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Government Housing Bank, Thailand. Growth with Stability in Affordable Housing Markets: “ Primary Mortgage Markets Growth & Prospects”. Ballobh Kritayanavaj Senior Vice President G H Bank – Thailand Jan. 30, 2011. Housing Completion in Bangkok and Metropolitan Region.

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Government Housing Bank, Thailand

Growth with Stability in Affordable Housing Markets:

“Primary Mortgage Markets

Growth & Prospects”

Ballobh Kritayanavaj

Senior Vice President

G H Bank – Thailand

Jan. 30, 2011


Housing Completion in Bangkok and Metropolitan Region


Housing completions in Bangkok and Metropolitan Region by types


Newly - launched Housing Units - Bangkok and Vicinity


New Home Loans in Thailand


Market Share of New Home Loans


Home Loans Outstanding in Thailand


Market Shareof Home Loans Outstanding


GH Bank VS Commercial Banks

Sources : GH Bank and Bank of Thailand (BOT)as of Dec 2011

* Commercial Banks registered in the country


GH Bank VS Commercial Banks

Sources : GH Bank and Bank of Thailand (BOT)as of Dec 2011


Mortgage rates strategy

  • Interest rate 0% (3 – 36 months)

  • - GH Bank0% for 36 months, year 4 – 7 = MRR, year 8 onwards MRR -0.5

  • - Commercial banks (6) 0% for 3-10 months, year 1-3 = MRR minus, year 8 onwards MRR

  • 2. Fixed short term rate (1-3 years)

  • - Commercial banks (4)1 year = 2.5% - 5.25%

  • - Commercial banks (4)2 year = 3.75% - 5.50% after that MLR -0.25% to 1.75%

  • - Commercial banks (3)3 year=3.45% - 6.25%

  • 3. Special floating rate (1-3 years)

  • - GH Bankyear 1-2 = MRR-2%, year 3 = MRR-1% after that MRR-0.5%

  • -Commercial banks (2)1 year = MLR – 1.75% and MLR - 2.6%

  • -Commercial banks (5)2 years =MLR - 1.00% to 4.00%

  • - Commercial banks (7)3 years =MLR – 0.40% to 4%

  • 4. Hybrid rate

  • -Commercial banks(5)fixed year 1 = 1.25% - 2.75%

  • float year 2 = MLR – 1.00 to 2.00


GH Bank Leading Roles

  • Mortgage Market Leader in Thailand

    34 - 40% market share

  • Gov. instrument in real estate market revival and economic growth stimulation

    - Government assisted- mortgage programme for first-time

    homebuyers

    - Bann Eur-Arthorn (NHA), Bann Mankong CODI

  • Housing Finance Infrastructure

    • National Credit Bureau (established in 2004, currently with 75 institutional members and 30 million accounts)

    • Real Estate Information Center, www.reic.or.th (2004)

  • Housing Knowledge and Education Center

    • GH Bank Housing Journal - Thai (1995)

    • Asia Pacific Housing Journal - English (2007)

    • Homebuyer information center www.ghbhomecenter.com

    • Real estate professional associations(>16)


Deposit rate1.00 – 4.58%

Reference rate MRR = 7.25%

Mortgage rate MRR - ? % (up to selected program)


GH Bank Home Mortgage Lending

  • Maximum loan amounts: no limit(average loan size Bt500,000)

  • Loan - to - value ratios: 70 – 100%

  • Loan term

  • up to 20-30 years (Age of borrowers plus loan term must not exceed 70 years)

  • Mortgage Rates

  • 1. Floating rate = MRR

  • 2. Special floating rates = MRR minus

  • 3. Hybrid mortgage (fixed + floating rate)

  • Mortgage interest rate ceilings

  • GH Bank 19% / Commercial Banks 11.25% - 18%


GH Bank Home Mortgage Lending

  • Valuation fees: Bt1,700 – 2,800

  • Origination Fees: 0.01% if exceed Bt500,000

  • Loan analysis and approval: Credit scoring

  • Property transfers: 2%mortgage registration: 1%

  • Monthly payment calculation : MRR+1%

  • Loan repayment channels : Banks + pay pointse.g. 7-11, Post officeJayMart,Pay Point, Tesco Lotus, Advanced Info Service Plc

  • Mortgage amortization : declining principal balance

  • Prepayment penalties : First year at 3%, year 2-3 at 2.5%

  • Late charges : 60-day-past-due charges 13.5%

  • Mortgage related insurance : fire insurance(compulsory)

