LTV rule relaxation sought
Three property associations on Monday submitted a flood impact report to the Bank of Thailand, hoping to win a relaxation on the planned implementation of the loan-to-value (LTV) mortgage rule.
According to Issara Boonyoung, president of Housing Business Association, Deputy Governor Krirk Vanikkul said that the issue would be discussed at the Financial Institutions Committee's board meeting on Nov 14.
Initially, Issara said, floods are expected to wipe out half of demand for low-rise residential units, starting in the fourth quarter of this year and to continue through next year. Floods also disrupt marketing events like the Thailand Exclusive Property Show 2011 which is postponed from Nov 4-13 to next year. Though some segments like condominiums look safe, the sentiments are not positive enough to host any promotion on possible unemployment increases.
From Jan 1, 2012, the central bank's LTV rule will take effect, putting a cap on financial institutions' loans to low-rise property buyers at 95 per cent. This policy was announced on fears of property bubble.
Issara said that the relaxation will allow some buyers to borrow more, to fix their properties.
The three associations - including Thai Condominium Association and Thai Real Estate Association - also submitted a similar request to the prime minister.
