The Competitive Structure of the Housing Loan Market of Thai Commercial Banks

Abstract

The objectives were 1) to study the market structure and level of market concentration in the housing loan market of Thai commercial banks and 2) to study the characteristics of price and non-price competition in the housing loan market of Thai commercial banks. This research employed a quantitative research approach using secondary data from financial reports and outstanding residential housing loan data of 10 Thai commercial banks during the period 2019–2025. Data were obtained on outstanding residential housing loans, market shares, housing loan interest rates, and housing loan product information. Data were analyzed using market share analysis, the Concentration Ratio (CR), the Herfindahl–Hirschman Index (HHI), the Horvath Index or Comprehensive Concentration Index (CCI), as well as price and non-price competition analysis. The results showed that 1) outstanding housing loans among the ten commercial banks studied were concentrated in large commercial banks, which accounted for a substantial proportion of the total outstanding housing loans within the group. The average four-firm concentration ratio (CR4) was 0.69, indicating that the four largest commercial banks accounted for a substantial share of outstanding housing loans within the group studied. The average values of HHI and CCI were 0.16 and 0.42, respectively, indicating a moderate level of concentration within the group. HHI and CCI declined slightly, suggesting a modest reduction in market concentration. 2) Price and non-price competition among the selected commercial banks was reflected in differences in housing loan interest rates and loan service conditions. Price competition was reflected in differences in housing loan interest rates among the banks, while non-price competition was reflected in loan conditions, including maximum loan tenure, borrower eligibility requirements, the number of permitted co-borrowers, and branch network coverage.