  • Mortgage life insurance(voluntary)


First-Time Home Buyer Mortgage Programme I

  • Total Programme Loan amount :Bt25 billion

  • First- time homebuyers : no homeownership record

  • Purpose : Buying New home, resale home or home construction

  • Loan limit : not more than Bt3 million

  • Loan period : not more than 30 Years

  • Loan interest rates - 1st – 2nd year = 0%

    - 3rd – 5th year, welfare customers = MRR - 0.5%

    ordinary customers = MRR (current = 7.25%)

    - 6th year, welfare customers = MRR – 1.00%

    ordinary customers = MRR – 0.50%

  • Fees : mortgage registration fee (1% Exempt), transaction fee (1% from 2%)

  • Program period : 9 May – 30 Dec. 2011


First-Time Home Buyer Mortgage Programme II

  • Total Programme Loan amount : Bt20 Billion

  • First- time homebuyers -no homeownership record

  • For : Buying New home, resale home or home construction

  • Loan limit : not more than Bt1 million

  • Loan period : not more than 30 Years

  • Loan interest rates

    1st – 3rd year = 0%

    4th Onwards = MRR-0.5% (Current MRR = 7.25%)

  • Refinance: not allowed before 7 years

  • Program period : 11 Oct. 2011 – 30 Sept. 2012


Special Five-Point Flood Loan-- Mitigation Programme

1. Waiving monthly loan payments for six monthly program and reducing interest payments to zero per cent during the same period,for home owner with damaged homes. For those with several damaged homes,an additional six months of payments will be waived.

2. Borrowers disabled or lost lives during floods will have interest payments reduced to 0.01 per cent per year for entire loan terms.

3. If borrowers’ home became uninhabitable because of flooding,their loans would be reduced to land-values only.

4. Any new or existing borrowers that had their homes damaged by floods could apply for special home-repair loans (not exceeding Bt 1 million) at two per cent interest for five years.

5. The Bank will provide loans not exceeding Bt 100,000 per person (no collateral needed) to renovate damaged home at four per cent fixed interest rate for five years.


  • Mortgage Market : Growth & Prospective

    • Government housing policy

    • MOF + BOT Regulations

    • Economic growth

    • Employment and income growth

    • Bank’s strategies and competitive advantages

    • Financial market

    • Housing market situation (RE cycles)


Housing Ladder

Extremely High (detached houses)Upper20 Million THB 167,300

8

Very High (detached houses)10 Million THB 83,700

7

High (detached houses / condominiums)5 Million THB 41,900

6

House Price Level

Monthly Payment (Baht)

Medium High (condominium / townhouses / detached houses)3 Million THB 25,100

5

Medium (condominiums / town Houses / detached houses)

2 Million THB 14,800

4

Medium Low (condominiums / cheap townhouses / duplexes / one-storey detached houses)1 Million THB 8,400

3

Low (duplexes / small condominiums)500,000 THB 4,200

2

Very Low(squatters / slums/ rental housing/ apartments)

1

Remark: Monthly payment calculation interest rate 7% ,Term 20 years, Loan to Value ratio 85%


Growth with Stability in Affordable Housing Market (THAILAND)

Ministry of Interior

Ministry of Social Development & Human Security

Ministry of Finance

Ministries

Land Department

Dept. Public Works andTown & Country Planning

Special Financial Institutions

Govt. Agencies

Bank of Thailand

National Housing Authority (NHA)Community Organizations Development Institute (CODI)

(Regulators, Financiers, Developers, Land registrations)

Com. Banks Financial CompanyOther Financial Institutions

GH BankGSB SMC

Community/ Property Managers

RE Brokers

Private Sector

Developers

Valuers

Financiers

Housing Finance Assoc.

Thai Condominium Assoc.Housing Business Assoc.Thai Real Estate Assoc.

Property Mangt.Assoc.

Thai Valuers Assoc.Valuers Assoc. of Thailand

Thai RE Brokers Assoc.

Professional Associations

Training & Education

Universities

Training Centers

CU - TURU - ABAC

AREA- TRES-Associations

REIC

GH Bank

Com. Banks

Others

Information

www.reic.or.th

Websites

www.ghbhomecenter.comJournals (Thai + Eng)

WebsitesMagazines (e.g. Home Buyer Guide etc.)

Ballobh K. 20 Jan 2012


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