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Thailand Property – Home Loan Rejection Stays High

By on Jan 26, 2015 in Property News

Unfortunately for the Thailand property market the high rate of rejected applications has continued into this year, as the banks maintain their stricter lending policy. Pruksa Real Estate’s condominium group managing director, Prasert Taedullayasatit, who is also president of the Thai Condominium Association, acknowledged that the rejection rate in the overall residential market was as high as 30 per cent last year. This is up from an average of 25 per cent in 2013, after the banks began to investigate all aspects of a customer’s official debt, such as hire-purchase loans and what is owed on credit cards.

Most commercial banks are concerned about people’s purchasing power to pay back a loan and have toughened their lending rules, especially among those who cannot show a regular monthly income, such as freelancers.

To help solve the problem of house-purchase finance for developers’ customers disqualified by tightened bank rules, the Secondary Mortgage Corp would like to see the companies setting up their own mortgage companies for customers. SMC president Pornnipa Hachaiya-phum said the state enterprise had proposed to the Finance Ministry that the Act governing the SMC be amended to allow it to get into mortgage insurance, which would bolster the confidence of commercial banks to approve home loans. The proposed amendments would also pave the way for property firms to establish mortgage companies to offer loans to their customers, with the lending backed by the SMC, she said.

Such a company would originate mortgages for potential buyers and seek funding from a client financial institution, which would provide the capital for the home loan itself, she added.

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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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