The housing market is entering a new phase where affordability rather than supply is the biggest obstacle to homeownership, nudging more buyers to second-hand homes and the rental market.
Kanit Umsakul, senior analyst at Krungthai Compass, the industrial and economic research arm of Krungthai Bank, said housing affordability has become the defining issue for the residential sector as home prices continue to outpace income growth.
"Housing demand will increasingly shift towards second-hand homes and rental accommodation because they match consumer purchasing power," he said.
According to Krungthai Compass's research report, newly launched home prices in Bangkok recorded a compound annual growth rate of 4.3% during 2012-25, outpacing labour wage growth of 2.8% and widening the affordability gap for first-time buyers.
Although wage growth has continued, it has failed to keep pace with residential prices for more than a decade, making homeownership increasingly difficult for middle-income households.
"The affordability gap is changing buyer behaviour as consumers become more price-conscious and increasingly seek lower-cost alternatives rather than newly launched projects," said Mr Kanit.
Krungthai Compass expects second-hand homes to capture a larger share of residential demand because resale properties typically offer lower prices, while remaining in established locations.
The report estimates the value of second-hand home transfers in Bangkok will reach 195 billion baht this year, accounting for about 40% of total residential transfer value, up from 30% in 2019 and 34% in 2022-23.
Average resale home prices have eased from a peak of 2.4 million baht per unit in 2022-23 to around 2.2 million baht this year, after rising from 2.17 million baht in 2019, making second-hand homes increasingly attractive to budget-conscious buyers.
The affordability challenge is also supporting continued expansion of Thailand's rental market, with online search activity for rental housing steadily increasing in recent years.
Krungthai Compass projects rental housing supply in Bangkok will increase to around 50,000 units this year, compared with 48,000 units last year and 33,000 units during 2022-23.
The strongest rental demand remains concentrated in properties charging between 10,001 and 30,000 baht per month, representing 44% of the total rental market.
Higher-priced rentals above 50,000 baht account for 27% of supply, followed by units priced at 30,001–50,000 baht with a 20% share, while those below 10,000 baht comprise only 9%, indicating that rental supply is concentrated in the mid- to upper-market segments.
"Beyond affordability, the housing market continues to face structural challenges, including elevated household debt, slowing foreign tourism recovery and declining birth rates, all of which are weighing on long-term housing demand," said Mr Kanit.
He warned that geopolitical uncertainty has become a persistent external risk, creating additional pressure on consumer confidence and delaying home purchase decisions.
"Despite these headwinds, opportunities remain for developers that offer a clear value proposition rather than competing solely on new supply," said Mr Kanit.
The market is increasingly becoming K-shaped, with stronger performance expected in luxury projects, high-value developments, second-hand homes, rentals and demand from foreign buyers outside China, while mass-market and undifferentiated projects face greater pressure.
"Instead of relying on broad market recovery, developers are likely to compete through affordability, product differentiation and projects that better match changing consumer priorities as purchasing power remains under pressure," he said.
