PATTAYA, Thailand – In an era where the dream of owning a home is increasingly overshadowed by mounting debt, the latest data from Thailand’s National Credit Bureau signals growing distress in the housing sector. Non-performing loans (NPLs) in the mortgage segment surged to 232.008 billion baht in the first quarter of 2025—an alarming 16.5% year-on-year increase. The figures reflect mounting pressure on household finances, sending shockwaves through the country’s real estate credit system.
From Asset to Liability
Traditionally seen as the last asset borrowers are willing to give up, a home has long symbolized stability. But in a troubling shift, bad debt accounts in the mortgage category climbed to 156,644—up 6.1% from the same period last year. This signals not only deterioration in debt repayment capacity but also exposes deep structural vulnerabilities in household economics.
Housing Debt Outpaces Total Credit Growth
As of Q1 2025, household debt under the credit bureau’s monitoring reached 13.5 trillion baht, with housing loans maintaining the largest share at 5.12 trillion baht—a 2.5% year-on-year increase. Despite this growth, overall NPLs climbed to 8.8%, up from 8.0% last year. The housing sector, with its sharp 16.5% increase in NPLs, is now a major drag on the system.
Restructuring Before Collapse
Another warning sign is the sharp rise in pre-NPL debt restructuring (DR). Mortgage-related DR surged 34.4% quarter-on-quarter to 395.833 billion baht—second only to the auto loan segment. This reveals that many borrowers are already struggling and seeking relief, which, while preventing immediate defaults, underscores financial exhaustion across households.
Glimmers of Resilience
Amid the negative outlook, there are modest signs of recovery. Short-term delinquent mortgage debt (Special Mention or SM) decreased by 2.5%, falling to 182.018 billion baht. This suggests efforts by both borrowers and financial institutions to contain debt before it spirals into defaults. Additionally, post-default restructured debt (TDR) rose only slightly by 3.9%, to 299.783 billion baht—indicating a manageable trend, at least for now.
While the housing debt crisis may not have peaked, the current trajectory poses an unavoidable challenge to Thailand’s real estate market. Industry stakeholders must reconsider sales prices, loan conditions, and project development strategies to better align with actual purchasing power. Without systemic adjustments, the home—once a symbol of security—risks becoming a source of long-term financial hardship for many.
