Kbank expects low growth in mortgages next year

“Growth in the mortgage market will return in the second half, which we project at only 6 per cent, the lowest expansion in 10 years,” Chartchai Payuhanaveechai, first senior vice president of KBank, said yesterday.
By the second half of the year, a downward trend in interest rates is also likely to persuade home-buyers to act, he said.
The mortgage industry this year is expected to be up by 7-7.5 per cent, short of the target of 8-8.5 per cent.
KBank will start launching marketing campaigns including a zero-interest promotion in the second quarter in a bid to drive home loans up by Bt50 billion, or 8 per cent.
This year KBank’s home loans rose by 13 per cent, or Bt55 billion, bringing its outstanding loans to Bt188 billion.
Developers are not aggressively launching housing projects because they have to be more cautious about cash flow, Chartchai said.
“Home-buyers who paid a down payment before might cancel their purchase because they aren’t confident in the flood situation, and some buyers have delayed home transfers, which might have an impact on the cash flows of developers,” he said.
Developers are expected to focus on condominiums, especially in central locations such as Rama IV, Lumpini and Rama IX, and also in the suburbs such as Srinakarin, Bang Na and Bearing, because the floods did not affect those areas.
KBank has 69,000 flood-affected home-loan customers, of whom 3,000 have asked for financial relief.
When the flood is finally finished, the bank expects about 7,500 customers with outstanding loans of Bt8.5 billion to have sought financial assistance.
About 1,500 customers are expected to ask for Bt300 million in new loans to repair their residences. Loans for repairs will not be able to spur the home-loan business much because home-owners don’t want to increase their debt loads, Chartchai said.