With the revival of real estate demand in Thailand, the temporary easing of credit restrictions may stimulate the mortgage market.
Alonkot Boonmasuk, Secretary-General of the Housing Finance Association, says that easing the credit limit (LTV) will help increase the mortgage market by another 0.3-0.7% in 2022.
"The increase in the LTV ratio is a positive factor contributing to the growth of the housing market, which has slowed down since 2019," he said. "If Covid-19 is under control, the market will recover faster." Last month, the Bank of Thailand relaxed LTV limits to 100% for second and third home purchases, previously this limit was 70-90%. The relaxation period will run from October 20, 2021, to December 31, 2022.
Weak local demand and lack of foreign investment are among the most significant factors. At the same time, the total volume of unsold housing stock remains high, forcing developers to offer buyers more interesting options for improving competitiveness. The number of transactions involving credit funds continued to grow in 2021, and the indicator increased by 6.1% compared to last year. In 2020, this figure was 5.9%.