SETTING THE CONTEXT: THAILAND
MORE THAN SHELTER:
HOUSING AS AN INSTRUMENT OF ECONOMIC AND SOCIAL DEVELOPMENT
A Harvard Joint Center for Housing Studies International Housing Conference
Supported by the Rockefeller Foundation
May 9–14, 2005
Bellagio Study and Conference Center
Bellagio (Como), Italy
ABSTRACT
The Thai economy and its real estate markets experienced several boom and bust cycles during
the past several decades.
The current Thai government views the real estate sector as a major driver of economic stability
and growth. During the past four years, it has enacted numerous new policies to stimulate the
economy and at the same time address the housing requirements of the less privileged.
This paper will discuss Thai housing and the housing finance market's development, including
government and private sector roles. It will also present case studies of successful policy-driven
housing and housing finance programs that played a significant part in helping Thailand's
economy recover from the 1997 economic crisis and which are expected to be key drivers of
sustainable future economic development.
HISTORICAL CONTEXT
Housing Development
Housing has been major policy issue for every Thai government in the past three decades
because of population growth and rapid urbanization.
Thailand's population, which was 53.9 million in 1987, is now more than 65 million. Urban
residents now total more than 20 million people or about 30 percent of the population.
Rapid population growth and continuous urbanization have created numerous demands for
housing over a wide range of income levels. Upper-middle and higher income-level housing
needs are, however, currently well-serviced by the private sector. In 2004, private sector
developers developed 66.7 percent of Thai housing. (Housing Units Launched – See Appendix Figure 1)
Setting the Context: Thailand
1
Despite their housing-market dominance, private developers have largely avoided providing
lower-income and lower-middle-income housing. In large urban areas such as Bangkok, various
governments have implemented a wide range of policies to address the housing needs in urban
slum and squatters' areas, as well as adequate housing for laborers who have migrated to urbanbased manufacturing and service industries.
In addition, policy makers also must address the housing needs of a large informal sector that is
still a significant part of the Thai economy. (Housing Units Launched - See Figure 1)
The most recent published statistics indicate that in Bangkok alone more than 243,000
households lived in slums and squatters settlements, while another 250,000 households lived in
similar circumstances in other parts of the country. (National Housing Authority)
Currently, public and private organizations are cooperating to execute
government mandated housing policies.
Government and Private Sector Participation
Prior to 1960, Thailand’s few private developers produced homes for middle and upper-income
purchasers. The Thai government itself had been building homes primarily for government
employees since the 1940s through the Public Welfare Department.
The Government Housing Bank, established in 1953, acted both as a developer and as a housing
financing institution at the outset but relinquished its housing development role to the National
Housing Authority (NHA) when this was established in 1973.
The NHA was established to provide housing and financial assistance to low and middle-income
people. It was the government's catalyst to the development of rental accommodations and
affordable homes that could be purchased by low and middle-income citizens. It was also
involved in upgrading slum and squatter housing environments.
2
Setting the Context: Thailand
During the past three decades, the NHA has continually been designated the government's focal
point to provide better housing opportunities for low and lower-middle income purchasers.
Today, many of its efforts are based on joint private and public developments.
In 2004, the Thai housing market was relatively buoyant for middle and upper-middle incomelevel homes, with housing completions totalling about 56,000 units in greater Bangkok area
alone. The market for this sector is expected to continue expanding with an economy that is still
growing at about six percent per annum.
Currently, the Thai government has initiated several joint private and public programs to address
the needs of the urban poor and lower-income households. A brief synopses of two of these
programs is shown below:
1. Baan Eur-Artorn Low-Cost Housing Program
•
Low-cost housing development to enhance economic growth
•
Target - 600,000 homes between 2003 and 2007
•
NHA to execute project
•
Homes for lower-income people, including civil servants and government
enterprise employees.
•
Selling price to purchaser Bt390,000 per home ($US9,750)
•
Government subsidy Bt80,000 ($US2,000) per home.
