cross country experiences thailand ballobh kritayanavaj senior vice president g h bank – thailand...
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“Cross Country Experiences” THAILAND
Ballobh KritayanavajSenior Vice PresidentG H Bank – Thailand
11 April, 2013
Housing : An Engine for Inclusive Growth
Population and GDP : Thailand and South Asia Countries
source : IMF, World Economic Outlook Database, October 2012
Country
Population GDP Size GDP per capita GDP Growth
MillionsU.S. dollars
Billions U.S. dollars %
2013E 2013E 2013E 2012E 2013E
India 1,239 2,117 1,709 4.9 6.0
Pakistan 183 237 1,296 3.7 3.3
Bangladesh 152 127 835 6.1 6.1
Thailand 65 413 6,364 6.4* 5.0*
Afghanistan 33 22 668 5.2 6.5
Sri Lanka 21 65 3,104 6.8 6.7
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GDP Growth and Housing Completions
in Bangkok and Metropolitan Region
2
Housing Ladders Prices of New Houses Offered for Sales in BMR Market 2012
by Private Housing Developers
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EFFICIENT PRIVATE HOUSING DEVELOPERS
Data : REIC Graphic : GH Bank
4
NHA’s Subsidized Low- Cost Housing Completions 2004 2( –012
Avg # 30,000 units/year
5
Home Loan Outstanding in Thailand
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Market Share of Home Loans Outstanding
Residential Mortgages in the Thai EconomyResidential Mortgages in the Thai Economy
Items 1990 2000 2010 2011 2012
Residential Mortgage
Outstanding (billion baht)138 689 1873 2029 2259
All Types of Loans(AL) 1979 4309 11802 12951 15346
GDP at current price 2184 4917 10104 10460 11363
RM : AL (%) 7 16 16 16 15
RM : GDP (%) 6 14 18 20 20
Source : Bank of Thailand
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Copyright -BallobhKritayanavaj
EFFICIENT HOUSING AND HOUSING FINANCE MARKET EFFICIENT HOUSING AND HOUSING FINANCE MARKET --THAILANDTHAILAND
FINANCIAL INSTITUTIONSFINANCIAL INSTITUTIONS
DEVELOPERS HOUSES
Infrastructure Development AuthoritiesInfrastructure Development Authorities
PolicyPolicy, , Planning and Control AuthoritiesPlanning and Control Authorities
• Developer loan (land and construction)
2. PRODUCTION PROCESS 3. MARKETING & SALES PROCESS
4. INDIVIDUAL MORTGAGE LENDING PROCESS
5. TRANSFER PROCESS* Land registration and Title transfer* Mortgage registration* Transaction taxation
6. HOUSING MANAGEMENT PROCESS
7. RESALE PROCESS
SITUATIONS •Population (rural –urban) * Social & cultural * Economic * Political & legal * Technology* Financial market
PRODUCTION INPUTS• Land - Construction materials* Labour- Contractor - Professionals* Capital - Information
•Government Housing Bank*Commercial banks* Government Savings Bank* Finance companies
* Savings –downpayment* Loan amount * Interest rates* Loan term (repayment period) * Lending conditions* Valuation – credit analysis* Payment collection * Foreclosure
• Residents * Developers* Community organization
*Location analysis *Land acquisition * Project planning & design * Infrastructure construction*Building construction
* Public sector* Private sector- Housing developer- Home builder-Self-Built
* Informal sector-Slum/ Squatter
* Price - Project size and units* Location* House type (SH –TH –CD)* House quality* Infrastructure quality * Community service and environment
* By Developer * By RE Agent - Realtor - Broker
•Owner -occupant * Investment for rent* Speculator for profit
* BMA/ Municipality* Electricity Authorities * Water Works Authorities* Telephone Services Authorities* Department of Public Works and Town&Country Planning* MRTA * BTS * Highway Authorities
• Housing policy and strategy (Government - NESDB –NHPC) * Financial policy(BOT –MOF)
* Urban planning and zoning(Dept. of Public Works and Town&Country Planning)
* Land subdivision control (Dept of Lands / BMA Dept of City Planning / Municipality etc
* Building construction control * Environment control * Consumer protection
•GOVERNMENT POLICY* LAWS* REGULATIONS
•SUPERVISION
* For sale by owner* Agent /Realtor/ Broker
BUYERS
11. . PROJECT LENDING PROCESSPROJECT LENDING PROCESS
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Key Elements for Efficient Housing Sector
Economic growth (Sustainable – no bubble)
- Job creation and employment stability
Housing provision for all Income levels (inclusive, new home & resale,
housing ladders, public & private, rental & ownership)
National housing policy - Homeownership strategies
Legislation & regulations (Urban Planning/Zoning, land subdivision control,
building control, condominium laws, environmental control, consumer protection etc.)
