KGI Finds Home Loan Scheme Weak for Thai Property
Thailand's Home Each House Plus loan program, backed by the Government Housing Bank, offers low-interest loans to low- and middle-income borrowers but is unlikely to boost the property market, according to KG I Securities. The brokerage notes that similar measures over the past five years have failed to stimulate demand, with current buying power concentrated among high-income and luxury buyers. KG I maintains a neutral rating on real estate stocks, recommending AP and Sansiri as buys.
KG I Securities (Thailand) assesses the impact of the Home Each House Plus housing loan program, which has a budget of 50 billion baht and is supported by the Government Housing Bank, targeting low- and middle-income earners. The program offers two tiers: a relaxed income and cost-of-living criterion with a 2.8% annual interest rate for the first two years, and a standard income criterion with a 2.6% rate for the same period, with a maximum loan of 3 million baht per borrower and collateral, and a repayment period of up to 40 years. The Finance Ministry estimates the scheme will generate about 125 billion baht in economic circulation. However, KG I says it will not significantly stimulate the property market, as similar measures over the past five years have failed to boost demand, with low- and middle-income households still facing purchasing power and loan approval constraints, while current demand comes mainly from high-income buyers and the luxury segment, which enjoy strong financing support. KG I Securities maintains a neutral stance on real estate stocks, recommending a buy rating on AP (Thailand) PCL with a target price of 9.40 baht and on Sansiri PCL with a target price of 1.75 baht.
