Banks Advised To Relieve Tight Loan Rules to Facilitate Market
Commercial banks should loosen their home-loan sanction circumstances together with income and employment necessities so as to help the property industry, advised Atip Bijanonda, president of the Thai Condominium Association.
Because of the worldwide economic slump, several banks in Thailand have constricted showing of mortgage applicants for fright of non-performing loans (NPLs), which is throbbing the real estate sector, he said.
“Home loans are essential as people still have to purchase apartments for living. With the banks being too cautious letting out loans, the financial cycle would be stopped," said Mr Atip, the deputy managing director of the listed developer Supalai Plc.
He said constricted limitations should be applied as a substitute on credit cards as many home purchasers with credit-card liability were discarded by the banks.
“The credit bureau should sensibly categorize consumers as loan requirements of a number of consumers could be discarded only for the reason of credit card liability of value as little as 5,000 baht,” he said. Nearly 20% of home loan applications are abandoned at present.
Mr Atip also said interest rates should be reduced by a minimum of 50 basis point in 2008 to motivate the property market.
He said the market in 2009 would be affected by concentrated buying power as people turn out to be more unconfident about their financial standing.
On the other hand, Mr Atip uttered no apprehensions over the condominium market position, saying that prices differ and can hold up purchasers at all income levels.
"Prices of condos in 2008 should be unwavering due partially to lower construction expenditures. Although there could be certain price amendment depending on the project locality," Mr Atip said.
Manop Bongsadadt, a lecturer at Chulalongkorn University's Faculty of Architecture, said the Bank of Thailand should release the non-performing loan hold back standard to relieve the credit crisis.
He said banks should categorize borrowers into three groups based on their credit class as low, medium and high-risk.
Developers should help undertaking loans of consumers with medium credit risk at the same time as borrowers with poor credit history or those with NPLs should be tenants instead of purchasers, he said.
Because of the worldwide economic slump, several banks in Thailand have constricted showing of mortgage applicants for fright of non-performing loans (NPLs), which is throbbing the real estate sector, he said.
“Home loans are essential as people still have to purchase apartments for living. With the banks being too cautious letting out loans, the financial cycle would be stopped," said Mr Atip, the deputy managing director of the listed developer Supalai Plc.
He said constricted limitations should be applied as a substitute on credit cards as many home purchasers with credit-card liability were discarded by the banks.
“The credit bureau should sensibly categorize consumers as loan requirements of a number of consumers could be discarded only for the reason of credit card liability of value as little as 5,000 baht,” he said. Nearly 20% of home loan applications are abandoned at present.
Mr Atip also said interest rates should be reduced by a minimum of 50 basis point in 2008 to motivate the property market.
He said the market in 2009 would be affected by concentrated buying power as people turn out to be more unconfident about their financial standing.
On the other hand, Mr Atip uttered no apprehensions over the condominium market position, saying that prices differ and can hold up purchasers at all income levels.
"Prices of condos in 2008 should be unwavering due partially to lower construction expenditures. Although there could be certain price amendment depending on the project locality," Mr Atip said.
Manop Bongsadadt, a lecturer at Chulalongkorn University's Faculty of Architecture, said the Bank of Thailand should release the non-performing loan hold back standard to relieve the credit crisis.
He said banks should categorize borrowers into three groups based on their credit class as low, medium and high-risk.
Developers should help undertaking loans of consumers with medium credit risk at the same time as borrowers with poor credit history or those with NPLs should be tenants instead of purchasers, he said.
Labels: home loan sanction, property market, Real estate sector, Thai condominium association
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