B25bn okayed for first-timehome loans

Housing loans of 25 billion baht for first-time homebuyers were approved by the cabinet yesterday as a pilot project to help lower- to middle-income earners.

The Government Housing Bank will offer the loans at zero interest for the first two years for loans below 3 million baht, with repayment terms of 30 years. Homebuyers with less than 1 million baht in annual income can borrow up to 1 million baht.

Housing Business Association president Issara Boonyoung said the amount was not much if distributed nationwide, but it was a good start.

“This measure should help people own a house, but there should be a requirement to focus the package on low-income earners,” he said.

He noted that previous property tax incentives covered a wider range of unit prices and did not really help lower- to middle-income earners tap low interest rates.

GH Bank’s average unit prices for approved loans to homebuyers mean there will be around 10,000 units eligible for the loans, though most of them are for sold units.

The government will pay between 450 million and 500 million baht in interest to GH Bank, or one-quarter of the interest burden of 3.75% per year.

Homebuyers can apply between May 8 and Dec 31, but it is believed loan requests will reach 25 billion baht within two weeks, as 10 billion baht worth of loans are already in the pipeline.

Vachara Kannikar, a deputy government spokesman, said the proposal covered single houses, townhouses and condominium units.

To prevent commercial banks from being harmed, the cabinet barred existing homeowners from applying for refinancing through the programme.

Srettha Thavisin, the president of Sansiri Plc, said the policy allowing homebuyers to pay only the principal would help stimulate the middle- to lower-end markets and push customers to make quicker decisions.

The company has around 1,050 units with average prices between 1.21 million and 3 million baht each that may benefit from the scheme.

 

 

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