NO RISE IN MORTGAGE RATES OVER REMAINDER OF THIS YEAR

       Home-loan rates would not rise at least for the rest of this year as banks could still able to source cheap funds, a banking chief said yesterday.
       "Banks may raise deposit rates to draw more funds but overall funding costs are still low, so it would not affect lending rates," Khan Prachuabmoh, president of the Government Housing Bank, the country's largest mortgage lender.
       While developers have more confidence in the real estate outlook for the next six months, house prices actually dropped last quarter for the second time in a row, he told a press conference.
       Banks are also expected to lend more to homebuyers this quarter after they were cautious in the first half of the year.
       GH Bank has targeted Bt100 billion in new loans and as of Tuesday, it was at Bt74 billion.
       Developers are more optimistic now after their confidence in the fourth quarter of last year hit the lowest point since the fourth quarter of 2007, he said.
       The Expectations Index rose to 69.9 in the third quarter from 62.2 in the previous quarter.
       Listed firms had higher confidence, as their expectations index was at 75.9 while non-listed firms were at 64, according to 150 firms surveyed by the Real Estate Information Centre (REIC).
       Looking six months ahead, the Expectation Index remains at 69.9.
       Respondents reported high confidence for generating a profit, increasing sales volume, starting new investments, employing more workers and launching projects. They, however, are concerned about the rising cost of doing business.
       New residential registrations in greater Bangkok in the first eight months of this year reached 54,029, increasing slightly by 2 per cent from the same period last year.
       Condominiums accounted for 49 per cent of registrations followed by singlefamily homes at 36 per cent, townhouses at 9 per cent, commercial buildings at 4 per cent, and duplexes at 2 per cent.
       Although interest rates are low, speculation was not a big concern.
       "Prices of condos have not yet increased sharply, in the same way that happened before the 1997 crisis. Developers and homebuyers have learned their lesson," he said.
       High fuel costs and the expansion of the mass transit system have led to a boom in vertical residences, he added.
       Samma Kitsin, director of the REIC, said the survey found that land and housing prices in Bangkok, Patum Thani, Nonthaburi and Samut Prakan had dropped further last quarter.
       Singlefamily homes in inner Bangkok have lost favour as their prices have continued to climb.
       Homebuyers have turned to condos, townhouses and singlefamily homes in the suburbs, resulting in a lower average price for all resiฌdential units, he said.
       The Housing Price Index (HPI) for singlefamily homes dropped by 6.2 per cent to 160.2 from the previous quarter and by 9 per cent year on year.
       The HPI for townhouses dropped 2.3 per cent on quarter and 3 per cent on year, while the land price index was down by 3 per cent on quarter and 1.3 per cent on year.
       Prices next year could go both up and down depending on the market segment. For the lower and middle-income groups, home prices would be about Bt1 million, Bt1.2 million or not more than Bt3 million.
       Low-cost housing promoted by the Board of Investment would to some extent cause other developers to cut their prices, he added.

       "Banks may raise deposit rates to draw more funds but overall fundign costs are still low, so it would not affect lending rates."