Thread: BoT releases credit control measures for real estate market

well no farangs are buying these days,

Rich Thais are buying 2 kinds of assets, condos and Gold

with their excess liquidity and nowhere to park their money safely, they are buying condos en masse. All to be empty for years to come, of course

http://www.tannetwork.tv/tan/ViewData.aspx?DataID=1037496

Property Developer Expects Next Year Slowdown over Stricter Bank Control

UPDATE : 18 November 2010

A real estate developer is expecting a slowdown in the property sector next year, after the central bank imposed more control on the amount commercial banks can lend to home and condo buyers.

The company also dismisses the possibility of a housing bubble.

Kitti Tangsriwong, Managing Director of Management and Administration of listed property developer Raimon Land, anticipated more intense competition in the lower priced segment of condominium market next year, after the Bank of Thailand decided to impose restrictions on the loan to value ratio for the purchase of condominiums and houses, which is due to take effect on January 1.

He added that as a result, commercial banks will become more stringent in approving home loans, while real estate developers may have to gear down a bit.


Amid increasing concerns about a looming real estate bubble, Kitti argued that he has not yet seen any sign of a meltdown in the industry, despite a rising demand for condo units in the urban area and along mass transit routes.

He said there are not so many new condo projects this year, and Thai financial institutions currently have a strong financial footing at the moment.

Kitti reported that over the past eight years, there have been 60,000 condo occupants on record, still much lower than the 130,000 units during the last bubble burst.

BoT: Measures to control real estate loans will not affect commercial bank loans : National News Bureau of Thailand

BoT: Measures to control real estate loans will not affect commercial bank loans


BANGKOK, 22 November 2010 (NNT) - The Bank of Thailand (BoT) believes that its measures to control real estate loans will not hamper the growth of loans thanks to commercial banks’ high liquidity and low interest rates.

According to Sorasit Sun-torn-ket of the Bank of Thailand (BoT), next year’s housing loans are expected to grow further despite the Central Bank’s control measures. The growth is due to the nation’s economic expansion, commercial banks’ high liquidity, and low interest rates; all of which contribute to increase in loan demand. However, domestic political climate remains to be the only risk factor affecting commercial banks’ credit system, which could affect the country’s economy as a whole.

As for ways to control financial institutions next year, the Central bank at present sees no need to come up with strict measures, given Thailand’s economy has been expanding continuously.

Private sector speculates a 20% drop in condominium sales in 2011 : National News Bureau of Thailand

Private sector speculates a 20% drop in condominium sales in 2011

BANGKOK, 20 November 2010 (NNT) – In light of the Bank of Thailand’s decision to put in place measures aimed at controlling housing loans, the Thai Condominium Association has speculated a 20-percent drop in condominium sales next year.

The Association has voiced its concern that the BoT’s measures will make it much harder for existing developers to sell their condo units, while, at the same time, preventing new entrepreneurs from entering the sector.

According to Property Perfect Company, one of well-known developers, the measures will mainly affect the under-2-million baht condominiums and townhouses markets, given most buyers are fresh out of college or young married couples with very little savings. With a hefty down payment increase required by the Central Bank’s measures, those prospective buyers won’t be able to buy their own homes, reducing the sale in the property market by up to 20%, driving it into a tailspin.

The Association has advised that the Central Bank exclude first-time buyers from the rules, and concentrate instead on second-home buyers or speculators.

Thai Real Estate Association, meanwhile, said the reason why the Central bank opted for the measures was that over 93% of the loans made in the past several years were for properties priced under 13 million baht; 30% of those loans were granted at over 90% of the loan per value ratio, which led to an increase in non-performance loans.

Talk about kicking an industry in the balls when it is down on its knees.

Another brilliant decision from the BoT.

Originally Posted by StrontiumDog

was that over 93% of the loans made in the past several years were for properties priced under 13 million baht;

not surprising really