Will the New Bank of Thailand’s Regulations Affect Me?
The answer to this will depend on your personal situation since these new regulations focus on mortgage lending. However, any change in investor affordability can impact the market as a whole creating a knock on effect even to those not subject to these requirements; and in this case, it is likely that it will be in the favour of any foreigners looking to make a Thailand investment.
The Bank of Thailand has tightened lending criteria as of 1 April 2019. The aim is to help promote first time buyers by making it harder for investors who are looking to purchase their second or multiple property and also aid in reducing mortgage defaults. Hence, these restrictions only apply to those requiring a mortgage for their investment so have less influence on cash buyers.
To summarise, investors wishing to obtain a mortgage for a property purchase now face lower loan to value rates. The new restrictions depend entirely on the existing property already owned. Those who already have a mortgage in place that is less than three years old, will now only be able to get a mortgage of 80 percent of the total value of the property for any loan in excess of THB 10 million. However, this amount changes since anyone with a loan that is being repaid and has been in place for over three years, can borrow up to 90 percent. Investors who are looking to buy their third property or more property, face even tighter lending since they are only permitted to borrow up to 70 percent of the value of the property.
These curbs are naturally expected to affect Thailand’s domestic market who rely on loans for property purchases, particularly those who intend to grow a property portfolio with the help of multiple mortgages. For overseas investors who buy the property outright there is no change but these restraints are likely to reduce the number of domestic investors thus creating a window of opportunity that foreigners can take advantage of. Should the numbers of local investment property owners reduce, there will be more choice in available units to cherry pick, plus less domestically owned buy-to-let Bangkok condominiums which overseas investors can easily fill.
Should you wish to benefit from these changes and become a buy-to-let landlord in Bangkok, then why not consider an Ananda condominium which all benefit from being close to the city’s mass transit network. To find out more, please contact one of our Sales Representatives here