CGS International Securities (Thailand) (CGSI) indicates that the momentum of earnings recovery for major property developers, including AP, LH, LPN, PSH, QH, SPALI, SIRI, ORI, and SC, is expected to strengthen in the fourth quarter of 2025.
Normalized operating profit for the sector is forecast to reach THB 5.62 billion, marking a 9.8% increase quarter-on-quarter (QoQ) and a 3% year-on-year (YoY) rise—constituting the highest quarterly profit of 2025. Revenue from real estate businesses is similarly projected to expand by 24.5% QoQ and 0.9% YoY, hitting THB 45.5 billion.
This growth is primarily driven by accelerated property transfers and increased project stock clearance. However, the gross profit margin (GPM) is expected to soften slightly to 29.3% from 29.9% due to promotional activities aimed at boosting transfers before year-end, according to CGSI.
Despite a solid fourth quarter, the brokerage firm estimates that the sector’s normalized profit for the year 2025 will fall 22.4% YoY to THB 19.02 billion. This is attributed to a decrease in property transfers, diminished GPM, and reduced profit contributions from joint ventures.
Nevertheless, a strong recovery is anticipated in 2026, with normalized profits likely to rebound by 14.9% YoY. The recovery is underpinned by a low base in 2025, expectations of higher property transfer volumes, and stable GPMs from real estate sales.
Larger developers such as AP, SIRI, and SPALI are expected to continue growing their market share in 2026 thanks to consistent new project launches, attractive mortgage interest rates, and more lenient bank loan approvals. CGSI further notes that pricing competition should ease in the second half of 2026 as new supply and project inventories decline.
In the Bangkok property market, a modest recovery is forecast for 2026 following three years of slowdown. According to Agency for Real Estate Affairs (AREA) data, developers launched 259 new projects with a total of 41,490 units worth THB 290.6 billion in 2025, representing a decline of 29.8% YoY.
Sales volumes also contracted to 50,472 units, worth THB 285.9 billion, down 12% YoY, due to subdued purchasing power, stricter lending criteria, a sluggish economy, and the impact of the March 2025 earthquake. This resulted in a slight year-end increase in available stock—up 0.7% YoY to THB 128.6 billion—mainly due to a 9.8% YoY jump in detached house inventory.
AREA projects new launches and residential presales in Bangkok to rise by 5% in 2026 to 43,565 and 52,996 units, respectively. This positive outlook is supported by a low base, prospects for lower interest rates, and growing demand from foreign buyers in major tourist destinations.
CGSI maintains a ‘Neutral’ recommendation on the property sector due to persistent macroeconomic headwinds. However, current sector valuations, trading at a 2026 P/E of 8.1x, are considered attractive. AP, SPALI, and SIRI are recommended as top picks, expected to deliver strong profit growth in 2026 with dividend yields ranging 6.2–6.4% in 2025–2026.
Meanwhile, the sector could face downside risks from ongoing economic uncertainty, slower GDP growth, and new U.S. tariff policies under President Donald Trump, as well as potentially lower-than-expected property transfers.
Conversely, there are upside factors such as possible interest rate cuts in the first half of 2026 and proposed extensions of foreign leaseholds to 99 years, which could further revive demand from international buyers in the high-end market.
