Mortgages as a percentage of GDP remain relatively low in Thailand, Mr Khan says.

Figures on new home starts and transactions speak volumes about consumer confidence, disposable income and the general financial health of the Thai family household.

So it comes as little surprise that strong economic growth has moved hand in hand with property sales, even to the point where some have begun to express worry about a possible bubble in the making, a repeat of the boom-and-bust cycles of the mid-1990s.

Khan Prachuabmoh plays down such concerns.

"We're still far away from a possible bubble. I think there remains plenty of room for growth," says the president of the Government Housing Bank.

The state-owned GHB is the country's largest home mortgage lender, with a loan portfolio of 352 billion baht at the end of June and around one-quarter of all outstanding home mortgages.

Mr Khan said the GHB was on track to lend 100 billion baht in new loans this year, the first since the 1997 economic crisis.

"If you look at the total loans outstanding as a percentage of gross domestic product, home mortgages stand at just 15%," he said.

The Government Housing Bank is on track to lend 100 billion baht in new loans this year, the highest since the 1997 economic crisis.

"In Malaysia, it's 20%, while in poorer countries such as India or Pakistan, it's just 4-5%. Developed countries such as the US or England however have ratios as high as 70%."

Economic growth, higher disposable incomes and more developed financial markets will eventually boost home ownership and mortgage figures.

While home lending has risen sharply over the past several years, thanks to historically low interest rates and an improved economy, considerable room for growth remains, Mr Khan said. The bubble in the mid-1990s reflected a distortion of supply and demand, where property speculation led to rampant borrowing and construction well beyond what was actually needed in the market.

"At the time, new applications for home construction was as high as 250,000 to 270,000 units per year, with an existing stock of 150,000 to 170,000," Mr Khan said.

"Compare that with today, where both figures stand below 50,000 units. Demand today is well ahead of the supply, so we're far away from any bubble."

From January to August, 36,615 new home registrations were made in Greater Bangkok, an increase of 36% from the same period last year. Analysts expect total registrations this year to reach 55,000 units, well below the peak of 140,301 recorded in 1995.

Another 13,760 units were promoted by developers in new developments the first half of the year, expected to reach 30,000 for the entire year.

In contrast, some 250,000 new units were planned and marketed by local developers in 1997, the year of the economic crash.

Only now are prices beginning to recover to their former levels. Property prices in Bangkok reached a peak in 1994-95 and a low in 1998-99, with townhouses and detached homes losing 10-35% in value and condos off by 30-50%.

While rising construction and material costs have led more established property developers to raise prices by 5-10% this year, prices overall have remained relatively steady over the first eight months of the year.

Mr Khan noted that at the very top end of the market, where unit prices stand at 10 million baht or higher, demand has already begun to slow.

At the lower- and middle-income segments however, demand remained steady, with loans to this market representing the bulk of new lending by the GHB over the past year. As of September, the GHB has lent 73 billion baht in new loans for the year to date, slightly above the 70 billion reported at the same time in 2003.

"The government's economic strategy started first with the property sector, since it's an industry that has a large multiplier effect and impacts the entire economy," Mr Khan said.

The government has launched a number of housing initiatives over the past several years, highlighted by the Ua-Arthorn low-income housing programme, aimed at building one million units within the next five years.

Mr Khan said the GHB was planning to launch a microfinancing programme with community development organisations to help urban slums, where community leaders would work with the bank to help set development targets and monitor investment and loan repayments.