Condos are still going up all over Bangkok but demand is expected to drop in 2019. (File photo) New housing loans are expected to shrink by 10% this year, dragged by the central bank’s stringent mortgage lending rules and weaker condominium demand from Chinese buyers, says a senior executive at Bank of Ayudhya (BAY). Both global and domestic factors are denting demand in residential real estate and new mortgages, said Nathapol Luepromchai, BAY’s executive vice-president and head of the mortgage division. New mortgages expanded by double-digit rates in 2018, he said. The Bank of Thailand’s new loan-to-value (LTV) ratio regulation for home loans, which will take effect in April, will dampen demand, Mr Nathapol said. Brisk demand for new housing loans during the final two months last year, prompted by media reports on the central bank’s implementation of the stringent measures, are another cause for this year’s expected contraction in new mortgages, he said. Condo demand from foreigners, especially Chinese buyers, has slowed over the past few years in line with economic circumstances, both globally and on the mainland. The Chinese government’s amended regulations prevent people from transferring more than US$50 billion out of the mainland, taking a toll on the Thai property market, Mr Nathapol said. Although new mortgages are expected to contract this year, loans outstanding continue to expand because of a larger loan portfolio, he said. BAY, the country’s fifth-largest lender, targets low double-digit growth for mortgages outstanding this year, while new home loans will be flat… [Read full story]
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