* Existing loan guidelines to be replaced by rules
* Measures to help ‘prevent speculation’ - c.bank aide
* Non-performing mortgages at 3.4 pct at end of Q2 (Adds details, quotes)
By Kitiphong Thaichareon and Orathai Sriring
BANGKOK, Oct 4 (Reuters) - Thailand’s central bank, concerned about the number of property loans going bad, said on Thursday it will require buyers of homes worth more than 10 million baht ($306,465) and of second homes to make downpayments of at least 20 percent.
The move, to take effect in January, comes amid elevated household debt and rising bad mortgage loans. Intensifying competition among banks for mortgage business has led to looser lending for property purchases.
At present, a Bank of Thailand guideline on property loans says buyers of homes valued at more than 10 million baht should make downpayments of at least 20 percent, but this is not mandatory.
Wajeetip Pongpetch, an assistant governor, said that under new rules, the 20 percent minimum downpayment will be mandatory and the loan-to-value (LTV) ratio will be maximum 80 percent.
“The measures are aimed at preventing speculation and cutting back mortgage loans for no real residence,” she said.
For purchases of residents that are a second home, or more, there will also be a requirement for minimum downpayment of 20 percent.
At present, buyers of second homes costing less than 10 million baht only should make a downpayment of at least 5 percent for low-rise housing and at least 10 percent for a condominium.
Wajeetip said there are no bubbles in the Thai property sector.
However, the central bank is worried about increased vulnerability in the property sector, according to minutes of the central bank on Wednesday.
Speculation in the property market has pushed up home prices.
According to a Bank of Thailand index, condominium prices rose 5.6 percent in the first half of 2018 from a year earlier. In the second half of 2017, prices climbed just 0.6 percent from the year-earlier period.
Housing loans rose 6.2 percent in the end of the second quarter from a year earlier, while non-performing mortgages hit 3.39 percent of the total, the highest level since the end of the global financial crisis in 2009.
Wajeetip said the latest measures may also help reduce household debt, which stood at 12.3 trillion baht at the end of June, the equivalent of 77.5 percent of gross domestic product and among the highest in Asia.
Last year, the central bank tightened rules on credit cards and personal loans to battle the debt problem. ($1 = 32.63 baht) (Editing by Richard Borsuk)