Condo group urges action on 260 billion bond crisis

The economic slowdown, compounded by a recent earthquake and the United States' retaliatory tax policy, presents severe and complex challenges, particularly for Thailand’s export sector, which directly affects GDP. 

As a result, 2025 is expected to be another difficult and challenging year for the real estate market.

Although supportive measures, such as reductions in transfer and mortgage registration fees and relaxed LTV rules, offer some relief, their impact may be limited amid shifting circumstances. 

The Q1 2025 performance appears to be negative, as the earthquake on March 28 affected end-of-quarter transfer figures.

Financial institution reports indicate Q1 transfer values fell 32% short of the target, achieving only 32 billion baht out of a projected 47 billion, resulting in a 15-billion-baht shortfall. This shortfall has direct implications for developer liquidity and bond repayments due daily.

To mitigate the risks, urgent government intervention is needed, such as soft loan programs to ease liquidity, relaxed credit regulations for financial institutions, and support for real estate bonds nearing maturity, which are becoming an increasingly serious ticking time bomb.

Prasert Taedullayasatit, President of the Thai Condominium Association, revealed that the Association met with advisors to the Prime Minister at Ban Phitsanulok on April 10 to discuss both short- and long-term responses to the impacts of the recent earthquake and the US government's tax policy on Thailand's real estate sector.

As an urgent short-term measure, the most critical issue raised was liquidity in the real estate sector. The Association urged government intervention in the corporate bond market, which is currently fragile, particularly in regard to real estate bonds maturing this year. The goal is to prevent defaults, especially among high-yield bonds and companies facing weakened investor confidence, including those with investment-grade ratings.

Data reflects the magnitude of the issue: From April 2025 to December 2026, bonds worth a total of 266.02 billion baht are due. In 2025 alone:

Investment Grade bonds (AA to BBB-) maturing in Q2 amount to 25.83 billion baht, Q3 at 21.54 billion, and Q4 at 30.49 billion, totalling 77.86 billion baht.

High-Yield/Non-Rated bonds (BB+ and below) maturing in Q2 total 14.44 billion baht, Q3 at 12.59 billion, and Q4 at 13.52 billion—totalling 40.55 billion baht.

The combined total for 2025: 118.41 billion baht.

For 2026:

Investment Grade bonds maturing in Q1 total 32.10 billion baht, Q2 at 21.35 billion, Q3 at 32.01 billion, and Q4 at 18.11 billion—totalling 103.57 billion baht.

High-Yield/Non-Rated bonds maturing in Q1 are valued at 16.27 billion baht, Q2 at 8.14 billion, Q3 at 11.77 billion, and Q4 at 7.85 billion—totalling 44.04 billion baht.

The combined total for 2026: 147.61 billion baht.

An analysis of first-quarter performance this year revealed that property transfers in the first two months dropped by 16%, while the value of newly launched condominium projects declined by 45% to 47.49 billion baht compared to Q4 of the previous year—despite these figures not yet reflecting the impact of the earthquake or the US tax measures.

In Q2, which is directly affected by both the natural disaster and the new policies, but also supported by some government measures, new project launches are expected to decline by 6% from Q1 to 44.60 billion baht. However, on a year-over-year basis, this reflects a 75% increase.

In Q3, new project launches are projected to fall by 34% from Q2 and drop 15% compared to the same period last year, to 29.57 billion baht. 

For Q4, launches are forecast to rise 45% from Q3 to 42.95 billion baht, but still represent a 50% decrease year-on-year.

In addition to calling for urgent government support to address the liquidity crunch in the real estate sector and vulnerabilities in the corporate bond market, the industry is also seeking broader credit access. Recommendations include:

Supporting business loans through financial institutions and commercial banks with favourable interest rates.

Expanding retail and housing loan access, including easing the loan-to-value (LTV) rule to allow 100% loans based on the appraised value of new homes, and 100% based on the current appraised value for refinancing older homes.

Providing special liquidity support to consumers with interest rates equal to those of new homes, without requiring additional BIS capital reserves from banks, as is standard for new housing.

Moreover, the sector urges stronger stimulus measures to boost property transfers this year, such as lifting the current 7-million-baht price cap for transfer incentives, offering additional tax deductions for home purchases and mortgage interest, and waiving specific business taxes for property developers.

For long-term structural reforms aimed at using real estate to stimulate the economy, the following proposals were put forward:

Establishing a framework for foreign property holding through leasehold rights of up to 60 years (split into two mortgage agreements of 25–30 years), without allowing land ownership by foreigners. Foreign leaseholders would have clear rights and tax obligations. A dedicated housing fund should also be established to support low- to middle-income Thais and first-time homebuyers under the “Homes for Thais” initiative.

Overhauling residency and ownership regulations for foreigners, ensuring Thai-led management and oversight. This includes amending the outdated Condominium Act (2008), which no longer reflects current real estate market dynamics or the evolving landscape of foreign residency in Thailand.

Promoting large-scale, man-made real estate developments beyond entertainment, such as medical hubs and hospitals, educational technology centres for technicians, and even global attractions like Disney or Universal-style theme parks.

Boosting the private real estate sector and increasing asset value by enhancing connectivity and utility efficiency with completed public infrastructure projects. This includes linking developments to roads like Ratchadaphisek and utilising unused public rights-of-way. The government is also encouraged to implement a Windfall Tax on private entities that benefit from these state investments.

Despite the challenges, Prasert believes that with unified efforts from all sectors, the industry can overcome both the earthquake impact and the so-called “Trump Tariff”—particularly within the condominium market.