House Construction Budget: 6 Things You Should Know
- Home Construction Budget: Where to Start?
If you have decided to build a home and want to calculate a rough budget, the first step is to define the type of house you want. Consider whether it will be a single-story or two-story home, the construction materials to be used, and the required functions—such as the number of bedrooms, bathrooms, and parking spaces. You should also determine the usable area needed for each function and the total usable area of the house.
When defining the house design, the most important factor is ensuring it fully meets the lifestyle needs of every family member, allowing you to truly create your dream home.
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2. How to Estimate Construction Costs
If you do not yet own the land for construction, the budget consists of two main parts: the cost of purchasing the land (which depends on the location and condition of the plot) and the actual construction cost. Estimating the latter can be somewhat challenging if you are not familiar with the construction industry.
However, the Thai Appraisal & Estate Agents Foundation has compiled building construction cost estimates. Based on the latest data updated in December 2025, the construction costs for various house types are as follows: Estimated Construction Costs (Baht/sq.m.)
Single-story wooden house
Low: 11,100
Average: 12,600
High: 14,100
Two-story wooden house
Low: 9,500
Average: 12,000
High: 13,700
Wooden house on stilts (estimate based on upper floor only)
Low: 13,700
Average: 14,200
High: 16,100
Half-concrete, half-wood house
Low: 9,200
Average: 11,200
High: 12,500
Single-story concrete house
Low: 12,200
Average: 13,800
High: 16,000
Two-story concrete house (precast system)
Low: -
Average: 11,500
High: -
2–3 story concrete house
Low: 11,300
Average: 13,000
High: 16,000
Based on these estimates, if you wish to build a single-story concrete house using average-quality materials with a usable area of 150 square meters, the construction budget would be 13,800 x 150 = 2.07 million Baht.
Please note that calculating the budget this way provides only an estimate; it is not the final, actual cost. However, it gives a good indication of the construction budget required.
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3. Can I get a bank loan for the construction budget? In addition to obtaining a bank loan to purchase an existing home, one can also secure a loan specifically for home construction. If you already own the land and wish to borrow funds solely for building the house, banks typically approve a loan amount not exceeding 80–100% of the construction costs specified in the contract, subject to a cap of 80–90% of the appraised value of the land and the completed house.
For cases involving a loan to purchase land combined with a construction loan, banks sometimes assess the land value and construction costs separately. The loan amount for the land itself may range from 50–80% of the land's appraised value.
Meanwhile, the loan amount for construction costs is usually 80–100% of the costs specified in the construction contract, again subject to a maximum of 80–90% of the appraised value of the land and the completed house.
However, the final loan amount also depends on the chosen repayment period and the borrower's repayment capacity. Banks generally limit the debt burden to no more than 30–40% of the borrower's monthly income. For example, if a borrower earns 30,000 baht per month and the bank sets the debt limit at 30% of that income, the allowable monthly debt payment would be 9,000 baht; the approved loan amount would then be structured so that the repayment obligation does not exceed this capacity.
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4. You can get a loan for home construction, but you must also prepare an initial sum of money.
Typically, banks grant construction loans only after some work has already been done—such as installing pillars or pouring the concrete foundation—to ensure the funds are used for the intended purpose. Once the loan is approved, the bank disburses funds in installments rather than providing the full approved amount upfront. Repayment installments begin one month after the first disbursement.
Therefore, you need to prepare funds for the initial phase of construction. There may also be additional costs, such as mortgage registration fees, processing fees, and construction contract expenses. Ideally, you should prepare an initial budget equal to 20% of the total construction cost.
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5. How to choose a contractor without getting scammed or facing budget overruns
Choosing the wrong contractor—one who might abandon the job or cause damage—can lead to construction costs spiraling out of control. When selecting a contractor, consider recommendations from trusted sources, verify that they have a fixed address or a clear office location, and review their past work.
Additionally, select a contractor who offers a reasonable price—avoiding quotes that are either excessively high or suspiciously low.
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6. How to make payments without getting cheated
Even if a contractor appears credible and trustworthy, you should avoid making large lump-sum payments. However, payments should be made in installments based on the construction stages, as follows:
Installment 1: 5–10% of the construction value
Installment 2: Completion of pile driving
Installment 3: Completion of pile caps, grade beams, ground floor slab, and ground floor columns
Installment 4: Completion of second-floor beams, columns, and slab
Installment 5: Completion of roofing and all masonry work
Installment 6: Completion of door/window frame installation, electrical systems, and plumbing infrastructure
Installment 7: Completion of interior and exterior plastering and exterior ceiling work
Installment 8: Completion of interior ceilings, flooring, door and window installation, and primer painting
Installment 9: Completion of plumbing systems, installation of electrical fixtures and sanitary ware, and final painting
Installment 10: Site cleanup, final inspection of all plumbing and electrical systems, and project handover
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Thanks to DD Property for this useful information.
