Housing loan growth is expected to pick up from June as the cycle of new mortgage demand begins after many homebuyers rushed to secure loans before the central bank's tighter rules took effect in April, says a senior official at Bank of Ayudhya (BAY).
Slow housing loan growth is expected this quarter after the tighter loan-to-value (LTV) rules came into force, said Nathapol Luepromchai, executive vice-president and head of the mortgage division for BAY.
Based on the estimated mortgage demand rebound, he expects BAY's home loan target of low double-digit growth this year to be reachable.
BAY, the country's fifth-largest lender by assets, expanded its mortgages outstanding to 256 billion baht at the end of March, rising 2.2% from the end of last year.
Wirawat Panthawangkun, senior executive vice-president of Kasikornbank (KBank), said a housing loan deceleration is expected this quarter after people rushed to tap home loans to avoid the Bank of Thailand's tighter mortgage requirements.
The new mortgage rules call for a minimum down payment of 30% for the third and subsequent mortgage. They also require homebuyers to pay a 10-20% down payment for the second home loan, depending on how long a borrower has made payments on the first mortgage.
Given that the new regulations will dampen home demand, KBank has shifted its business strategy to focus on mortgage refinancing products to boost loan growth this year.
"Banks will pay more attention to the mortgage refinancing market," Mr Wirawat said. "To cater to growing competition in home refinancing products, the bank plans to launch marketing campaigns to attract borrowers."
KBank, the country's second-largest lender by assets, aims for more than 10% growth in new housing loans this year.
The bank managed to expand new home loan growth during the three months through March to 4% from the end of last year, propelled by home transfer acceleration before the new mortgage requirements were enforced.
But the bank set a marginal targeted increase for housing loans outstanding at 3.7% to 280 billion baht this year.
KBank managed to keep a lid on non-performing housing loans at 3.7% in the first quarter this year, a steady level from the end of last year.