Sale representatives present their products to members of the public. Due to several unfavourable factors, the sentiment index of Greater Bangkok housing developers dropped to its third-lowest level in the second quarter of 2025. Somchai Poomlard

The sentiment index of Greater Bangkok housing developers dropped to its third-lowest level in the second quarter of 2025, behind the massive floods in 2011 and the global financial crisis in 2008, even sinking below sentiment during the pandemic.

According to the Real Estate Information Center (REIC), the Housing Developer's Sentiment Index tallied 39.3 in the second quarter of 2025, down 2.7 points from the previous quarter.

The survey began in the fourth quarter of 2007.

The lowest level was recorded at 37.1 in the fourth quarter of 2011 during the great floods, while the second-lowest was 37.3 in the fourth quarter of 2008, following the collapse of Lehman Brothers, the fourth-largest US investment bank, which triggered a global financial meltdown.

The previous third-lowest index was 41.2 in the first quarter of 2020, during the onset of the pandemic. Overall, the index has fallen below the 50.0 threshold 28 times since the survey began.

A sentiment index above the median level of 50.0 indicates that developers are confident and hold a positive outlook on the market. Conversely, a reading below 50.0 reflects weakened confidence and a more negative sentiment.

REIC noted that the second-quarter 2025 figure marked the second consecutive quarterly drop, following a reading of 42.0 in the first quarter of 2025 and 50.4 in the fourth quarter of 2024. The index had previously improved from 45.1 in the third quarter of 2024.

Multiple factors contributed to the decline: persistently high household debt, tighter mortgage lending rules, uncertainty surrounding the government's economic policies, escalating geopolitical tensions, and the impact of reciprocal tariffs imposed by the US.

Among key index components, investment sentiment posted the steepest decline, plunging 11.2 points to 37.7 from 48.9.

This was followed by sentiment related to the launch of new projects or phases, which fell 5.3 points to 40.8, from 46.1.

Employment sentiment declined by 2.1 points to 43.1, while sales sentiment dropped 1.5 points to 37.9. Sentiment regarding business performance edged down 0.3 points to 34.5.

In contrast, sentiment towards operational costs, which is inversely interpreted, rose 4.7 points to 42.1 from 37.4, indicating mounting concerns about rising costs.

The expectations index, which reflects sentiment for the next six months, fell to 50.3, down 2.0 points from 52.3 in the first quarter of 2025.

The expectations index, which gauges developer sentiment for the next six months, dropped to 50.3 in the second quarter, down 2.0 points from 52.3 in the first quarter of 2025.

Despite the decline, the index remained above the 50-point threshold, suggesting that developers maintained cautious optimism about an improving property market outlook.

This sentiment was buoyed by several government support measures, including reduced transfer and mortgage fees for homes priced at 7 million baht or less, as well as the easing of loan-to-value limits -- both effective until June 30, 2026.

However, developer confidence for the next six months weakened across nearly all areas when compared quarter-on-quarter.

Sales expectations fell the most, down 4.3 points to 57.3, followed by a 3.4-point drop in expectations for launching new projects or phases, which fell to 50.2.

Investment expectations declined 2.4 points to 51.4, while performance expectations dropped 1.6 points to 54.7. Employment expectations also slipped slightly by 0.3 points to 48.8.

Meanwhile, sentiment towards operational costs were again inversely interpreted, rising 0.2 points to 39.5, further underscoring cost pressures across the sector.