Real Estate Market Fragile, Pressuring Housing Loans in 2026

Khaosod•Economy•1d ago

Reader Briefing

Kasikorn Research Center predicts a 3% contraction in housing development loans for 2026 due to a fragile real estate market.

•The Thai real estate market shows signs of fragility, impacting construction and developer finances.
•Housing development loans are forecast to shrink by 3% in 2026.
•Developers face credit risks due to liquidity issues and difficulty in fundraising, as indicated by weakening financial ratios.
•The slowdown is evident in reduced long-term debt issuance and a contraction in pre-financing loans for developers.

•The Thai real estate market is exhibiting signs of fragility, despite a 2.0% YoY expansion in private housing construction in Q1/2026.
•Private housing construction expanded by 2.0% YoY in Q1/2026, a slowdown from 4.0% YoY in Q4/2025, indicating weakening momentum.
•The fragile market may increase pressure on developers' financial standing, especially if sales and transfers slow down.
•Factors such as a decelerating economy, incomplete consumer purchasing power recovery, and high existing inventory are challenging the market.
•Developers' Debt-to-Equity (D/E) ratio remained high at approximately 1.3–1.4 times (1.38 times in Q1/2026).
•The Debt Service Coverage Ratio (DSCR) was around 0.27-0.37 times (0.31 times in Q1/2026), indicating operational cash flow may not cover short-term debt.
•Pre-financing loans for housing development in commercial banks contracted by -6.5% YoY in Q1/2026.
•Kasikorn Research Center estimates housing development loans will contract by approximately -3.0% to -2.0% in 2026, compared to a 2.2% expansion in 2025.

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Kasikorn Research Center(ศูนย์วิจัยกสิกรไทย)ℹ️

A research center that publishes analysis and forecasts on the Thai economy and real estate market.