The Ministry of Finance will present to the Cabinet in the next week legislation that will support low to moderate income individuals by allowing the Government Housing Bank (GHB) to release 30-year loans with the first 2 years being interest free on homes that are priced at 3 million baht or less for first-time buyers. This policy is a sign of the federal government’s strategy to motivate people to purchase their own housing which it feels will help solve social issues. Due to the fact that the housing market at or listed below three million baht is a big market and the buyers are mainly middle class this represents a market share of about 70 % of consumers.
Realty entrepreneurs primarily concur with this policy because it helps customers in an era where living costs have enhanced and rising rate of interest are helping realty industries. Operators with pending sales waiting to move in the market each year deserve over 2 billion bahtThis loan program will definitely influence the bank’s financing since banks presently have 0 % interest loans available for an optimum of 6 months or one year only.
It is expected that in the second quarter private banks might lose some new customers due to the fact that of this program, so it is thought that they will initiate new projects to take on the GHB.In addition to paying 0 % interest for 2 years, potential clients will also have the ability to get an exemption from the 1 % home loan fee and 1 % transfer fee. This particular procedure, together with permitting the conversion of leases to purchases for real estate priced at not more than 1.5 million baht should take in the whole GHB budget plan for this task which is five billion baht.
From information supplied by the Thai Realty Assessment and Data Center it appears that realty jobs opened in the very first quarter of 2011 for houses priced from 500,000 baht approximately 3 million consist of approximately 21,347 units that deserve roughly 32,405 million baht. Consisted of in these quantities are condominiums that represent as much as 10,917 units worth 13,461 million baht, homes numbered at 2,013 units that are valued at 5,260 million baht, duplexes at 590 units valued at 1,178 million baht, townhouses at 7,548 units valued at 4,307 million, commercial building at 270 devices worth 524 million baht and land appropriation valued at 2 million baht.
Nevertheless, the government currently approximated that there are some customers using in advance and there are only 1.5 billion baht left from an overall of 2.5 billion baht which will be consumed in 2 weeks time. It reveals that this measure might not influence the release of devices on the market at all. Using a market stimulus procedure in time without a crisis may be unneeded and if crisis arise in the future it not will be helpful to use this procedure to alleviate the problem.The cabinet had actually authorized the 0 % interest rate for two years for newbie house lending programs with a limit of 2.5 billion to promote realty market.
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