Prospective homebuyers evaluate a promotional campaign at a recent edition of Housing Expo. The Residential Market Index fell to its lowest level since its introduction in 2021 in the first quarter of 2025. Somchai Poomlard

The Thailand Overall Residential Market Index (TORMI) fell to its lowest level since the index was introduced in 2021 in the first quarter of 2025, even dropping below the levels recorded during the Covid-19 pandemic, according to the Real Estate Information Center (REIC).

The TORMI stood at 71.1 points in the first quarter of 2025, a 10.7% decrease year-on-year.

The previous record low was in the third quarter of 2021 at 71.3 points, followed by 72.2 points in the fourth quarter of 2020.

According to REIC, the drop stemmed from a slowdown in both housing demand and supply.

On the demand side, the number of housing ownership transfers in Greater Bangkok fell by 13.6% year-on-year in the first quarter of 2025.

The decline in buyer activity was partly due to some prospective buyers postponing their decisions in anticipation of an extension to the reduced transfer and mortgage fees for 2025.

On the supply side, the number of newly completed and registered condo units in Greater Bangkok dropped by 33.9% year-on-year. Additionally, the developer confidence index fell by 6.3 points from the corresponding period last year.

The TORMI in the first quarter of 2025 also marked a sharp decline from the previous quarter, which stood at 85.5 points, up from 76.8 in the third quarter of 2024.

This was largely due to the expiration of transfer and mortgage fee reductions for residential units priced at 7 million baht or less at the end of 2024.

However, REIC expects the housing market to improve in the coming periods, supported by government stimulus measures.

These include the reinstatement of transfer and mortgage fee reductions, which were extended on April 22, 2025, and remain active until June 30, 2026.

In addition, the Bank of Thailand has temporarily eased the loan-to-value (LTV) ratio from May 1, 2025, to June 30, 2026.

These two measures are expected to gradually help revive the real estate sector starting from the second quarter of 2025.

With these positive developments, REIC forecasts that, under its base-case scenario, the TORMI for 2025 will decline by just 1% from the previous year, reaching 80.9 points.

However, in the worst-case scenario, the TORMI could plunge by as much as 10.8% to 72.9 points, as the housing market continues to face multiple risk factors.

These include a persistently high level of household debt, tighter credit approval standards from financial institutions, uncertainty surrounding the US's economic policy and ongoing geopolitical tension, all of which contribute to a slowing economic outlook both domestically and globally.

REIC developed the TORMI as a quarterly index starting from the fourth quarter of 2021, using housing market data from both the demand and supply sides.

The index was constructed based on data from 2009 to 2017, with 2012 set as the base year.

The index is a quantitative measure, incorporating various indicators from Greater Bangkok.

On the demand side, it includes data on housing ownership transfers, absorption rates of single-detached houses and condos.

On the supply side, it draws from completed and registered housing units, construction permits for residential buildings, and the developer confidence index, an indicator that reflects supply and demand conditions.