•
Government Housing Bank to provide low-interest loans to buyers - limited NHA
guarantees
•
Slow Progress - difficulty delivering final product within designated costs
2. Baan Mankong - National Slum Upgrading Program
•
Urban Poor Communities in Thailand - 2000 survey - 1.14 million households, 5.13
million people
•
Squatters on public, private or temple lands
•
Program to create secure tenure and provide basic infrastructure and improve housing
in these settlements as a basic right on a nationwide scale
Setting the Context: Thailand
3
•
Alternative to delivering new housing units by delivering comprehensive long-term
solutions
•
Linking development of secure housing with the larger and more comprehensive
process of community development, encompassing economics, environment and
public health
•
Implementation and execution by community people and community networks with local
development organization support (See Appendix for December 2004 project update)
HOUSING FINANCE OVERVIEW – THAILAND
In 1953, the Thai government established the Government Housing Bank (GHB) with the special
objective to provide housing finance. During the first 20 years, the GHB acted both as a housing
finance institution as well as real estate developer. It's housing development role was supplanted
by the National Housing Authority's creation in 1973. (for a more detailed description of he
GHB go to the English section of www.reic.or.th)
Although the Government Housing Bank has a 38 percent market share and is the largest single
housing mortgage provider in Thailand, the 12 commercial banks, with their large deposit bases,
together have a more than 50 percent market share. (See Table 1)
4
Setting the Context: Thailand
Table 1 : Key Features of Financial Institutions in Thailand (as of Sep 2004)
Financial
Institutions
Total
Total
Home
Home loans
Operatio
Credits
Loans
to Total
n began Total Assets * Deposits
in
(Million Baht) (Million Baht) (Million Baht) (Million Baht) Credits (%)
Commercial
banks
1888
7,728,481
5,710,833
5,072,716
516,456
10.18
Government
Housing Bank
1953
657,342
560,592
392,459
374,858
95.52
Government
Saving Bank
1949
469,200
284,182
314,375
94,803
30.16
Finance
companies
1969
396,116
259,780
266,394
5,857
2.20
Life insurance
companies *
1929
290,049**
386,270
44,417
Na
Na
Credit Foncier
companies
1969
2,063
1,462
1,067
190
17.81
Export-Import
Bank of
Thailand
1993
56,025
NA
48,929
NA
NA
Small
Industries
Finance
Corporation
1992
33,976
NA
25,251
NA
NA
Source : Bank of Thailand
Note:
*as of September 2004
** as of Mar 2004
THB 40 = USD 1
Today, the Government Housing Bank services more than 900,000 home-owners with a widearray of fixed interest rate loans with amortization periods of up to 30 years and fixed interest
rates up to five years.
The GHB has also often been called to act as a catalyst for economic recovery. To jumpstart the
economy after the 1997 economic crisis, the Thai government selected the then moribund
housing industry's revival as a way to ignite the recovery and restore public sentiment and
confidence. (See Case Study next page) The GHB was asked to play a critical role in the
program's success.
Setting the Context: Thailand
5
Case Study: Government Housing Bank - Government Pension Fund
•
Launched in 2001 to jump-start crisis-ravaged economy
•
Surplus of unsold homes
•
Thai government officials and Government Pension Fund members given lower interest
loans and lenient income qualification standards to buy homes
•
Maximum loan amount 100 per cent of appraised value
•
Low initial year monthly payments - graduated mortgage payments
•
Huge success - 38,298 loan applicants
•
By end of 2004, loans made to 25,311 applicants for new homes
•
Program absorbed significant part of housing oversupply and revived the housing
industry just as the economy began recovering
With the Thai economy now growing consistently at a robust six percent per annum, government
policy has embraced social as well as economic rationales for creating affordable housing for
low and lower-middle-income households. It is supporting these policy measures by creating an
environment that stimulates the demand and supply for housing.
These measures include:
1. Ensuring low interest-rate environments
2. Developing a reliable Real Estate Information Center
3. Developing long-term transportation and urban planning strategies
4. Improving Consumer Protection laws for homebuyers
5. Developing an active secondary housing market
A long -term Government Housing Bank goal is diversifying its current funding sources, 86
percent of which come from domestic deposits and promissory notes. During the past several
6
Setting the Context: Thailand
years, the GHB has issued FRCDs overseas and longer-term domestic bonds to develop a wider
investor appetite for its debt. (See Appendix table)
OTHER INNOVATIVE FINANCING PROGRAMS
We have included a brief description of several innovative financing programs that Thailand has
undertaken in the past several years. (See Appendix for additional descriptions.)
