The temporary relaxation of the Loan-to-Value (LTV) measures is appropriate for a sluggish housing market, though its impact may be limited … The housing market in 2025 is expected to continue contracting, albeit at a slower pace compared to the previous
SCB EIC views the temporary relaxation of the LTV regulation as part of broader efforts to ease financial conditions.
The Bank of Thailand has temporarily relaxed the Loan-to-Value (LTV) regulations to support the real estate sector.
The revised measure allows a maximum LTV ratio of 100% for housing loans in the following cases: (1) For properties valued below 10 million baht, starting from the borrower’s second housing loan onward; and (2) For properties valued at 10 million baht or more, starting from the borrower’s first housing loan.
This temporary measure applies to loan agreements made between May 1, 2025, and June 30, 2026.
SCB EIC views the temporary relaxation of the LTV regulation as part of broader efforts to ease financial conditions, which is appropriate given the current sluggish state of the housing market. However, the positive impact on boosting housing sales is expected to be limited.
The measure may provide short-term support to the market, helping to gradually absorb some of the housing inventory priced below 10 million baht. This would mainly come from demand among property investors and individuals purchasing second homes—specifically those who already plan to buy and have the financial qualifications to access housing loans.
The recovery of the housing market continues to face pressure from limited credit access among middle- to lower-income buyers, who still require time for income recovery and debt burden reduction.
Additional government measures could help support the housing market, particularly the extension of the reduced transfer and mortgage registration fees to 0.01% for homes priced at no more than 7 million baht until the end of 2025—a proposal already submitted by developers and under consideration by the Ministry of Finance.
Moreover, the government may consider other developer-proposed measures to provide short-term market support. These may include reductions in the land and building tax rate, initiatives to promote the purchase of second-hand homes through tax incentives and expanded credit lines, as well as targeted housing loan programs for middle- to lower-income groups through specialized financial institutions. Such programs could involve increasing both loan amounts and the maximum eligible property prices to improve access to credit in line with rising housing prices.
