Kasikorn Research Center (KResearch) forecasts the country's outstanding mortgages will set a new record of 21-22% of Thailand's gross domestic product (GDP) over the next two years, a trend that could heighten pressure on rising household debt.
Overall housing loans stand at 19.9% of GDP now, up from 16.8% during the 1997 financial crisis. The robust loan growth is attributed to several factors _ rising purchasing power, easier accessibility to funding sources, mass transit system and real estate developments, and low interest rates, said managing director Charl Kengchon.
"With a lot of residential projects in the pipeline over the next two years, it could increase the mortgage-to-GDP ratio by 0.5 to one percentage point per year. Even though a property bubble isn't a concern now, rising household debt to GDP is worrisome," said Mr Charl.
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