 5-6 projects featuring thousands of units three years ago.

The Real Estate Information Center (REIC) reported residential transfers in Chon Buri, Rayong, and Chachoengsao dropped by 6.7% in 2024 to 48,095 units, with a total value of 120 billion baht, down 7.8% from 2023.

On a quarterly basis, the number of transferred units saw six consecutive declines starting from the third quarter of 2023, with a decrease of 1.4%, 11% and 16.7% in the first three quarters of the downturn.

The decline continued with contractions of 4.1% and 5.8%, followed by a slight 0.8% drop in the fourth quarter of 2024 -- a period that was expected to see a rebound as it marked the final quarter under the property stimulus measures.

In terms of value, transfers began declining in the fourth quarter of 2023, marking five straight quarters of contraction at 9.4%, 14.3%, 10.2%, 6.8% and 0.5% through the fourth quarter of 2024.

The ongoing decline in housing demand led to a slowdown in new investment, reflected in a drop in land allocation permits for low-rise housing projects and in construction areas approved for both condos and low-rise houses in 2024.

The number of land allocation projects fell by 32.3%, while the number of units dropped by 40.2% compared with 2023.

Construction area approvals also declined by 15.8%, with low-rise housing projects shrinking by 15.8% and condo developments by 15.2%.

Looking ahead, REIC estimated that residential transfers in the three eastern provinces in 2025 will reach 49,259 units, a 2.4% increase, with a forecast range of 44,333 to 54,185 units -- equivalent to a change between a 7.8% drop and a 12.7% rise from 2024.

The total value of transfers is projected at 121 billion baht, up 1.2%, within a forecast range of 109-133 billion baht -- representing a possible decline of 8.9% to growth of 11.4%.