Kiatnakin Phatra Financial Group (KKP) forecasts that a surge in global oil prices will push housing prices up by 10% this year, primarily affecting homebuyers in the mass-market segment.
Rising oil prices, driven by escalating tensions in the Middle East, have significantly increased construction material costs. This has created a new cost base, prompting developers of new housing projects to raise selling prices by 5-10%, according to KKP's corporate lending division.
Given the assumption of rising house prices, KKP expects the mid- to lower-income housing segment to face a substantial slowdown. Meanwhile, property transfers are projected to decline to 290,000 units in 2026, down from 316,214 units in 2025, marking the lowest level in eight years.
At present, Thailand consumes around 124 million litres of refined oil per day and relies heavily on crude oil imports.
Potential disruptions, such as the closure of the Strait of Hormuz, have pushed global crude prices above US$110-120 per barrel, raising production and transportation costs for key construction materials, especially cement, concrete and steel.
"These impacts are most evident in standard housing units sized 120-170 square metres, priced between 2-5 million baht -- the largest segment in Bangkok and surrounding areas -- accounting for 54% of total sales, or around 76.2 billion baht in value," KKP stated.
This housing segment is largely concentrated in suburban areas. Key affected zones include Rangsit–Pathum Thani, with 19,300 unsold units worth 67.5 billion baht; Bang Bua Thong–Nonthaburi, with 18,100 units worth 63.3 billion baht; and Bangna–Samut Prakan, with 16,400 units worth 57.4 billion baht.
The oil price surge is also expected to create inflationary pressure, prompting global central banks -- including the Bank of Thailand -- to maintain a tight monetary policy stance by keeping policy rates elevated or even raising them further.
Potential interest rate increases would lead to higher monthly mortgage payments, reducing borrowing capacity and delaying purchasing decisions for many households, according to KKP.
Under this scenario, KKP believes it is an appropriate time for financially capable homebuyers to apply for mortgage loans in order to lock in lower housing prices and interest rates.
"With geopolitical uncertainty potentially driving global borrowing costs higher, securing a mortgage now -- especially with fixed rates for the first 1-3 years -- can protect buyers from future rate hikes and provide financial stability," KKP noted.
Moreover, purchasing completed homes from existing inventory would allow buyers to benefit from older cost bases, effectively enabling purchases at pre-inflation prices.
In addition, weaker market demand has led developers to launch aggressive promotions to improve cash flow, offering discounts and incentives rarely seen under normal market conditions.
At the same time, KKP also advises developers to urgently lock in material prices and manage liquidity by clearing existing inventory.
