PATTAYA, Thailand – Thailand’s housing loan market is projected to remain largely flat in 2026, reflecting continued pressure from weak purchasing power, high household debt levels, and a sluggish economic recovery that continues to weigh on borrowers’ repayment capacity. Overall mortgage growth in the Thai banking system is expected to range between -0.5% and 0.0% year-on-year in 2026, following a contraction of around -0.5% in 2025, according to the outlook. The forecast highlights a slow and limited recovery in housing finance activity, particularly if domestic demand fails to strengthen meaningfully.
While housing loans showed a brief return to growth of around 1.0% year-on-year in March–April 2026, analysts caution that this improvement should be interpreted carefully. The rebound is partly attributed to a low base effect, as homebuyers delayed purchasing decisions in the previous year while waiting for clarity on government fee reductions and loan-to-value (LTV) easing measures. A closer look at new mortgage lending indicates that the apparent recovery does not fully reflect genuine new housing demand. Refinancing activity has increased significantly, accounting for approximately 35.2% of total new housing loans in the first four months of 2026. This suggests that a large portion of lending growth is driven by borrowers switching financial institutions or restructuring existing debt, rather than new home purchases.
At the same time, banks remain cautious in their lending criteria. The loan-to-value (LTV) ratio has moderated across both low- and high-priced housing segments, reflecting tighter risk management and more conservative approval standards. This has further constrained credit expansion for certain borrower groups. The extension of relaxed LTV rules until June 2027 is expected to provide some support to the market. The policy is likely to help developers reduce unsold inventory and offer more flexibility to buyers, particularly those with stable incomes and repayment capacity. However, its impact is expected to be limited in reversing the overall trend. Analysts note that while LTV relaxation helps ease down payment requirements, the primary constraint on housing loan growth remains household financial health, income stability, and broader economic conditions. As a result, the mortgage market is likely to remain subdued despite supportive policy measures.
