Mr. Natthapol Leuphrornchai, Assistant Managing Director of the Housing Loan Division at Krungsri Bank, believes that the overall real estate and housing loan market since 2017 is transitioning into a 'New Normal' phase. Moving forward, the growth rate of the real estate market is expected to be in the single digits, aligning more closely with genuine consumer demand, which will lead to sustainable growth in the future. Previously, the real estate market experienced a significant leap with double-digit growth due to government stimulus measures that created artificial demand.

        The main factors driving the real estate sector into the 'New Normal' include increased joint ventures between Thai real estate companies and foreign investors, allowing for greater market expansion towards foreign investors. Meanwhile, Thai investors have reduced their profit-seeking purchases to mitigate the risks associated with a potential real estate bubble. However, caution is needed regarding negative factors arising from the business sector, where many developers are choosing to launch projects gradually based on market demand, reducing rapid sales. This may impact banks' ability to issue loans in line with the slower growth of the new housing market. At the same time, banks must accommodate the demand for new loans from the Gen Y customer segment, which currently struggles with financial discipline and high debt levels, making it increasingly difficult for banks to approve loans, especially for homes and condominiums priced below 3 million baht.

        Given the intense competition among banks to offer promotional interest rate reductions and premium offerings, coupled with accumulated real estate stock, many projects are reducing prices to attract customers aggressively. Therefore, this period presents a golden opportunity for consumers looking to purchase housing, and they should act quickly before the economy recovers and interest rates rise again.

        Regarding the outlook for housing loans this year, it is anticipated that the overall new loan volume for the year will decline by 2%, amounting to 573 billion baht, while the outstanding loan balance is expected to be around 3.516 trillion baht, growing by 5.81%. The non-performing loan (NPL) rate in the second quarter of 2017 was at 3.06%, and the decreasing NPL rate will positively impact new loan issuance in the final quarter of this year.

        In the first half of 2017, Krungsri's new loan volume was 25 billion baht, with an outstanding loan balance of 204 billion baht. It is expected that by the end of this year, the outstanding loan balance will increase to 217 billion baht, while the NPL rate remains at 2.4%. Krungsri will focus on service strategies by applying a Japanese service style known as 'Omotenashi' and emphasizing services that genuinely meet the needs of buyers.

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