Mr. Opas Sripak, Chief Executive Officer and Managing Director of L.P.N. Development Public Company Limited (LPN) commented on the recent announcement by the Bank of Thailand (BOT) regarding temporary relaxation measures for housing loan regulations and related loans (LTV measures), allowing a loan-to-value (LTV) ratio of 100% (full value of collateral) for housing loans (including other loans secured by housing) for properties valued below 10 million baht starting from the second loan agreement onwards, and for properties valued at 10 million baht and above from the first loan agreement onwards, for contracts signed between October 20, 2021, and December 31, 2022. He stated that these measures could enhance purchasing power for those looking to buy homes, compared to the previous requirement where buyers of a second home (second contract) had to make a minimum down payment of 10% if they had been repaying the first contract for two years or more. If the repayment period was less than two years, a 20% down payment was required, and for the third home and beyond (third contract onwards), a minimum down payment of 30% was necessary.


Mr. Opas Sripak, Chief Executive Officer and Managing Director of L.P.N. Development Public Company Limited (LPN)

“The relaxation measures will increase buyers' purchasing power. Instead of needing a lump sum to cover a 10-30% down payment, buyers no longer need to have that upfront cash, allowing those who can afford monthly payments but lack a lump sum to become homeowners. The segment that will benefit from these relaxation measures includes ready-to-transfer residential properties, which currently total about 750 billion baht, comprising approximately 300 billion baht in condominiums and about 450 billion baht in horizontal properties. LPN itself has ready-to-transfer products worth about 8 billion baht that are likely to benefit from this measure,” Mr. Opas stated.

However, in addition to the relaxation of LTV, Mr. Opas mentioned that an important measure to stimulate the real estate sector is the easing of strict credit assessment criteria by financial institutions, which is currently a significant issue for home buyers. Currently, the loan rejection rate stands at about 40-50%. If financial institutions relax their assessment criteria or if the government considers creating tools to assist financial institutions in granting loans, such as guaranteeing housing loans for home buyers to reduce risks for financial institutions—similar to the Small and Medium Enterprise Development Bank of Thailand (SME Bank) that guarantees loans for small and medium enterprises—this would make it easier for home buyers to access loans. If the government establishes an agency to guarantee loans for home buyers, it would facilitate their ability to secure financing for purchasing homes, thereby stimulating the purchasing power in the real estate sector and driving economic growth further.