Bank of Thailand Reaffirms LTV Criteria Not an Obstacle to Home Loans
The Bank of Thailand emphasizes that the current housing loan regulations are still necessary, stating they do not hinder the real estate market and help prevent artificial demand risks in the future.
Ms. Nawara Dejsuwan, Assistant Governor of the Financial Institutions Policy Group at the Bank of Thailand (BOT), explained that the BOT has been continuously monitoring and assessing the real estate market situation since the implementation of the LTV measures in April 2019 and is ready to adjust the criteria to align with the circumstances.
So far, the LTV criteria have been relaxed twice: once for joint borrowers and again for first-time homebuyers purchasing properties priced below 10 million baht, who can borrow up to the full price of the home plus an additional 10% for decoration or repairs. For second homes, borrowers can access up to 90% financing, which aligns with the BOT's principle of promoting home ownership among Thais.
According to the BOT, housing loans in the second quarter of this year grew by 4.4%, higher than the previous quarter, despite the ongoing COVID-19 pandemic. Most of the increased loans were for first-time home purchases.
This reflects that the LTV measures are not an obstacle to homebuyers' access to loans, and financial institutions continue to issue new loans if borrowers have the ability to repay.
Additionally, the LTV measures have helped mitigate the impact of COVID-19 on the real estate sector and the overall economy by slowing down artificial demand and excess housing supply prior to the pandemic.
Given the high level of uncertainty and the unknown timeline for the end of COVID-19, the BOT will continue to closely monitor and assess the real estate market situation.
