thai government considers helping homebuyers with affordable loans
News Posted On: 04 May 2011
The Government Housing Bank in Thailand is considering offering 0% interest rate loans for the first two years, to allow people in middle and low income brackets to purchase property costing less than US$100,200.
It is thought that the government is putting aside the US$0.167 billion for the campaign, which was due to be launched at the beginning of this month. Sales of property costing less than US$100,000 currently accounts for around 40% to 45% of the market and is worth $8.35 billion a year.
The chief financial officer of Asian Property Development plc, Pumipat Sinacharoen feels that this will push the market forward at a time when it is only showing slight growth. According to statistics released by the Real Estate Information Centre, property sales in Bangkok were down 27% year-on-year during the first two months of 2011.
Interest rates in Thailand are also rising so this news is likely to be welcomed by developers. The director and chief business officer of Pruksa Real Estate plc, Prasert Taedullayasatit has said that the campaign will help improve the market for lower and middle income purchasers, by reducing their costs by around 6% to 7% during the first two years.
The number of new condos being launched this year has fallen by 46% during the first quarter, a big dent in a market that had been highly active in the previous six months. However many of the condos being sold during that time were aimed at the first-time buyer with small unit sizes and affordable prices. Land prices and construction costs have increased since then, and it has become more difficult for developers to keep prices reasonable, so this new government initiative should definitely help to boost the market.
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