Asset Capitalization Programs
•
Introduced 2003
•
Main driver - Many lower-income individual's assets can't be used as collateral for loans
•
Creating ways to capitalize these assets - Unleash lower-income individual's productivity
by allowing them to borrow against these assets
•
Rental rights used as collateral to apply for individual loans
•
Allow more people to escape poverty trap
Royal Navy - GHB Asset Capitalization Program
• Established in late 2003
• Homes for government employees at Sattahip Royal Navy Base
• 492 two-story detached homes on land leased 30 years from Treasury Department
• The Treasury Department increased then-conventional one-year leases to 30 years as part
of the Government’s Asset Capitalization Program
• Home mortgages from Government Housing Bank
• Homes built under NHA auspices
• Individual monthly payments - approximately Bt1,500 ($US$ 35) per month
• Completion date - late 2005
Real Estate Information Center
• Established by Thai Cabinet Resolution August 17, 2004
• Commenced operations September 1, 2004
• Developed by Government Housing Bank under Ministry of Finance Supervision
Setting the Context: Thailand
7
• Objective to be a reliable and up-to-date center for real estate information in Thailand
• Currently has 30 employees (see web-site www.reic.or.th)
BIG HOUSING CHALLENGES /ISSUES
1. The big housing challenge is building enough appropriate housing for the low and lower-
middle income urban poor in Thailand.
The Baan Eur Ah-torn project has admirable objectives but it has been difficult achieving its
stated production-goals. Even with zero land costs, developers in Thailand are finding it difficult
to build houses profitably at the designated sale prices that translate into affordable monthly
mortgage payments for the urban poor.
Many private housing developers say that they avoid this market because margins are too thin.
However, more economical alternative construction models are continuously being evaluated.
Many Thai developers are now considering constructing mass-produced housing modules that
can bring costs down to levels that can support the current sale price and yet still yield a
reasonable developers' profit.
2. A second housing challenge is developing the infrastructure and legal mechanisms for
converting slum and squatters rights into legal rights that satisfy all stakeholders. This will be a
long-term Thai policy challenge.
3. The third housing challenging is further developing the secondary home-resale market. Some
studies show that in Thailand, the number of existing homes for sale far exceeds new homes
available for sale. Most existing home sales are by-owner or through so-called amateur brokers.
Further developing the roles of professional real estate brokers and sales agents may be a critical
way to stimulate secondary homes sales.
Currently, no specific real estate broker or sales agent licensing law exists in Thailand and no
government body exclusively regulates real estate brokers and agents. The real estate broker or
8
Setting the Context: Thailand
agent is generally viewed as a middle man or person who brings buyers and sellers together and
negotiates the sale and/or purchase of real property with the expectation of compensation.
Real estate industry officials have for years lobbied the government to enact Real Estate Broker
and Sales Agent licensing laws, but their efforts so far have fallen on deaf ears.
Another key way to increase secondary home sales is by reducing various income and
transaction taxes on existing-home sales. Recently, the Minister of Finance announced a general
policy to stimulate the secondary home-resale market. These policies are also intended to
enhance the new home market, drive economic growth and improve the Thai general public’s
quality of life.
BIG HOUSING FINANCE CHALLENGES
1. The big housing finance challenge in the long-term will be developing an infrastructure that
will deliver all purchasers the optimal and most appropriate low-cost mortgages available.
On the product side, it means continuous innovations and introducing new products that meet the
changing needs of a fast-developing a young economy. Thailand’s young population will be
buying more and more homes during the next several decades.
2. Policy makers must ensure that the country has a financial and legal infrastructure that can
rapidly adjust to the quick-changing needs of the financial institutions that deliver mortgages to
the country's home buyers. Laws must be continuously up-dated to ensure that foreign capital
can be readily invested in the funding of these institutions as they inevitably grow to service the
mushrooming housing needs of a rapidly expanding young Thai population.
Setting the Context: Thailand
9
KEY QUESTIONS TO BRING TO BELLAGIO
1. What other appropriate and viable solutions are there for delivering housing to low and
lower-income households?
2. What alternative and appropriate long-term strategies are there for developing an optimal
real estate financing environment for a fast-developing country, such as Thailand, in
transition?
10
Setting the Context: Thailand
REFERENCES
Asian Coalition for Housing Rights., 2004, Launched Real Estate Projects Report (November
2004)., [Online]. Available: www.achr.net/bmp_2.htm, [2005, Jan7]
Asian Coalition for Housing Rights., 2004, Thailand's Challenge to Solve its Urban Poor
Housing Problem, [Online]. Available: www.achr.net/bmp_3.htm, [2005, Jan7]
Board Of Investment., (1994), BOI’ Housing situation and trend in year 1993-1994, [Online].
Avaliable: www.bot.or.th, [2005, Jan 7]
Boonyabancha, S., 2004, Key Issues in Addressing Urban Poverty, UCDO, ACHR [Online].
