Property developer Siamese Asset Co is unconcerned about the central bank’s loan-to-value (LTV) limit on mortgage lending, as it already collects a down payment of 20% of the unit price.
It plans to launch two new condo projects worth a combined 10 billion baht in the next two months.
Managing director Kajonsit Singasansern said the new requirement for LTV ratio of 80% the Bank of Thailand asked financial institutions to comply with from Jan 1, 2019, will have no effect on the company’s existing or new customers.
“We have collected a down payment of 20% at our condo projects for many years, so we don’t need to be worried about this new rule,” he said. “It only hurts our competitors.”
There was one project, Blossom Condo @Fashion, where the company collected a down payment of 15% of unit price because the project was in the lower-priced segment, in which most buyers were first-time purchasers.
Last Thursday the central bank announced it would require home buyers to make a down payment of at least 20% of the home value for new mortgages worth at least 10 million baht, as well as for second homes.
“We will continue with our policy of 20% down payment at our new projects as most of them are high-priced, where buyers have strong purchasing power and can pay a high down payment,” Mr. Kajonsit said.
Next month Siamese Asset plans to launch a new luxury condo project, The Collection, worth 4.8 billion baht. It will be located on a 2.1-rai plot on Ratchadaphisek Road, opposite Benchakiti Park.
The project comprises 443 units sized between 33.8 and 135.35 square meters and priced at 6.2-45 million baht a unit, or 240,000 baht per sq m on average. It plans to offer a guaranteed yield of 5% for two years.
The project targets both real demand and investors, estimated to account for 60% and 40% of buyers, respectively, and aims for 70% presales on the launch date.
By year-end, Siamese Asset plans to launch a mid-priced condo worth 5 billion baht located on 2.5 rai near Ratchadaphisek subway station. It comprises three towers with 600 units.