Banks are urging prospective homebuyers to make purchasing decisions within the first half of the year before costs rise further, amid concerns that inflation could increase under wartime conditions.
Speaking at a seminar on the 2026 property market on Wednesday, Natthapol Luepromchai, executive vice-president at Kasikornbank (KBank), said the escalating war in the Middle East could push up oil prices and inflation worldwide, making the likelihood of more interest rate cuts very unlikely.
"As homebuyers' costs are expected to rise, we advise consumers who are planning to purchase a house to make their decision within the first half of this year, given the heightened risks and uncertainties," he said.
The Bank of Thailand's Monetary Policy Committee (MPC) reduced its policy rate by 25 basis points last month to 1%. Over the past year, the central bank has cut the policy rate by a total of 1 percentage point as part of its monetary easing cycle. As part of rate transmission, commercial banks have continued to lower their lending interest rates.
Mr Natthapol said KBank recorded new housing loan growth of 4-5% in the first two months of 2026 on a year-on-year basis, despite a slight decline in new loan applications during the period. The growth was primarily driven by the upper-income segment, where home values per unit are higher.
The bank plans to monitor the Mideast conflict throughout March. The risk has dampened consumer confidence and weakened purchasing power, he said.
KBank, the country's third-largest lender by total assets, is targeting single-digit growth in housing loans this year in terms of new loan bookings, slowing from double-digit growth recorded the previous year.
Surat Leelataviwat, head of the commercial lending group at Kiatnakin Phatra Financial Group (KKP), said financially prepared homebuyers may make faster purchasing decisions in a highly uncertain environment.
For developers, their challenges are expected to intensify due to the slower growth of the Thai economy and property market, as well as heightened tensions from the war. Given the glut of property inventory, developers are expected to take more time to complete residential projects, he said.
"Project development is expected to take around five years on average, compared with about two years previously. Meanwhile, low-rise projects could take up to eight years due to slower sales," said Mr Surat.
Under such conditions, cash-flow management has become crucial for developers amid the slowdown in the country's economy and property market, he said. KKP advises its property developer clients to scale down new investment projects with leaner designs in order to mitigate risks and access appropriate bank financing.
The bank typically requires a pre-sale rate of around 40% before approving project financing, and this criterion remains unchanged.
However, it has become increasingly difficult for developers to meet the requirements amid slower economic growth, a sluggish property market, and weaker purchasing power among homebuyers.
KKP forecasts Thai GDP growth of 1.6% this year, with household income expected to increase at a similar pace. As a result, opportunities for Thais to purchase new homes are likely to remain limited, Mr Surat said.
