No further revisions to Thai LTV measures: central bank

The Bank of Thailand adamant on new curbs despite signs of housing loan slowdown

The Bank of Thailand (BOT) will not relent on recently introduced macroprudential regulations even though mortgage lending has shown signs of decelerating, NNT reported.

The loan-to-value (LTV) rules implemented from April will continue despite lower-than-projected mortgage lending figures this month and the previous one.

The contraction of the mortgage market has been attributed to accelerated transactions and ownership transfers from the fourth quarter of 2018, according to central bank governor Veerathai Santiprabhob.

As a result, the BOT will defer decisions on LTV regulations until it has a clearer picture of their impact on the property sector.

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In April, the central bank lowered the LTV ratio to 80 percent for borrowers seeking residences valued at THB10 million (USD314,700) or higher. Officials also required a minimum downpayment of 10 to 20 percent for second mortgages, and 30 percent for subsequent mortgages.

GH Bank, a state-run lender, recorded housing loan extensions at THB9 billion in April, down from the average monthly loan target of THB15 billion.

“At the meeting with the Finance Ministry and the Bank of Thailand, we proposed a method and loan conditions to help support low-income people who need mortgages from state-owned banks,” Chatchai Sirilai, president of GH Bank, told the Bangkok Post.

Commercial banks’ net loans dipped by THB60.1 billion in January, the Post also reported, citing Kasikorn Research Center.