Thailand's central bank plans to impose loan restrictions for certain residential property purchases to head off a housing bubble.

According to the Bank of Thailand deputy governor Krirk Vanikkul, commercial banks will have to increase risk weighting for apartments worth less than 10 million baht (US$335,345). It will be a "preemptive measure", he says, to encourage banks to be more cautious lenders. The measure comes at a time when condominium sales have jumped thanks to low borrowing costs and an improving economy. The new rule will take effect on January 1, 2011.

The central bank will impose similar restrictions on mortgage loans for the purchase of residences beginning January 1, 2012.

Source: Bloomberg