Available: http://www.achr.net/networks.htm, [2005, Jan 14]
Boonyabancha, S., June 2004 - Special issue on Baan Mankong [Online], Avaliable:
http://www.codi.or.th/index.php?option=articles&task=viewarticle&artid=211, [2005,
Jan 11]
Kasikorn Research Center, 2004., Thai housing sector expected to maintain steady growth in
2005, [Online], Avaliable: http://www.kasikornresearch.com/index.wcgi [2005, Jan13]
Kritayanavaj, B., (2002), Financing Affordable Homeownership in Thailand: Roles of the
Government Housing Bank Since the Economic Crisis (1997-2002)., 2002 Journal of
Housing Finance International, vol.17, iss.4, pp.15-26.
Nakornthab, D. & Piamchok, S. & Kanchanasai, C., (2004), Bank lending, the housing market
and risks: A test for financial fragility [Online], Available:
(http://www.bot.or.th/bothomepage/databank/EconData/EconFinance/tab88e.asp, [2005,
Jan 5]
Setting the Context: Thailand
11
National Association of Realtors,2004., Market Situation [Online], Available:
http://www.realtor.orgintlprof.nsf/All/Thailand?OpenDocument, [2005, Jan 11]
National Economic and Social Development Board, 2004., Economic Performance in Q3/2004
and Outlook 2004- 2005 [online] , Available: http://www.nesdb.go.th, [2005,Jan 12]
Northrup, J., 2004, Securitization and Secondary Markets [Online] , Available:
http://www.finir.org/securitization/s_home.htm ,[2005,Jan 14]
Social Security Organisation., 2004 , GHB-SSO Housing program, [Online], Avaliable:
http://www.sso.or.th, [ 2005, Jan 10]
Secondary Mortgage Corparation., 2004, Securitization, [Online], Avaliable:
www.smcthailand.com, [2005, Jan 12]
Thailand
property
market
promising,
2004
,[Unknown]
,[
Online]
,
Available:
http://www.thaipro.com/thailand_00/296_thailand-property.htm, [2005, Jan 10]
The Community Organizations Development Institution., 2004, The CODI Update, ISSUE No.4,
June 2004
The National Housing Authority., 2004, Baan Eur Ah-thorn project , [Online], Avaliable:
http://www.nhanet.or.th/eng/aboutnha.html, [2005, Jan 5]
12
Setting the Context: Thailand
APPENDIX
Table 1 : Key Features of Financial Institutions in Thailand (as of Sep 2004)
Financial Institutions
Operation
began in
Total
Assets *
Total
Deposits
Total
Credits
(Billion Baht) (Billion Baht) (Billion Baht)
Home
Loans
(Billion
Baht)
Home loans to
Total Credits
(%)
Commercial banks
1888
7,728
5,710
5,073
516
10.18
Government Housing Bank
1953
657
561
392
375
95.52
Government Saving Bank
1949
469
284
314
95
30.16
Finance companies
1969
396
260
266
6
2.20
Life insurance companies *
1929
290**
386
44
Na
Na
Credit Foncier companies
1969
2
1
1
.2
17.81
Export-Import Bank of
Thailand
1993
56
Na
49
Na
Na
Small Industries Finance
Corporation
1992
34
Na
25
Na
Na
Source : Bank of Thailand
Note: *as of September 2004
** as of Mar 2004
THB 40 = USD 1
Table 2 : Residential Mortgage Loans/ All Types of Loans and the Thai Economy
Items
1990
1995
2000
2002
2003
2004 Q3
138
574
689
764
914
1,001
GDP - billion USD
1,979
4,250
4,309
4,623
6,145
6,618
All Types of Loans - billion USD
2,184
4,186
4,917
5,433
5,939
6,501
RL : AL (%)
6.3
13.7
14.0
14.1
15.4
15.4
RL : GDP (%)
7.0
13.5
16.0
16.5
14.9
16.0
Residential Mortgage Outstanding
Loans (RL) - billion USD
Source: Bank of Thailand
Setting the Context: Thailand
13
Table 3: Baan Mankong: Progress update as of December 2004
Regions
Number of
Number
Number
Number
Budget approving
Provinces / cities
of projects
of communities
of families
(million Baht)
2/41
38
65
6,437
244.3
6/6
19
29
1,740
55.5
