A reduction in the oversupply of condominiums and decrease in demand has reduced the Bank of Thailand’s (BOT) doubts over a bubble forming in the market. The effects of BOT’s decision to raise the loan to value ratio (LTV) at the start of 2011 are being monitored. Last year, central bank announced similar preventive measures, with LTV capped at 90 per cent for condo units priced under THB10 million.
BOT director, Songtum Pinto said the property market has started to give better signals, reflecting lower demand, with the number of credit approvals on residential units projected to drop from 9,067 to 5,793 in January. Delays in the launch of a number of projects also attributed towards the slow month. The end of January saw a 13.9 per cent rise year-on-year in commercial banks’ outstanding personal loans for property purchases, while outstanding loans for developers dropped 3.9 per cent.
The transfer of property in Bangkok and the surrounding area rose from 161,240 in 2009 to 178,128 units last year due to Thailand’s continued economic growth, high consumer confidence and an increase in residential unit construction and registration. Unit completion grew from 94,977 to 105,152 in 2010. (Bangkok Post)