Thai Property Stocks Rally As Central Bank Considers LTV Adjustments

On February 19, 2025, Thai property stocks experienced a significant surge following indications from the Bank of Thailand (BOT) regarding potential changes to the loan-to-value (LTV) ratio. This move is expected to invigorate the real estate market, particularly benefiting developers with substantial unsold inventory.

Key Takeaways

• Thai property stocks saw notable increases, with major companies like Sansiri and AP leading the charge.
• The Bank of Thailand is considering relaxing LTV rules to stimulate the property sector amid weak demand.
• Analysts predict a 10-12% rise in property transfers among mid to high-income buyers if LTV adjustments are implemented.

Surge In Property Stocks

The Thai stock market closed up 4.43 points on the morning of February 19, buoyed by strong buying interest in property stocks. Notable gains were recorded by:

• Sansiri Public Company Limited (SET: SIRI): +3.07% to THB 1.68
• AP (Thailand) Public Company Limited (SET: AP): +6.83% to THB 8.60
• Origin Property Public Company Limited (SET: ORI): +5.84% to THB 3.26
• Ananda Development Public Company Limited (SET: ANAN): +4.76% to THB 0.44
• Supalai Public Company Limited (SET: SPALI): +4.43% to THB 16.50
• Land and Houses Public Company Limited (SET: LH): +3.08% to THB 4.68

This rally reflects growing optimism among investors as they anticipate a more favourable lending environment.

Potential LTV Adjustments

The BOT is contemplating easing the LTV ratio, which currently allows for loans covering 90% to 100% of a property’s value for first-time buyers. This potential relaxation aims to stimulate the property market, which has been struggling with weak demand and rising bad loans.

Finance Minister Pichai Chunhavajira has emphasised the urgent need for support in the property sector, highlighting the challenges faced by developers due to tight lending conditions.

Expected Market Impact

Analysts from DAOL Securities and CGS International Securities have projected that easing the LTV ratio could lead to:

• A 10-12% increase in property transfers among mid to high-income homebuyers.
• Enhanced sales for developers with significant ready-to-move-in inventory, particularly in the mid to high-end market segments.
• Major beneficiaries of this adjustment are expected to include companies like SIRI, SPALI, AP, LH, ORI, PSH, and ANAN.

Conclusion

The anticipated changes to the LTV ratio by the Bank of Thailand have sparked a positive response in the Thai property market, with stocks rallying as investors position themselves for potential growth. If implemented, these measures could significantly boost property transactions and alleviate some of the pressures faced by developers in the current economic climate.

Sources

• Thai Property Stocks Surge as Potential Ease on Loan-to-Value Ratio Boosts Sentiment – KAOHOON INTERNATIONAL, kaohoon international.
• Thai stocks in the morning closed up 4.43 points, receiving buying power from DELTA shares and the real estate group rebounded, waiting for the Bank of Thailand to relax LTV – Money & Banking Magazine, วารสารการเงินธนาคาร.
• Thailand’s central bank considers measures to support property sector, ET RealEstate, ET Realty.

Gaël Ovide-Etienne

Gaël oversees all marketing efforts for Ocean Worldwide. He manages marketing campaigns to connect with prospective buyers, conducts research and market analysis, and leverages AI to enhance all aspects of the business. This approach ensures better and faster results for our buyers and sellers.

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