From Ownership to Renting: How Housing Systems in Thailand Shift Toward Rental Markets

Purpose: This article examines whether Thailand's residential housing system is shifting from owner-occupied, for-sale housing toward a rental model, and whether affordability pressure and bank credit risk explain that shift. Research design, data, and methodology: This study employs quarterly Bank of Thailand data for 2010Q1 to 2024Q4 on the residential property price index, a household income proxy, mortgage and developer credit, and sectoral non-performing loans. An indexed price-to-income ratio measures ownership affordability and a credit-mix indicator the tilt of bank lending toward developers. Two reduced-form time-series equations relate lagged affordability and non-performing loan ratios to mortgage credit growth and changes in the credit mix, with output growth and the policy rate as controls. The results show that the price-to-income ratio averaged 1.12 over the sample and peaked at 1.40, that a higher lagged affordability ratio is associated with slower mortgage credit growth, and that higher affordability and real estate non-performing loan ratios are associated with a reallocation of lending toward developers. The associations hold across alternative thresholds, lag lengths, and sample windows. The findings of this study suggest that Thailand's rental turn reflects affordability limits and prudential credit management within the banking system rather than a change in household preferences.