CHIANG RAI – Thailand’s property market is feeling the squeeze. High household debt, plus tighter bank lending rules, is pushing mortgage rejection rates to worrying levels. On average, around 40% of applications are turned down, and for homes priced under 3 million baht, the rate can climb to 70%.
That funding squeeze is changing how people think about housing. Around 66% of younger buyers, mainly Gen Z and Millennials, are choosing to rent instead of buy. Many people want the freedom to move, and they’re wary of committing to long-term homeownership while the economy remains uncertain.
Developers are adjusting to match demand. More are focusing on luxury units and rental-led projects to stay afloat. For many households, the old goal of owning a home is slipping away, and Thailand is starting to look more like a “Generation Rent” market.
Data shared by LWS Wisdom and Solution paints a clear picture: over 66% of younger Thais are choosing to rent rather than buy. Home ownership is still a common goal for middle-income households, but the economy is making it harder to turn that goal into reality.
Three big reasons explain why many people can’t buy in Thailand
- Stable income, but the bank still says no
Mortgage rejections have risen to around 40% for homes priced under 3 million baht, the bracket that should suit first-time buyers. It’s also where refusals are highest. High household debt and tighter bank checks mean more applicants fail affordability tests. - Property prices keep rising faster than pay
Over the past seven years, the property price index has increased by about 3 to 4% a year on average. A home that once cost 1,000,000 baht now sits at roughly 1,280,000 baht, up by almost 300,000 baht. Many wages have not grown at the same pace, so buyers feel they are chasing prices they can’t catch. - Rent isn’t rising in the same way; in some places, it’s fallen
In Bangkok’s CBD, condo rents in 2024 dropped by around 3.5 to 4.5%, while sale prices continued to climb. Monthly rent can feel lighter than a mortgage payment when interest rates can change, so renting has become a main plan, not just a short pause before buying.
On one side, this shift looks like sensible behaviour, people avoiding debts they can’t handle. On the other hand, it’s a warning sign, more households are being pushed away from long-term asset building.
A financial fear loop, when a whole country puts the future on hold
Ipsos, in its “What Worries Thailand? H2 2025” survey (around 500 people aged 20 to 74), shows a deeper worry than headline numbers.
Key findings include:
- 76% believe Thailand is in a recession
- 52% don’t feel confident buying big-ticket items such as a home or car (up from last year)
- 48% don’t feel confident investing for the future, including retirement and children’s education
Almost 4 in 10 said they would rather have been born in 1975, because life felt easier and more stable then. That points to a wider feeling of being stuck in today’s economic structure.
Figures linked to the National Economic and Social Development Council and the credit bureau make the strain look even sharper:
- Personal loans overdue by more than 90 days total about 1.24 trillion baht, up around 6.9% year on year
- The Legal Execution Department has listed 67,641 seized homes for auction, up 210%, worth more than 120 billion baht in total.
These are not just report numbers. They reflect households cutting spending, delaying buying a home, delaying a car, or even putting off starting a family.
At the same time, the wider economy is weak. GDP in Q3 2025 grew only 1.2%. Some research houses, including SCB EIC, have warned of a risk of a technical recession, with full-year growth possibly below 1%.
Put together, this feeds what analysts call a Financial Fear Loop. When income feels uncertain, people avoid large purchases. Sales fall, firms slow investment, hiring stalls, household income stays flat, and fear grows. It becomes a cycle that drags on the real economy.
For many people, that cycle means delaying life plans, from the first home to saving for retirement.
Chiang Rai goes from border town to a new centre of opportunity
While the national mood is cautious, Chiang Rai in 2025 is being watched as a possible turning point.
1) The Den Chai, Chiang Rai, Chiang Khong double-track railway
This major route in eastern Lanna runs for more than 323 km, with investment estimated at 72,920 to 85,345 million baht. Progress in 2025 is reported at around 41 to 46%, with service expected in 2028. It should reduce travel times and strengthen Chiang Rai’s role as a logistics hub linked to border trade across the GMS.
This has also lifted land prices around the 26 station areas. Some reports suggest plots in front of certain stations have jumped to as much as 10 times earlier official valuations.
2) Land prices and location potential in Chiang Rai
The Treasury Department’s land appraisal for 2023 to 2026 places Chiang Rai at roughly 175 to 85,000 baht per square wah. That is still below larger northern hubs like Chiang Mai. But in some areas, market prices have exceeded appraisals by 20 to 300%, and prime locations are reported to be rising by 5 to 15% per year.
Areas getting the most attention include:
- Mae Korn, a key business zone linked to Central, HomePro, and the main commercial areas
- Ban Du, near Mae Fah Luang Airport and the university, is suited to student and medical staff rentals
- Rim Kok, riverside living with a premium feel, popular with retirees and higher-income buyers looking for a second home
- Wiang Burapha Road (bypass), a core route for larger detached-home projects that need more land but still offer easy city access
In this context, Chiang Rai is no longer seen only as a far-north tourism city. It is being positioned as a modern economic and logistics centre. For property, that means it’s not just about a place to live, it’s also about medium- to long-term price growth.
