Buyers looking to purchase new properties in Thailand are advised to apply for loans within this year if they are to avoid an interest rate hike which is expected to increase continuously in 2012.
According to Kasikorn Bank (KBank) First Senior Vice President Chatchai Payuhanaveechai, this year’s property loan growth rate is slowing down to 7.5-8.5%, after expanding 9.2% last year. This is primarily due to an increase in the base interest rates.
The vice president said he expected policy interest rates to increase continuously. He projected that it would be around 3.00-3.25% at the end of this year, up from 2.50%; and would reach 4.00% later on in order to curb the inflation rate expansion of 3.3% this year.
Following the rising interest rate, Chatchai suggested that new house buyers should seek loans this year before the cost of interest, and the loan as a whole, will be even more expensive next year.
The vice president admitted however that competition among commercial banks in housing loans remains fierce, prompting banks to continue offering zero-percent interest rate promotions to attract more home buyers.