A sign advertises land for sale on Ratchadaphisek Road in Bang Yai district, Nonthaburi. Property developers have slowed launches and many plots are unoccupied.  Chanat Katanyu

Competition for land purchases in Greater Bangkok has slowed as housing inventory rises, sales decline, and developers pivot to clearing unsold stock to generate cash amid the worst market conditions in two decades.

Tritecha Tangmatitham, managing director of SET-listed residential developer Supalai, said it was the first time in his 16 years in the business that there were no competitors bidding for land plots.

"At our most recent land acquisition meeting, there were 30 plots we were interested in," he said. "We asked if any other companies were also looking at those plots, and the answer was zero. None of the 30 plots had any competitors."

The number of environmental impact assessment reports approved each month has dropped significantly, from an average of 15 projects to just two, said Mr Tritecha.

DECLINING NEW LAUNCHES

According to the Real Estate Information Center (REIC), residential developers slowed new supply in Greater Bangkok during the first quarter of 2025, as sales have been declining since last year.

The number of newly launched residential units in Greater Bangkok dropped to 13,867 units worth 84 billion baht, a decrease of 15.6% in units and 30% in value year-on-year.

In terms of unit count, this marked a fifth consecutive quarterly decline.

New sales fell by 29.3% in unit terms and 25.6% in value, totalling 11,314 units worth 68.4 billion baht, according to REIC.

As a result, the number of unsold units rose to 237,571 with a combined value of 1.45 trillion baht, an increase of 11.4% in volume and 18.6% in value, respectively.

REIC projected the time required to sell this inventory would rise to 64 months in the first quarter of 2025, a surge of 60% from 40 months in the corresponding period of 2024.

DEBT FORCES LAND SALES

Pairoj Wattanavarodom, managing director of SET-listed developer Eastern Star Real Estate, said more reasonably priced land is expected to reach the market next year as some developers either pause or scale back their projects.

"Some developers are putting land up for sale because they can no longer issue debentures. Their growth has been debt-driven, which is unsustainable," he said.

"Developers need to grow through operations and focus on speed in order to generate cash during this crisis, especially if they don't have recurring income to support them."

The slowdown in investment and new project launches by residential developers also affected the construction materials sector.

Inno Precast, a manufacturer and distributor of precast concrete, reported many residential developers requested delivery delays as they navigate weak market conditions.

WORST PERIOD IN 20 YEARS

"This is undoubtedly the worst residential market in 20 years," said Mr Tritecha.

"The market's peak was in 2017, with 120,000 units sold annually in Greater Bangkok. Today, that number has dropped to 60,000 units per year. It might recover to 80,000 or 100,000, but not 120,000."

He said the 1997 Asian financial crisis was the most severe period for Supalai. While the current situation is not as bad, Mr Tritecha said it's not far off.

"The picture today is extremely tough," he said.

"This year combined with 2024 is a very difficult period for the property sector."

The residential market is driven by GDP growth, which has been weak. Back in 1997, the economy contracted severely for several years before bouncing back strongly.

The current recovery has been tepid, with no clear sign of sustained improvement.

"Interest rates aren't especially high, but purchasing power is weak due to excessive household debt," said Mr Tritecha.

"During the pandemic, that was understandable. But now debt levels remain extremely high near 90%, severely limiting buyers' ability to enter the market."

STRONG DEVELOPERS GAIN

He said the global economic order is shifting and Thailand has lost much of its competitiveness. Combined with domestic economic issues, this has created a fragile environment.

"Financial discipline is crucial during this time. We must stay patient and wait it out," said Mr Tritecha.

He said there is limited new supply in the market, and although sales are not strong, they are not disappearing.

"Demand is still there, but supply is low. With declining competition for land purchases, it's clear future supply will remain very limited," said Mr Tritecha.

"If our company can survive and continue to operate in this market, the opportunity will be ours when the recovery comes."

He said this environment presents a strategic advantage for financially strong developers, as those with healthy financial positions can launch new projects and gain market share.

Others may see an opportunity, but without financial strength they will be unable to seize it in the same way, said Mr Tritecha.