Zero-interest mortgage will benefit low-income home-buyers

“I think this stimulus package will help the low-income market get their first home,” Opas Sripayak, managing director of LPN Development, said yesterday.
The Cabinet approved the Finance Ministry’s proposal for the Government Housing Bank to lend up to Bt1 million to low-income people for the purchase of a first home priced not over Bt1 million.
Interest payments are waived for up to three years. The bank will set aside Bt20 billion for the project.
However, residences priced not over Bt1 million represent only 5 per cent of the Bt9 billion market in Greater Bangkok, or about 18 per cent of the roughly 9,000 units entering the supply side each year.
Opas said this new policy is better than the first scheme that offers a tax deduction for residences priced up to Bt5 million as it benefits the low-income market.
Their costs would drop by about Bt60,000 a year or Bt180,000 throughout the scheme, based on a 6-per-cent interest rate.
The company has customers matching this package’s conditions for about 5,000 units worth Bt5 billion that will be ready to transfer this year and next year, he added.
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.
Both stimulus packages are a help for people to own a residence. This also drives the country’s economy and expands the tax rolls.
“We believe that both first-home schemes will boost the property market and also make the country’s economic growth stable,” he said.
Prasert Taedullayasatit, chief business officer of Pruksa Real Estate, said this package would support the low-income market.
“We believe that the market will go back to normal after customers postponed their decision last quarter to buy a residence because they wanted to wait and see the government’s stimulus package,” he said.
Issara Boonyoung, president of the Business Housing Association, said this policy gives both people in Bangkok and the provinces an opportunity to have their first home. The zero-rate package will cover 20,000 units or more.
“We think this is the final step in the first-home scheme to stimulate the market. It will help the property market return to normal after most home-buyers delayed their decision in the third quarter of this year,” he said.