GSB, GH Bank to fund cheap house project

GSB, GH Bank to fund cheap house project

Plan to lend B4bn to Pracharath Thai

A Government Housing Bank sign at the bank's booth during Money Expo 2019. GH Bank and Government Savings Bank will help subsidise residential projects. (Photo by Patipat Janthong)
A Government Housing Bank sign at the bank's booth during Money Expo 2019. GH Bank and Government Savings Bank will help subsidise residential projects. (Photo by Patipat Janthong)

State-owned Government Savings Bank (GSB) and GH Bank will jointly extend pre- and post-financing worth 4 billion baht for five low-cost residential projects under the Pracharath Thai housing scheme.

The lending is offered to both developers and homebuyers at the five budget housing projects in Chon Buri, Prachuap Khiri Khan, Chiang Rai, Chiang Mai and Khon Kaen provinces, said Amnuay Preemonwong, director-general of the Treasury Department.

He said an average 98% of the combined 2,302 units at four low-cost residential projects have already been reserved, with the Chiang Mai project overbooked at 139%. Sales at the Khon Kaen project have yet to start.

The housing projects include duplex homes, shophouses and condos, depending on location, but utility space must be at least 28 square metres, with prices in the range of 35,000-700,000 baht each.

The five projects are located on state land and are leased for 30 years with a renewal of an additional 30 years.

Prachuap Khiri Khan has started construction, while the remaining four have yet to begin. Welfare smartcard holders top the list of priority homebuyers, and the unsold units will be offered to those earning up to 35,000 baht a month before allowing the general public to buy the leftover units.

The five projects are part of the first phase of the 1-million-unit, low-cost Pracharath Thai housing scheme, which was launched late last year to help low-income earners own their own home.

Suksiri Boonyasait, deputy director-general of the Treasury Department, said development of the budget housing scheme's second phase is expected to start in eight provinces, including Bangkok, Ayutthaya, Songkhla and Phangnga.

The low-cost home project in Bangkok will be developed on two rai of state land on Chua Phloeng Road, considered to be Bangkok's prime area, Mrs Suksiri said, adding that the locations and low prices are attributed to strong demand in the five projects.

The Treasury Department's requirement for developing 30% of the low-cost housing project in commercial areas and using income earned from leasing commercial areas to offset the low-priced units sold to low-income earners make the project viable, she said.

GSB president and chief executive Chatchai Payuhanaveechai said the bank will charge developers of the five low-cost projects 3% interest for each of the first three years and the minimum lending rate minus one percentage point for the remaining period.

The loan has a five-year term.

For mortgages, borrowers are subject to 2.75% interest for the first four years and the minimum retail rate (MRR) minus 0.75 percentage points thereafter for general customers and MRR minus one percentage point for those working at companies that are partners with the bank.

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