Loan refusal remains an obstacle for the regime
Wichai Prahsertsit, chairman of Udon Thani-based property developer Green Metro Co, talks about the company’s prefab townhouses in Udon Thani.
Rejection of home loans remains a key issue despite the government’s low-interest mortgages as part of the 1 million-unit stimulus package having been in high demand in major northeastern provinces.
Wichai Prahsertsit, chairman of Udon Thani-based real estate developer Green Metro Co, said one of the company’s townhouse projects in the province with units priced below 1.2 million baht had than a third of customers get mortgage approval.
“The Million Unit Residential Program is good for Thai homebuyers because they can own a home at low interest rates with a longer payment period,” he said. “We sold 170 units under this program but were only able to transfer a third of that amount.”
He said the program can help those, especially early wholesalers, who earn 12,000 to 15,000 baht per month to secure a mortgage for a house priced at 1.2 million baht and less. .
This segment is very important in the large northeastern provinces with more than 100,000 inhabitants. They can comfortably go from renting an apartment at 3,500 baht per month to a mortgage that they can pay off at 5,000 baht per month.
“But a lot of them can’t get home loan approval or pay a monthly mortgage payment because they have other expenses,” Wichai said.
To avoid repeating the denial of a home loan like in the Udon Thani project, Green Metro has launched online booking for a new townhouse project in Khon Kaen.
Of a total of 108 units that have been fully booked, 86 have received mortgage approval.
According to the Real Estate Information Center (REIC), the number of unsold low-rise houses priced at 1.5 million baht and below, totaling 447 units, was only 4.7% of the total supply. of low-rise housing in Khon Kaen in the first half of 2021..
Vichai Viratkapan, acting director general of the center, said the absorption rate of low-rise homes priced at 1 to 1.5 million baht was second highest at 4 percent per month, after those at 10 million baht and above which amounted to 16.7%.
Green Metro also plans to launch another 400 to 500 low-rise houses in Khon Kaen, 300 to 400 in Udon Thani and 600 in Nakhon Ratchasima. Most will have units priced at 1.2 million baht or less.
“Townhouse development in the provinces tends to be more difficult as land costs have increased. The build quality was also out of control. As a result, we will switch to a prefabricated construction method to control costs and quality, ”Mr. Wichai said.