Land and infrastructure development (available - accessible)
Housing finance (available - accessible – affordable )
- Low Interest rates – high LTV - long term up to 30 years)
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Land & property registration and transfer system (accurate and fast)
Fiscal policy (Taxation, subsidy - supportive)
Investment promotion for housing developer (privilege through BOI)
Labour and building materials (available – good quality)
Construction technology (appropriate - innovative)
Education + Training & counseling programs
Statistical data & Information (Real Estate Information Center)
Housing professional development (associations – developers –home builders
financiers - valuers – brokers - sellers – property managers)
10 Key Elements for Efficient Housing Sector
INTEGRATED HOUSING AND HOUSING FINANCE MARKET (THAILAND)INTEGRATED HOUSING AND HOUSING FINANCE MARKET (THAILAND)
Ministry of FinanceMinistry of FinanceMinistry of Social Development & Human Security
Ministry of Social Development & Human SecurityGovt. MinistriesGovt. Ministries Ministry of InteriorMinistry of Interior
Govt. AgenciesGovt. Agencies
Bank of ThailandBank of ThailandLands DepartmentDept. Public Works andTown Planning
Lands DepartmentDept. Public Works andTown Planning
Special Financial Institutions
Special Financial Institutions
National Housing Authority (NHA)Community Organizations Development Institute (CODI)
National Housing Authority (NHA)Community Organizations Development Institute (CODI)(Regulators,
Financiers, Developers, Land registrations, Investment promoter)Private SectorPrivate Sector
Professional AssociationsProfessional Associations
Training & Education
Training & Education
Information & researchInformation & research
ValuersValuers RE BrokersRE Brokers Community/ Property Managers
Community/ Property Managers
Com. Banks Finance CompaniesOther Financial Institutions
Govt Housing BankGovt Savings Bank SMC
UniversitiesUniversities Training CentersTraining Centers
REICREIC GH BankGH Bank Universities Universities Private Medias and Research Co.Private Medias and Research Co.
www.reic.or.th
www.ghbhomecenter.comHousing Journals (Thai) 19 yrsAPHJ (Eng) 6 yrs
Websites
-Websites- Magazines (e.g. Home Buyer Guide etc.) - Radios
Ballobh K. 20 Jan 2012
- Real estate business
- Housing development
Thai Condominium Assoc.Housing Business Assoc.Thai Real Estate Assoc. Thai Home Builders Assoc.
Thai Valuers Assoc.Valuers Assoc. of Thailand
Thai RE Brokers Assoc.
Property Mangt. Assoc.
- TRETS- Associations
Housing Finance Assoc.
Mortgage Lenders
RU-ABAC CU - TU
- Housing developemt- Housing finance - Property Valuation- Brokerage business etc.
Developers and BuildersDevelopers and Builders
BOIBOI
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Govt’s policies to promote the housing sector & economy
• Housing market stimulation policy • Mortgage registration fee - Reducing 1% 0.01% (loan amount)
• Real estate transfer fee 2% 0.01% (appraised value)
• Specific business tax (SBT) 2% 0.01% (transaction price)
• First time homeownership policy - Promoting more affordable housing
GH Bank first home scheme Total project loan amount : Bt 20,000 million 0% interest rate (2- 3 years) LTV up to 100% Loan amount up to 1 million
• Homeownership taxation policy interest from home loan is deductible for income taxation (Bt50,000 Bt100,000)
• Low cost housing development policy - Board of Investment (BOI)
- Condominiums < 1 million
- Land & house < 1.2 million - Income tax exemption for 5-8 years