BANGKOK, 15 April 2013 – Commercial banks have started to be more cautious with home mortgage by tightening loan standards and refusing to lend for the purchase of a third house and empty land.
Kasikorn Bank Executive Vice President Chatchai Payuhanaveechai said the bank’s housing loan rejection rate stood at 30%-35% during the past two months, increasing by 2%-3%. He explained that the bank was lending less to the customers since those earning below 30,000 baht a month were being faced with rising debt burden, which would decrease their ability to repay debt.
Nonetheless, the bank executive admitted that Kasikorn’s credit expansion was still focused on home loan. The bank has been lending mostly to first-time home buyers while setting stricter standards for second-time buyers. As for third-time buyers, their loan requests have been rejected as the bank considers a third house excessive and sees that it might be for property speculation. Loan requests for purchases of empty land have also been turned down.
