thaivest_pages_navigation

Zero-interest loans a reality

The Government Housing Bank has announced plans to offer new home buyers an interest-free mortgage of up to THB1mn (US$32,082) for the first three years. The programme is aimed at low-income earners and can carry terms of up to 30 years.

The GHB said it will set aside up to THB20bn (US$641.6mn) for the programme, which is in addition to the government’s ongoing programme offering tax rebates of 10 per cent for purchases of homes up to THB5mn (US$160,395).

The programme is financed through government subsidies of THB800mn (US$25.6mn) per year and an agreement to allow the GHB to reduce its profit remittances to the state through 2014.

The GHB will accept applications for the interest-free loan from next Tuesday through September 30, 2012 and contracts must be signed with the GHB before the end of 2012. The loan programme will include detached homes and properties as well as second-hand homes seized by the GHB, which currently has around 10,000 homes for sale.

Experts say the programme will mainly benefit upcountry buyers as few homes in Bangkok and surrounding areas cost less than one million baht.

According to the Bangkok Post, developers who may benefit include listed company Pruksa Real Estate, as the majority of its units are priced at less than THB2mn (US$64,157). The company relies heavily on prefabrication techniques that can result in homes being built in two months.

Units priced under one million baht accounted for just 18 per cent of total sales in the first half, with a total value of just THB8bn (US$256.6mn).

“I think this stimulus package will help the low-income market get their first home,” Opas Sripayak, managing director of LPN Development, said yesterday. He added that the new policy is better than the government’s tax deduction scheme as it benefits the low-income market.

According to The Nation, a home buyer will save about THB60,000 (US$1,925) per year, or THB180,000 (US$5,777) throughout the loan agreement based on a 6 per cent interest loan.

LPN Development has customers who would benefit the zero-interest loan for about 5,000 units, worth THB5bn (US$160.5mn).

Srettha Thavisin, president of Sansiri, said both the policy tax deduction of 10 per cent for residences priced up to Bt5 million and the zero-interest for the first three years are good for home-buyers, as they can save on the cost of buying a residence. The measures also support people in gaining their first home.

“We believe that both first-home schemes will boost the property market and also make the country’s economic growth stable,” he said.

Source: Property Report

, , , , ,

No comments yet.

Leave a Reply