Full 100% Loans Available, But Without Income Growth, Houses Remain Hard to Sell

After the Bank of Thailand extended the relaxed LTV (loan-to-value ratio) measure allowing 100% financing for another year, many sectors hoped the real estate market would revive. However, from the current financial perspective, it seems that "loan amounts" may not be the biggest issue compared to "buyer income."  The key constraint is buyers' actual income rather than credit limits.

With incomes not growing in line with living costs and household debt still rising, no matter how much the Bank of Thailand permits full loans, if financial institutions assess that "borrowers cannot repay," loan approvals will remain firmly closed.

When sales figures don't reflect real income.

The clearest warning sign in Thailand's real estate market is reflected in Q1 2026 earnings of 16 leading property companies. The era of competing with new project launches to generate buzz has ended. Today, survival depends on who can clear stock and convert bookings into actual transfers—the winners will be those who endure.

According to DDproperty data summarizing total revenues of 50.881 billion baht and net profits of 5.335 billion baht, market fragility and lack of clear direction are evident.

• The survival group with strong upper-tier customers includes major players like AP Thailand, leading with revenues of 9.59 billion baht (up 24% YoY) and profits of 903 million baht. Meanwhile, Sansiri and Land & Houses have stable or slightly declining revenues but maintain good profit levels due to their predominantly middle-to-upper-class clientele who have stronger purchasing power and are less affected by debt issues.
• The stable revenue but shrinking profit group includes companies facing "free fatigue," such as Supalai, with 7% revenue growth but 1% profit decline, and Sena Development, showing declines in both revenue and profit. This reflects rising financial costs and the need to offer discounts and promotions to attract customers.
• The severely affected group shows clear warning signs, especially among mid-to-lower market players like L.P.N., whose revenue grew to 1.864 billion baht but net profit plunged dramatically to just 0.41 million baht (a 98% drop), or Ananda Development, still burdened with negative performance despite reduced losses.

These phenomena indicate that the main problem in real estate now is not "lack of demand for homes" but the tough hurdle of "loan denials." Massive booking numbers on launch days turn into mere paper figures later rejected by banks.

In-depth analysis from Kasikorn Research Center: Structural problems that LTV cannot fix.

Kasikorn Research Center's analysis aligns with this view, forecasting limited recovery in housing loans in 2026. They estimate that new loans (post-financing) from commercial banks this year may see zero or slightly negative growth (-0.5% to 0.0%). The main reasons why the 100% LTV measure has failed to stimulate the market lie in three hidden negative factors.

1. Financial institutions' tightness (Post-Financing contraction).

Although the law allows 100% loans, in practice, commercial banks have tightened credit approval, especially for homes priced under 10 million baht. The average loan-to-collateral value ratio has dropped as banks manage risk to avoid non-performing loans (NPLs). Customers with high existing debt, unstable income, or no savings are rejected early in the process.

2. Illusory loan growth figures, actually representing "refinancing."

At first glance, housing loans in Q1 2026 seem to have grown 1.0% YoY. But deeper analysis shows that 33.8% (over one-third) of new loans were refinancing by existing borrowers seeking to reduce interest burdens for survival, not fresh money driving real estate growth.

3. Developers also face tight conditions (Pre-Financing contraction).

The impact extends beyond buyers to developers. Outstanding development loans (pre-financing) in Q1 2026 shrank by 6.5% YoY. Banks are stricter with small developers, and bond market liquidity is tight (long-term bond issuance in the first four months dropped 27.6%). As a result, most real estate companies have shifted focus to "maintaining liquidity and clearing existing stock" rather than risking new projects.

Survival strategies in a tough market: Changing the sales game.

With the middle-to-lower segments clearly fragile, real estate developers can no longer sell homes as before. Many are shifting strategies to target niche segments with stronger purchasing power and higher loan approval rates, such as:

• Pet-friendly condominiums targeting young singles who own pets, growing counter to the economic downturn.
• Energy-efficient homes/ESG concepts attracting high-income buyers mindful of long-term costs.
• Housing for the aging society, products addressing Thailand's current demographic structure.

In the end, it must be accepted that the 100% LTV measure is only a tool to keep the market from worsening, not a main factor to rapidly revive real estate growth.

As long as the overall economy slows, household debt remains high, and buyers' incomes do not grow, financial institutions will maintain strict loan approvals. Even with full loan limits, if buyers cannot repay, owning a home remains difficult.

Sources: DDproperty, Kasikorn Research Center.

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