Thai Times

Covering the Thai Renaissance
Monday, Aug 11, 2025

Thai Real Estate Developers Brace for Profit Decline Amid Weak Demand

Competitive Market Forces Developers to Implement Discounts as Profits Slip
The profits of listed housing developers in Thailand are anticipated to fall by more than 10% this year compared to 2023, driven by intense market competition and the implementation of aggressive discount strategies to cope with dwindling demand.

A recent industry analysis indicates significant shifts in the sector as developers adjust to these challenging market conditions.

According to Sumitra Wongpakdee, managing director of Terra Media and Consulting, a property research and consultancy firm, the sluggish market has prompted developers to alter their financial strategies by reducing prices and launching promotional campaigns.

These efforts are aimed at bolstering sales, even at the expense of profit margins, in order to maintain their annual revenue targets.

In the first nine months of 2024, 35 listed housing developers reported a collective net profit of 20.8 billion baht on revenues totaling 223 billion baht.

This is a notable decline from a net profit of 38.5 billion baht and revenues of 331 billion baht for the entirety of 2023.

The net profit margin to revenue ratio diminished to 9.3%, decreasing from 11.6% at the end of 2023 and 13.1% in 2022, according to Terra's data.

Forecasts from Terra estimate that the combined revenues of these developers are projected to fall by 5-8%, landing at approximately 300 billion baht by the end of 2024.

Only a select number of developers are expected to meet their annual targets, with an achievement rate of over 63% in the first three quarters of the year, while others lag, reaching just 36-38% of their annual goals.

Kasikorn Securities, a prominent Thai brokerage, reports that 12 listed developers analyzed under its purview recorded a combined net profit of 7.5 billion baht in the third quarter, down by 8% year-on-year and 2% quarter-on-quarter.

Despite aligning with market and internal expectations, the results were seen as lackluster since quarterly growth was absent, even with substantial condo backlog transfers in the preceding months.

Throughout the first nine months of 2024, the collective net profit for these developers decreased by 20% year-on-year, amounting to 21.3 billion baht, with an anticipated decline of 11% by the end of the year, according to Kasikorn Securities.

The third quarter saw particular challenges as developers with joint ventures experienced a notable increase in transfer value year-on-year and quarter-on-quarter, due largely to the transfer of condo backlogs.

While this contributed to a rise in investment profit, market competition, particularly in low-rise housing, resulted in a reduction of gross profit margins.

Developers reported a year-on-year decrease in gross profit margins by 1.0 percentage point, and a quarter-on-quarter drop of 0.5 percentage points, bringing it to a four-year low of 30.6%.

Kasikorn Securities highlights the importance of strategic cash flow management amid these continuing challenges.

Slowed project development is leading to reduced housing inventory, which aids in managing interest-bearing liabilities and enhancing cash flow.

The brokerage notes that the housing market in the third quarter remained under strain from waning demand, with fierce competition further compressing gross profit margins, underscoring the need for effective cash flow strategies.

Although condominium backlog transfers and a traditional increase in fourth-quarter transfers might boost profits, substantial hurdles remain.

Many developers have downgraded their 2024 project plans, expecting a 16% year-on-year reduction in the value of new project launches, totaling 314 billion baht.

Fourth-quarter profits are predicted to be more robust, aided by substantial transfer volumes, seasonal factors, and condo backlogs, comments Kasikorn Securities.

The expiration of tax incentives for homes priced below 7 million baht is expected to provide a brief spur before year-end.

In the absence of immediate catalysts, a positive shift in macroeconomic conditions, along with lower interest rates and reduced loan rejection rates, will be pivotal for revitalizing sales and profits in 2025, potentially rekindling investor interest, according to analysts at the brokerage.
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