Public housing may ease Bangkok’s affordability crisis, but could challenge the private sector. Revising loan structures is key to improving the market.
Guide
Can public housing bridge Bangkok’s affordability gap?
Your browser doesn't support speech synthesis.
Listen to article •
Read time: 1 sec
Greater Bangkok’s housing market is at a crossroads, grappling with persistent affordability challenges that are reshaping both public and private sector strategies. This blog examines the current landscape and explores innovative solutions emerging to tackle this pressing issue.
In 2024, Thailand's residential market faced a significant hurdle. Over 70% of loan applications for homes under 3 million THB were rejected, leaving more than 42,500 condominium units in this price range unsold. This affordability gap has prompted developers to pivot towards upscale and luxury segments, with a future pipeline of high-end product totalling approximately 8,421 units through 2029. On the other end of the spectrum, the Thai government is pushing forward with new launches of “affordable housing” to cater to the lingering demand from middle and lower-income homebuyers.
Historically, the Thai government implemented nationwide public housing policies, to offer units at below market prices. However, many projects were abandoned or remain unsold due to two key issues: cost-cutting measures leading to substandard housing and poor locations with low population density and demand. In 2025, the government introduced a revamped approach, shifting towards a Public-Private Partnership (PPP) model and developing underutilised land of the State Railway of Thailand (SRT). These units will be sold under a leasehold structure, enhancing affordability while transforming SRT’s properties into revenue-generating opportunities. Most projects are near mass transit and urban communities, contributing to a lower costs while meeting housing demand.
Public housing prices remain close to market rates, but new financial structure offer higher levels of loan access. These include no down payment, low interest rates, and extended 40-year terms, resulting in monthly payments starting at just 4,000 THB – a fraction of typical condominium mortgage payment. The market anticipates strong absorption from the low-income groups for the 5,695 new pilot units offered nation-wide. However, the overall impact on the residential market is likely to be limited due to modest supply and distinct target demographic.
Figure 1: Comparison of public housing initiatives and regular condominium
Source: JLL Thailand Research
Looking ahead, if the government scales out its public housing policies, private developers may struggle to offload unsold inventory due to competition with new government housing supply. To combat these challenges, the government must address the root cause of the crisis, particularly financial accessibility. They could extend public housing loan terms and rates to all affordable housing, aiding first-time buyers and easing market inventories. Additionally, increasing the annual personal income tax deduction limit for home loan interest could help reduce personal expenses. While unsold inventories will take time to absorb, private developers may introduce innovative products to target low-income groups since demand for luxury housing is expected to stall in the long run. They may offer more leasehold residential markets at discounted prices, similar to practices in countries with high land costs, or initiate rental programmes in their condominiums project to cater to those who cannot afford to buy.