Abstract
The Bank of Thailand has temporarily relaxed Loan-to-Value (LTV) regulations to support the real estate sector, allowing 100% LTV ratio for housing loans under specific conditions. The measure aims to ease financial conditions in the sluggish housing market but may have limited impact on boosting sales. The market recovery still faces challenges, with additional government measures proposed to support housing sales and credit access for middle- to lower-income buyers. These measures include reduced transfer and mortgage registration fees, tax incentives, and specialized housing loan programs.
Summary
The Bank of Thailand’s Temporary Relaxation of LTV Regulations
The Bank of Thailand has temporarily relaxed the Loan-to-Value (LTV) regulations to support the real estate sector. The revised measure allows a maximum LTV ratio of 100% for housing loans under certain conditions, aiming to boost housing sales between May 1, 2025, and June 30, 2026.
SCB EIC’s View on the Impact of the LTV Regulation Relaxation
SCB EIC views the temporary relaxation of the LTV regulation as part of broader efforts to ease financial conditions amidst a sluggish housing market. While it may provide short-term support, the positive impact on housing sales is expected to be limited, mainly benefiting property investors and individuals purchasing second homes.
Challenges in the Housing Market Recovery
The housing market continues to face pressure due to limited credit access for middle- to lower-income buyers. Additional government measures, such as reducing transfer and mortgage registration fees and considering developer-proposed initiatives, are crucial to provide more sustainable support to the housing market and improve credit access for all income groups.
