FRIDAY, March 29, 2024
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Govt Housing Bank asks government to boost property market

Govt Housing Bank asks government to boost property market

Government Housing Bank (GHB) has asked the government to take action to boost the property market, as the second quarter market has signed to drop by up to 30 per cent due to the BOT’s loan-to-value measure that kicked in on April 1, the bank’s president Chatchai Sirilai said

The Bank of Thailand’s new mortgage rule reduced the amount of permitted loans to about 90 per cent of residential value, 80 per cent for a second home, and 70 per cent for a third home, effective on April 1, 2019.
The bank approved Bt9 billion in new loans in April, a 35-per cent drop from the same month of last year. From May 1-15, approved loans totalled Bt4.5 billion, another drop of about 35 per cent below the same period in 2018, said Chatchai.
The measure has impacted directly on the property sector, Chatchai said. His bank cannot meet its loan-approval target of Bt203 billion this year unless the government takes action to support the market or holds talks with the Bank of Thailand to relax the rule for the government’s bank, he said. 
“Commercial banks have other products that can reduce the impact from the loan-to-value rule, such as through providing personal loans together with mortgage loans. But we are the government’s bank and cannot to do like the commercial banks. As a result, our mortgage loans in April and for half of this month are lower than our target,” he said.
GHB has announced new mortgage loans totalling Bt57.54 billion from January till May 15, 2019. The bank also expects new mortgage loans will reach Bt100 billion in the first half of this year, close to its target. But it expects that the government will announce measures to boost the property market starting in the remainder of the second quarter of this year.
“If there are no new measures, our new loans may be lower than our early target,” Chatchai warned.

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