Home loan rejection remains a key problem despite the government's low-interest-rate mortgages under the stimulus scheme of 1 million units having been in high demand in major northeastern provinces.
Wichai Prahsertsit, president of Udon Thani-based housing developer Green Metro Co, said one of the company's townhouse projects in the province with units priced lower than 1.2 million baht had only one third of customers gaining mortgage loan approval.
"The 1 million unit residential scheme is good for Thai homebuyers as they can own a house at low interest rates with a longer period of payment," he said. "We sold 170 units under this scheme but could transfer only one third of this amount."
He said the scheme can help those, particularly early jobbers, who earn a salary of 12,000-15,000 baht a month get a mortgage loan for a house priced 1.2 million baht and lower.
This segment is very large in major northeastern provinces with more than 100,000 people. They can comfortably shift from renting an apartment room at 3,500 baht per month to a mortgage loan which they can pay at 5,000 baht per month.
"But many of them cannot get a home loan approval or pay for a monthly home loan instalment as they have other expenditure," said Mr Wichai.
To avoid repeating home loan rejection as seen in the Udon Thani project, Green Metro launched online booking for a new townhouse project in Khon Kaen.
Of the total 108 units which were fully booked, 86 received home loan approval.
According to the Real Estate Information Center (REIC), the number of unsold low-rise houses priced 1.5 million baht and lower totalling 447 units accounted for only 4.7% of total low-rise housing supply in Khon Kaen as of the first half of 2021.
Vichai Viratkapan, the centre's acting director-general, said the absorption rate for low-rise houses priced at 1-1.5 million baht was the second highest at 4% per month, following those priced 10 million baht and above which stood at 16.7%.
Green Metro also plans to launch another 400-500 low-rise houses in Khon Kaen, 300-400 in Udon Thani and 600 in Nakhon Ratchasima. Most will have units priced at 1.2 million baht or less.
"Development of townhouses in the provinces tends to face more difficulties as land costs have risen. Construction quality was also uncontrollable. As a result, we will shift to a precast construction method to control costs and quality," said Mr Wichai.