Thai Property Sector Tests Banks' Willingness Under New $1.5bn Housing Scheme

 

Ministers approve 50 billion baht credit line for homes under 3 million baht, but developers warn strict mortgage rejection rates could stall market recovery.

 

Thailand's property sector has greeted the government's latest THB 50 billion ($1.5bn) housing stimulus with cautious optimism, warning that its ultimate success hinges on whether commercial lenders ease increasingly stringent mortgage approval standards.

 

Approved by the Cabinet for low- to middle-income buyers, the "One House Per Person PLUS" scheme offers long-term, 40-year mortgages at subsidised interest rates for residential properties priced up to THB 3 million ($90,000).

 

Administered through the state-owned Government Housing Bank (GHB), the facility will run from 15 October 2026 until 30 December 2030, or until funds are exhausted.

 

Reporting for Thansettakij, Paranee Khotchaporn highlights that while developers welcome the intervention to help clear mounting unsold inventory, high loan rejection rates remain a major bottleneck.

 

 

High Rejection Rates Impede Market Absorption

Survey data from the Housing Business Association (HBA) underscores the scale of the challenge. During the first half of 2026, average mortgage rejection rates reached 44.9 per cent across all price tiers, surging to 48.1 per cent for homes priced below 3 million baht ($90,000).

 

Furthermore, Real Estate Information Center (REIC) figures indicate that residential developments in Greater Bangkok currently require an average of 67 months to absorb existing unsold stock.

 

"The scheme certainly improves opportunities to clear inventory," noted Soonthorn Sathaporn, president of the HBA. "However, the core issue today is not merely purchasing intent but whether buyers can actually pass credit screening and complete ownership transfers."

 

To broaden access, the 50 billion baht ($1.5bn) allocation employs a dual-tranche structure:

10 billion baht ($300m) for standard-income applicants at a 2.6 per cent fixed interest rate for two years. 

40 billion baht ($1.2bn) for applicants subject to relaxed income guidelines at a 2.8 per cent fixed rate for two years.

 

The 0.2 percentage-point differential functions as a risk-adjusted buffer, testing whether expanded lending criteria can safely boost approval rates without compromising loan quality.

 

 

 

Calls for Commercial Bank Alignment

Industry leaders advocate expanding the joint-lending framework beyond GHB to include commercial banks, provided operational results prove positive. However, analysts emphasise that broader economic recovery remains essential to restoring bank confidence.

 

Uthai Uthaisangsuk, president of Sansiri Public Company Limited, noted that while government stimulus always drives consumer interest, purchasing power must recover before lending volume rebounds.

 

"Thailand's primary issue is diminished consumer purchasing power," Uthai explained. "When banks observe reduced debt-servicing capabilities, applicant credit profiles deteriorate, leading to tighter risk assessments. The priority must be economic recovery to restore income stability and lending confidence."

 

 

Developer Mobilisation

Despite ongoing credit constraints, major developers are positioning inventory to leverage the scheme.

 

AssetWise Public Company Limited (ASW) has enrolled 25 condominium developments—encompassing 5,000 units priced between THB 1.39 million ($41,700) and THB 3 million ($90,000)—across Greater Bangkok and the Eastern Economic Corridor (EEC).

 

Industry figures suggest that move-in-ready homes in prime locations stand to benefit most, provided clear guidelines are established for both new builds and secondary market properties.