The central bank does not believe it needs to tighten regulations on bank lending to the property sector but acknowledges a rapid increase in condominium prices.
Deputy governor Krirk Vanikkul yesterday said the jump in condo prices over the past three months was confined to specific locations and does not warrant central bank action.
"We won't take any action if damages are to specific developers. We'll do so only if we observe the possibility of systemic risk," he said.
The Bank of Thailand could tighten property lending by increasing the capital requirement for bank loans.
In late 2009, it specified the loan risk weight for lending to residential units priced less than 10 million baht varied by the ratio of the loans, as it found competition led to reduced down payments.
That year, the central bank ruled condo mortgages could be no more than 90% of the unit price and single house mortgages no more than 95%.
Liquidity injections by Western central banks have renewed concerns about an influx of foreign capital, which could push up the baht and cause a rapid price increase in assets.
The central bank said condo prices rose by 7.6%, single houses 2.3% and townhouses 1.7% year-on-year in August.
Housing demand was strong in August, with mortgages growing by 9% from July.
As for the supply side, available units in Greater Bangkok increased by 8.5% from July. Total new housing supply increased by 14% month-on-month in August, while condo supply rose by 5%.
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- Writer: Parista Yuthamanop