17,000 New Homes in 2026: Thailand’s Real Estate Launches Fall to a 20-Year Low

Thailand’s real estate faces a test: fewer launches, higher costs, tighter credit

Thailand’s real estate market is under strain. In plain terms: new project launches are expected to fall to around 17,000 units in 2026, the lowest level in 20 years, while builders and buyers are confronting rising construction costs, weaker domestic purchasing power and strict bank lending. Our analysis explains what this means for buyers, investors and developers, and which policy fixes could change the outlook.

Why this matters right now

If you follow property Thailand, this drop is more than a slow quarter; it signals developers shifting from growth to inventory management. That affects supply, pricing, rental markets and the types of deals on offer for both domestic and foreign buyers. We think the consequences will play out over the next 18–36 months as existing stock is cleared and lending conditions either ease or harden further.

What’s driving the downturn: the main pressure points

Several concrete factors are compressing market activity. These are not theoretical — they are operational and financial realities for developers and buyers.

• Construction costs have risen by around 10–20%, driven by higher energy, transport and raw-material costs (steel, concrete, aluminium). This erodes developers’ margins and forces higher asking prices.
• Projected retail price increases of about 3–8% could follow, according to developers’ estimates, though any increase will be constrained by household purchasing power.
• Loan rejection rates are at 40–50%, which means many buyers who want to purchase cannot get financing. That breaks the link between demand and sales.
• Average sales periods have lengthened from 2–3 years to 5–6 years, so developers carry inventory and finance costs for longer.
• Foreign buyers account for about 18–20% of transactions, helping absorption but not enough to offset domestic weakness.

Taken together, these points explain why launches are being deferred and why developers are prioritising existing stock over risky new projects.

The policy asks from the private sector: what developers want

The Thai Condominium Association and other private-sector groups are pushing the government to enact measures that would ease financial pressure and restore buyer confidence. Key proposals include:

• Easing loan-to-value (LTV) rules for housing loans to improve buyers’ access to credit.
• Reducing transfer and mortgage registration fees to lower upfront transaction costs.
• Extending leasehold terms for foreign buyers from 30 years to 60 years, to make investment in leasehold units more attractive.
• Speeding up environmental impact assessment (EIA) reviews, shortening the timeline from the current 1–2 years to about 3–5 months to cut developer holding costs and accelerate project starts.
• Amending the Land and Building Tax Act so that unsold developer inventory is not taxed at the higher ‘other’ rate, which raises carrying costs.

These are practical asks. If adopted, they would reduce holding costs, lower barriers to purchase and shorten delivery timelines. But each proposal has political and fiscal trade-offs: loosening LTV rules increases borrower risk exposure, tax changes reduce state revenue, and longer leaseholds raise questions about land-use policy.

Land tax, slow absorption and why prices may rise

One of the less visible but economically important pressures is taxation on unsold stock. Since the Land and Building Tax Act took effect, unsold units held by developers are often taxed at an elevated rate classified as “other,” not as inventory for sale.

The effects are straightforward:

• Developers carry inventory longer — average sell-through is now 5–6 years — and pay higher land tax plus ongoing interest costs.
• Those costs are likely to be reflected in sales prices. Developers estimate price increases of 3–8% linked to construction and holding-cost increases.

From an investor perspective, that tax treatment shifts risk from short-term trading to longer-term holding, so buyers should scrutinise a developer’s unsold inventory before committing to off-plan purchases.

Credit conditions: the bottleneck that stops demand turning into sales

Banks have tightened underwriting and the housing loan rejection rate has surged to 40–50%. That level of rejection matters:

• It means a large share of potential buyers fail to secure mortgage financing.
• Developers cannot rely on latent demand to convert into immediate sales.

Developers are responding by testing alternative sales methods such as “rent-to-own” or staged purchase plans that reduce immediate financing dependence. We view these as tactical moves to keep cashflow and occupancy up, but not a structural fix: lending standards and household balance sheets determine the size of the sustainable buyer pool.

For buyers, the high rejection rate is both a risk and an opportunity. Those with ready cash or alternative financing can negotiate better terms; those needing bank mortgages face headwinds.

Foreign buyers: a partial cushion, not a cure

Foreign buyers account for about 18–20% of demand — an important share, but insufficient to offset the domestic slowdown. Groups most active include buyers relocating from countries facing political or economic uncertainty, such as Myanmar, Taiwan and Russia.

What foreign demand does do:

• It supports sales in specific segments, notably mid- to high-end condos in major cities and resort zones.
• It provides some cross-border liquidity and diversification for developers.

What it does not do:

• Compensate fully for a national drop in domestic purchasing power.
• Replace the need for stable domestic mortgage channels and consumer confidence.

If policymakers move to extend leaseholds from 30 to 60 years, that could boost foreign buyer appetite. But legal changes take time and do not instantly translate into loan approvals or salary-based affordability for local buyers.

Practical advice for buyers and investors right now

I’ve worked through cycle bottoms and tops; the current situation is mixed but actionable if you are cautious. Here are practical strategies based on the market realities described above:

• For cash buyers: Sellers and developers may be more negotiable.