Thailand’s real estate sector is facing renewed pressure after the Bank of Thailand slashed interest rates for the fourth time in a year, while foreign tourist arrivals continue to decline.
According to Reuters, the central bank reduced its key policy rate in mid-September to loosen financial conditions amid slowing economic growth. Governor Sethaput Suthiwartnarueput, whose term ends September 30, warned that rising private debt and deteriorating public finances remain serious risks for the economy.
The cuts come as the country’s tourism industry struggles. From January to mid-September 2025, Thailand recorded around 23 million foreign visitors, a drop of 7.1% year-on-year compared with nearly 25 million during the same period in 2024. China and Malaysia remain the largest source markets, but Chinese arrivals have fallen sharply.
Thailand’s real estate sector is facing renewed pressure after the Bank of Thailand slashed interest rates Photo Courtesy ZOSMA File Photo
Tourism has long been a key driver of Thailand’s property market, particularly in hotspots such as Bangkok, Phuket, and Pattaya, where vacation homes, condominiums, and short-term rentals depend heavily on foreign demand. Analysts warn that the slowdown in arrivals could weaken sales in these areas, even as borrowing costs decline.
The interest rate cuts may provide temporary relief to developers and buyers through cheaper loans. However, structural risks remain: household debt is already among the highest in Asia, and oversupply in the condominium sector continues to weigh on prices.
With the central bank signaling caution and the tourism sector underperforming, Thailand’s real estate market is caught between cheaper financing and weakening demand, leaving its short-term outlook uncertain.
