Apartment market: Q2 price growth, diverse promotional strategies

According to data from the Real Estate Information Center (REIC) of the Thai government's Housing Bank, in the second quarter of 2025, the overall apartment market in Bangkok and its surrounding areas saw a year-on-year increase of 1.4% in the sales price index for new houses, mainly due to rising prices of construction materials, labor, and land in prime locations, resulting in high development costs. However, due to the impact of the earthquake at the end of March, the average price of apartments decreased by 0.8% quarter on quarter, and consumer confidence in some areas, especially high-rise buildings, was dampened. The Bangkok apartment price index for the second quarter was 162.2 points, a year-on-year increase of 2.2%. Although there was a slight decrease of 0.7% compared to the previous quarter, the overall trend showed a horizontal upward trend.

Sukhoi is still a prime location, with apartments priced between 5 million and 7.5 million Thai baht, continuing to attract attention from self occupied homebuyers and urban investors. On the contrary, there are clear signs of a slowdown in the real estate market in the surrounding areas of Bangkok. The price index of apartments in Bukit Bintang and Bukit Bintang reached 145.6 points, a year-on-year decrease of 1.5% and a month on month decrease of 1.2%. The Bukit Bintang Pagoda area is particularly prominent, with apartments priced between 1.5 million and 2 million Thai baht experiencing the largest price decline.

This reflects the intensification of competition in the mid to low end market, which is more sensitive to economic changes and consumer behavior than urban areas. Suburban developers rely more on pricing strategies, such as direct discounts or giveaways, to drive consumer purchasing decisions. At the same time as the price reduction this quarter, the promotion strategy has been significantly strengthened. The proportion of cash discounts has increased from 15.4% in the previous quarter to 37.5%, gifts account for 38.5% of sales, and construction insurance accounts for 3.4%. This is a new measure launched to address consumer concerns after the earthquake, reflecting market psychological adjustments. The exemption of transfer fees has been increased from 19.8% to 20.7%, demonstrating the efforts made by developers to reduce customer purchasing costs during a period when market confidence has not fully recovered. Despite short-term price fluctuations, the overall Bangkok apartment market remains on an upward trend as project development costs have not decreased. The surrounding areas of Bangkok need to pay attention to the recovery of consumer demand and the fierce competition in the low-priced market. The Thai apartment market is currently in a new balance of rising costs and incomplete confidence recovery.