What happened
Thailand's housing market is running into a credit wall. A survey of members of the Housing Business Association found that lenders refused 44.9% of home loan applications in the first six months of 2026. A year before, the figure was 39.8%, so refusals rose by 5.1 percentage points.
Bangkok Post reported the data on October 7. Developers told the paper that flooding in the capital is a smaller worry than whether buyers can secure financing at all.
Why banks say no
Heavy existing debt was the leading cause of refusal, behind 37.3% of rejected applications. Irregular income came next at 33.3%, followed by weak credit records at 21.6%.
The wider debt picture explains much of this. According to the Bank of Thailand, households owed 16.4 trillion baht as of the first quarter, equal to 85.9% of GDP.
Sunthorn Sathaporn, who heads the association and runs developer Sathaporn Estate, said higher interest rates are adding to borrowers' costs and making loans harder to obtain for would-be buyers. He described the housing market as still weak.
Condos: growth with caveats
Pitipat Preedanont, who leads the Thai Condominium Association, said condo sales returned to growth in the first half, though developers are still careful about new launches.
In the third quarter some firms grew more confident, he said, launching several projects that sold reasonably well. Flats near rail stations are becoming the choice for buyers priced out of houses close to Bangkok. For a similar budget they offer easier commuting than houses further out.
Floods versus financing
Pornarit Chounchaisit, who heads the Thai Real Estate Association, does not expect flooding to push people out of Bangkok. The city remains the country's main place to live and work, and floodwater eventually drains away. Heavy rain is instead making buyers check which specific districts flood again and again.
He recalled that after the earthquake in March last year, reports of damaged buildings left many people nervous about condo living. Within a few months that fear had faded.
His bigger concern is credit. A project may sell well at launch, he said, but the real test comes when buyers need a loan to take ownership. Higher rates could tighten access further. He also suggested that strong transfer numbers in the first half partly reflected buyers hurrying to close before government incentives ran out.
What it means for Bali
Thailand is a neighbouring market that investors often compare with Bali. This report exposes its soft spot: a large part of demand relies on local mortgages, and banks are now rejecting close to one application in two.
Bali's villa market for foreigners works differently. Deals are usually funded from the buyer's own money, often paid in stages as construction progresses. That makes it less sensitive to bank approvals and more sensitive to the reliability of the builder and delivery dates.
There is also a lesson about launch sales. A high sell-through rate does not mean every deal will close. In Thailand the check comes with the mortgage at handover. In Bali it comes with whether payment and construction schedules are actually met.