Low rates and lower fees, a short window for buyers who are ready
Beyond infrastructure, monetary policy, and government support in 2025, there has been a brief opening for those in a position to buy.
- The Monetary Policy Committee cut the policy rate to 1.50% per year, pushing banks to reduce reference rates such as MRR, MLR, and MOR.
- The government reduced transfer fees from 2% to 0.01%, and mortgage registration fees from 1% to 0.01%, for homes priced up to 7 million baht.
Experts estimate that a 3 million baht home purchase could save almost 90,000 baht in fees compared with standard charges. At 5 to 7 million baht, the savings can reach the hundreds of thousands. Many buyers can put that money into renovations or keep it as emergency cash.
Looser Loan-to-Value (LTV) rules have also helped. Some products allow borrowing up to 100 to 110% of the appraised value for first homes, which reduces the need for a large deposit for people who can afford monthly payments but don’t have much cash upfront.
Mortgage rate competition is fierce
In 2025, banks and lenders have pushed hard to win home loan customers across both state banks and major commercial banks.
Government Housing Bank (GH Bank)
- Offers fixed mortgage rates around 2.50% in the first year, with an average of roughly 3% across the first three years
- Runs schemes like “Baan Lan Lan, Phase 3” for homes up to 1.5 million baht, with terms up to 40 years, aimed at first-time buyers on lower to middle incomes
Government Savings Bank (GSB)
- Offers “GSB Green Home Loan”, with first-year rates starting around 1.89%, and a three-year average of about 2.65 to 2.89%
- In some cases, allows loans up to 110% of appraised value for homes in the 3 to 7 million baht range
Major commercial banks, including Siam Commercial Bank, Kasikornbank, Krung Thai Bank, Bangkok Bank, Bank of Ayudhya, and others, have also promoted low first-year rates (some below 2%). Many highlight first-year repayments of around 3,000 baht per million borrowed, or three-year average rates in the 2.8 to 3.4% range.
The headline rate is not the full story. Borrowers need to check what happens after year three, when rates often revert to MRR or MLR. One example often used shows the risk clearly:
- Borrow 3,000,000 baht, average 3% interest, 30-year term, the first monthly payment might be around 15,800 baht
- After the promotional period, if the rate rises towards 6.5%, the payment could jump to around 24,500 baht a month
A gap of nearly 9,000 baht a month changes day-to-day life. Many borrowers miss this at signing if they do not plan for refinancing or negotiating a retention rate.
Chiang Rai property, from low-rise homes to higher-yield condos
Developers in Chiang Rai, both national and local, have started adjusting to changing demand.
- National groups, such as CPN Residence, Supalai, and others, have launched detached homes, townhomes, and premium housing in areas like Mae Korn, Ban Du, and along the bypass. These projects target local families and out-of-province buyers looking for a second home.
- Larger local developers, such as Sinthanee Property, are using their local knowledge and strong promotions, including full appliance packages, free air conditioning, and high-value vouchers, to convert buyers who are torn between renting and buying.
In the condo market, Chiang Rai’s profile is becoming clearer, especially for projects in town and near shopping centres. These units can be rented to private-sector staff, public servants, and long-stay residents. Some projects have been estimated to reach a gross rental yield of around 7% per year, higher than averages in many bigger provinces.
Compared with the higher deposit and monthly costs of landed homes, a city-centre Chiang Rai condo has become another option for investors who can accept risk and want exposure outside Bangkok.
How people are now renting or before taking on a purchase
The bigger issue in 2025 is not just buy or don’t buy. It’s also where to buy, when to buy, and what debt structure is safe.
For those with unstable income or heavy revolving debt, continuing to rent can be the safer short-term move. It protects cash flow and lowers pressure while the economy remains uncertain.
For those who are ready, a stable income, manageable existing debt, and a plan to hold property long term, Chiang Rai can stand out as a rare opportunity, supported by:
- Lower interest rates than in recent years
- Government fee cuts that can save hundreds of thousands of baht
- New infrastructure that can affect future property values
- A rental market that is growing in key locations
The best decisions come from clear numbers, not hype and not fear. It helps to weigh income security, existing debt, and local growth prospects before committing.
A national crisis, a city-level opening, Chiang Rai at a crossroads
Thailand in 2025 is dealing with a financial fear loop. Many people are delaying major life choices. A home, once seen as a sign of stability, now feels like a risk many don’t want. A 40% rejection rate, overdue debt in the trillions, and more than 67,000 seized homes are not abstract figures; they reflect real families under pressure.
At the same time, Chiang Rai is moving through a major shift. The double-track railway is building a logistics network, land prices are responding, and low rates plus reduced government fees have created a short window for buyers who are prepared.
There is no single answer that fits everyone. Some will rent longer, with a plan, to protect their finances. Others will buy at the right time, seeing Chiang Rai as a place to live, retire, or invest.
What matters most is not deciding from fear alone or hope alone. Use facts, terms, and realistic budgets as the guide. As housing becomes harder to access each year, careful thinking is often what keeps the dream of a home within reach.
Source: Nakorn Chiang Rai
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