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Bangkok Condo – Political Unrest Has Scared Speculators

By on May 23, 2014 in Property News, Residential

While political unrest has reduced the demand for home loans, lenders note that those who do apply for mortgages are serious about actually living in their new new homes, and aren’t speculators. Some mortgage lenders last year increased their down-payment requirements, especially on second homes, to reduce the risk of speculation.

Thanachart Bank senior vice president Nathapol Luepromchai said there had been few mortgage applications so far this year for second or third homes, which he attributed to the political unrest drying up this market. “We have approved loans for some customers who might have high debt-to-income ratios, but their demand is real,” he said.

Kasikornbank executive vice president Chatchai Payuhanaveechai said the bank had not seen as many mortgage applications for second homes as last year because the circumstances did not support the purchase of a second or third residence.

The challenge for lenders is the lower number of new projects this year, which will spill over into 2015 because of fewer homes being delivered to buyers. Property developers this year have enough backlog to accommodate real demand for new homes because they launched many projects last year – the supply in Bangkok and nearby provinces at the end of last year surged to 143,000 units from 129,000 at the end of 2012.

Nathapol said that even though the property market had been affected by the political uncertainty, TBank granted 20 per cent more new-home mortgages in the first quarter year-on-year thanks to its exclusive programme with Pruksa Real Estate, allowing those who don’t have financial statements to access the bank’s housing loans. Under the programme, customers have to keep a deposit account at TBank for at least 12 months, and the savings provide the down payment. Several real-estate developers that have low-to-mid-priced residential projects have contacted the bank to participate in a similar programme, he said. Residential projects in the provinces are of high quality and are developed by local firms striving to defend their market from the arrival of big brands from Bangkok, he explained. The bank targets around half of its new home loans to come from upcountry markets.

Nora has been in the Corporate Communications arena for a number of years. Nora's role is to communicate all newsworthy items that are of a PR nature.

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