Bank of Thailand Cuts Key Rate to 1.50%: Impact on Real Estate Market
Bank of Thailand Cuts Key Rate to 1.50%: What It Means for Property Buyers
In August, the Bank of Thailand once again lowered its key interest rate — now down to 1.50%. This is the fourth cut in the past ten months and the lowest level in three years. The reasons are clear: the economy is struggling, domestic consumption remains weak, tourism has not yet returned to pre-pandemic levels, and new trade tariffs are weighing on exports.
At first glance, this seems like news only for financial analysts. But in fact, it directly affects anyone planning to buy property in Thailand.
Why lower the rate?
The key rate is the benchmark for loans and deposits. The lower the rate, the cheaper money becomes in the economy. The government uses this tool to encourage both businesses and individuals to spend and invest.
At 1.50%, Thailand’s rate is near record lows. This move is designed to support the economy: banks can issue cheaper loans, companies can finance new projects more easily, and households are encouraged to spend.
At 1.50%, Thailand’s rate is near record lows. This move is designed to support the economy: banks can issue cheaper loans, companies can finance new projects more easily, and households are encouraged to spend.
How does this affect real estate?
In Russia, the word “rate” immediately brings to mind mortgages. In Thailand, however, traditional mortgages are almost unavailable for foreigners. That’s why the Bank of Thailand’s policy doesn’t directly impact international buyers.
But the indirect effect is important:
But the indirect effect is important:
- Developers gain access to cheaper financing. This means they can launch more projects and continue offering installment plans on attractive terms.
- Domestic buyers become more active. Thai buyers use loans to purchase property, and with lower rates, demand grows.
- Rising demand drives up prices. Even if the broader economy looks weak, property values continue to increase.
What’s happening on the market now
- The resale market is picking up: many local families are taking advantage of cheaper credit to buy apartments.
- On the primary market, the main news for foreigners is that developers keep offering 0% installment plans for 2–4 years.
For Russian and CIS buyers, this means: while the lower rate primarily benefits Thais, foreigners also win — thanks to more affordable developer installment schemes. Typical terms: 20% down payment, the rest paid gradually during construction, with no extra charges.
Returns in numbers
Let’s look at an example:
Rental income: 20,000 THB/month (~52,000 RUB)
Annual rental income: 240,000 THB (~630,000 RUB)
Price growth in 3 years: +20% = +720,000 THB
Total: almost 1M THB profit (~2.6M RUB)
Rental: ~30,000 THB/month
Three-year rental income: over 1M THB
Plus capital appreciation on top
- Pattaya: Studio apartment by the sea, 30 m², price 3.6M THB (~9.3M RUB)
Rental income: 20,000 THB/month (~52,000 RUB)
Annual rental income: 240,000 THB (~630,000 RUB)
Price growth in 3 years: +20% = +720,000 THB
Total: almost 1M THB profit (~2.6M RUB)
- Phuket: One-bedroom apartment
Rental: ~30,000 THB/month
Three-year rental income: over 1M THB
Plus capital appreciation on top
What does the rate cut mean for Russian buyers?
In short: the 1.50% rate does not make mortgages available for foreigners, but it creates an environment where developers are eager to offer installments. For buyers, this is a chance to lock in today’s price and pay gradually while the project is under construction.
Put simply: the government is stimulating local buyers, and foreigners are enjoying the same benefits — via developer installment plans.
Put simply: the government is stimulating local buyers, and foreigners are enjoying the same benefits — via developer installment plans.
FAQ
Will property prices go down because of the rate cut?
No. On the contrary, demand will rise, and prices will keep climbing.
Is a mortgage available for foreigners at 1.50%?
Formally yes, but Thai banks rarely lend to Russians. The real tool is developer installment plans.
What’s better: Pattaya or Phuket?
Are there risks with installments?
The main risk is choosing an unreliable developer. Always check project details and legal documents.
Should I wait for further rate cuts?
Unlikely. The rate is already at its lowest in three years. For the real estate market, this means: prices will keep rising.
No. On the contrary, demand will rise, and prices will keep climbing.
Is a mortgage available for foreigners at 1.50%?
Formally yes, but Thai banks rarely lend to Russians. The real tool is developer installment plans.
What’s better: Pattaya or Phuket?
- Pattaya — lower entry price, easier resale.
- Phuket — higher entry price, but stronger rental yields.
Are there risks with installments?
The main risk is choosing an unreliable developer. Always check project details and legal documents.
Should I wait for further rate cuts?
Unlikely. The rate is already at its lowest in three years. For the real estate market, this means: prices will keep rising.