Single-digit mortgage loan growth likely to continue

 Housing-loan providers achieved solid double-digit growth back in 2012, before growth slowed over the next two years, followed by expansion of just 9 per cent last year, he said.
 Further single-digit expansion is being experienced this year, resulting in the association forecasting growth in the region of 5-7 per cent for the full year, he said, adding that outstanding household mortgage lending currently stood at around Bt3.1 trillion.
 However, the association believes lending growth should be capable of reaching 7 per cent this year, due to measures launched by the government in the latter half, including the “Pracha Rath” housing project and the measures to help small and medium-sized enterprises.
 Moreover, to help encourage housing-loan activity in the second half, nine banks will be running special campaigns, including zero-interest promotions, at three upcoming major annual events – “Home Loan 2016”, “NPA & Resale Home 2016” and “Home Buyers’ Expo 2016” – which take place at the Queen Sirikit National Convention Centre on August 18-21.
 Bank of Ayudhya (Krungsri) will bring back a zero-interest promotion at the events, after opting not to run such campaigns for several years.
 Krungthai Bank will offer a zero interest rate for the first year to customers who purchase one of its non-performing housing assets during the four-day triple-event show.
 For the second year, customers will be charged interest at the minimum retail rate (MRR) minus 1.5 percentage points, and at MRR minus 2 percentage points for the third year until the end of the loan contract.
 The Government Housing Bank plans to offer an interest rate of 0.1 per cent, with more details of the campaign to be unveiled at the events.
 Bangkok Bank’s mortgage rate, meanwhile, is being cut by 1 percentage point from the level offered at the same events last year.
 During the upcoming show, the banks will provide a financial clinic to educate potential home-buyers in how to prepare themselves when seeking a bank mortgage, in light of the industry having witnessed a rising rejection rate during the first half of the year.
 According to Housing Finance Association secretary-general Alongkot Boonmasuk, the mortgage-application rejection rate in the banking sector climbed to 50 per cent during the first six months.
 Even though housing developers helped screen customers, the banks’ credit-scoring system showed that many applicants still lacked the ability to repay debt, he said.
 The financial clinic will, therefore, benefit potential home-buyers – and freelance workers and new graduates, in particular – by advising them on how to prepare their financial-status information ahead of seeking a housing loan, he explained.
 Kitti added that residential developers were now expected to resume the launches of new projects –especially those for the upper-income segment – over the remainder of the year, in light of the draft constitution winning public approval at Sunday’s referendum.