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NPA property sales in 2010 remain steady

The Housing Finance Association expects non-performing asset (NPA) property sales to be the same as last year as commercial bank liquidity remains healthy, says president Kitti Patpongpibul.

In addition to strong liquidity, banks had high profits so they do not need to accelerate sales of their NPAs, he added. The association expects 2 billion baht in sales from next month’s NPA Grand Sale, the same amount as 2009.

As of April, NPAs for commercial banks declined slightly to 133 billion baht from 138 billion last year. Though sales were higher, new NPAs entered the system.

Non-performing loans at the end of March were 4.97%, a slight decline from the end of 2009, said Mr Kitti.

Chatchai Payuhanaveechai, the HFA’s secretary, said political problems and the European public-debt crisis had slowed domestic investment, ensuring ample liquidity.

He said a rise in interest rates was expected at the end of the third quarter or early in the fourth quarter as the inflation rate is now 3-4%.

A rise of one percentage point in the interest rate would result in a 7% higher average monthly home loan payment.

“We’re now in the beginning of a new cycle of increasing interest rates. For the next three years, there will be a total increase of 2-3%,” he said.

He said the housing market this year would grow by between 5% and 8.5% with sales of 74,500 to 76,500 units, while housing loans would expand by 10-12% as buyers took advantage of property tax incentives that expire this week.

This year the association plans to hold the NPA Grand Sale from July 9-11. Offers available will include discounts of up to 60%, interest at the minimum retail rate minus 3%, or 2.5% and a waiver of the transfer fee.

  • Published in Bangkok Post: 29/06/2010 at 12:00 AM
  • Newspaper section: Business


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