Phase two of low-cost house scheme in sight


Chatchai Sirilai, president of state-owned GH Bank.
Chatchai Sirilai, president of state-owned GH Bank.

The government is set to roll out the second phase of the One Million Houses low-cost housing scheme worth 30-50 billion baht with a fixed rate of 2% for 10 years to help low-income earners buy a home and stimulate the domestic property sector.

Chatchai Sirilai, president of state-owned GH Bank, said the second phase is scheduled to be proposed to the bank’s board of directors for approval sometime in April.

This phase offers a lower interest rate than the first phase and raises the prices of the housing units to a ceiling of 1.2 million baht, up from 1 million in the first phase.

The first phase carries an average interest rate of 3% a year for the first 3-5 years and has already approved 35 billion baht worth of mortgages for applicants.

Some 15 billion baht is left and could be moved to the second phase, he said.

With a lower interest rate burden, the instalment payment for approved applicants should cost no more than 4,000 baht a month.

According to Mr Chatchai, despite the pandemic and the Bank of Thailand’s tight measures to limit loan extensions for second homes, housing demand from low- and middle-income earners still exists as reflected by the bank’s housing loan approval for three years.

In 2018, the bank approved 210 billion baht worth of housing loans, outstripping the target of 180 billion, with figures rising to 217 billion from a 203-billion target in 2019, and 255 billion from a 217-billion target in 2020.

From the beginning of this year to March 29, the bank has approved 43 billion baht in mortgages, which is a healthy expansion from the same period last year, he said.

“Such figures show that even with a crisis there is opportunity, especially for homebuyers that have real demand or even for investment purposes,” said Mr Chatchai.

He attributed the robust growth of the property market to low interest rates, reduced house prices and the government’s property tax incentives.

Mr Chatchai said overall domestic lending rates are expected to remain low, aiding people wanting to buy their own houses.

“Over the last 10 years, I’ve never seen such low lending rates — below 3% for years now. It used to be 12-13% in the past,” he said.

“But the low-interest rate structure also sounds much like a time bomb. Whether buyers can continue their instalment payments once rates pick up is a vital issue, forcing them to be cautious.”

GH Bank targets providing new loans worth 216 billion baht this year, up from last year’s target of 210 billion.



Source link

Related Articles

Leave a Reply

Stay Connected

120FansLike
998FollowersFollow
150FollowersFollow
- Advertisement -

Latest Articles

- Advertisement -