Southern Region
7/8
25
29
1,740
41.7
Northern Region
8/8
18
43
2,679
45.5
8/12
28
32
2,407
82
33/55
128
198
14,681
467
Bangkok & Pheriphery
Center Region
Eastern Region
Northeastern Region
Total
Source: the Community Organizations Development Institute (CODI)
Table 4: Major GHB’s Source of Funds at Year-end 2004
Amount: Million baht
Item
2001
Amount
2002
Borrowers
(%)
Amount
2003
Borrowers
(%)
Amount
2004
Borrows
(%)
Amount
Borrows
(%)
1. Deposits
&
promissory
notes
2. Domestic
borrowing
217,209.75
75.06
251,773.76
80.34
298,084.80
84.22
349,778.45
86.04
5,300.87
1.83
3,000.00
0.96
6,498.50
1.84
14,405.68
3.54
3. Overseas
borrowing
8,871.94
3.07
8,660.68
2.76
8,338.00
2.36
8,329.42
2.06
58,000.00
20.04
50,000.00
15.94
41,000.00
11.58
34,000
8.36
289,382.56
100.00
313,434.43
100.00
353,921.30
100.00
406,513.55
100.00
4. Bonds
Total
Source: The Government Housing Bank
14
Setting the Context: Thailand
Figure 1 : Proportion of Different Types of Residential Units Completed in 2004
Volume : Units
200,000
%
100
Share of Project-Built (%)
180,000
140,000
83.2
80.4
140,301
79.5
136,104
160,000
81.1
80
138,726
64.4
117,937
120,000
53.6
100,000
80,000
60,000
35,150
40,000
28,059
27,418
22,716
20,000
0
43.6
42.3
1994
1995
1996
1997
1998
17,885
17,885
15,497
18,064
13,964
13,964
14,384
19,639
1999
2000
2001
Self-Built
60
48
40
41,148
32,118
66.7
63.2
31,996
16,342
14,384 17,69316,342
18,598
2002
Project-Built
28,031
20
13,947
2003
2004 (Q3)
0
Share of Project-Built
Source : The National Housing Authority; Compiled by Housing Information Division, Housing Information and
Research Department, GHB
Figure 2 : Residential Units Newly Launched in Bangkok and Periphery
during 1992 – 2004
Volume : Units
350,000
Growth Rate (%)
-28.4
300,000
93.4
123.7
-43.9 -54.3
-36.4
-97.4
26.7
124.0
102.5 114.2
61.7
Others
253,159
250,000
0.8
Condominium
Town Houses
200,000
Detached Houses
142,023
150,000
113,150
100,000
64,909
58,497
41,300
50,000
0
1992
1993
1994
1995
1996
1997
1,071
1,357
3,040
6,157
1998
1999
2000
2001
13,187 21,320 21,493
2002
2003
2004
Source: Bangkok District Officers and adjacent Provincial Offices; Compiled by Housing Information Division,
Housing Information and Research Department, GHB
Setting the Context: Thailand
15
Figure 3 : Outstanding Residential Mortgage Loans during 1988 - 2004 (Sep.)
Volume : Million Baht
2,000,000
42.9
1,600,000
39.3
36.8
Growth Rate (%)
(%)
31.5
33.8
37.4
33.1
50.0
29.6
23.2
12.0
16.3
11.1
-3.0
1,200,000
-7.4
8.3
0.0
-0.2
-3.3
1,001,435
888,472
793,521
800,000
708,633
769,379
712,402
688,544
763,665
687,458
-50.0
575,211
443,899
400,000
333,518
72,421
100,905
138,002
181,446
242,764
-100.0
0
1988
1990
1989
1992
1991
1994
1993
1996
1998
1995
Commercial Bank
GHB
2000
1997
2002
1999
Finance
GSB
2004 (Q3)
2003
2001
Others
Growth Rate (%)
Sources: Government Houing Bank and Bank of Thailand; Compiled by Research and Foreign Affairs Division,
Housing Information and Research Department, GHB
Note: Home loans extended to individual borrowers, not including those extended to developers
Other includes the National Housing Authority, credit foncier companies and insurance
Figure 4: Market Shares of Outstanding Home Loans during 1988 - 2004 (Sep.)
80.0
Volume : Million Baht
Commercial Bank
67.668.7 69.0 68.9 68.1 67.7 67.1
67.6
64.4
60.0
61.1
GHB
57.2
Finance
20.0
34.0
23.5
20.2 20.4 21.0 19.4
18.8
17.2
17.2
16.7
16.7
1988
7.3
1990
1989
1992
1991
1994
1993
1996
1995
37.5 38.7 39.3 39.3 38.0 36.9 36.9
3.9
2.7
1.6
10.1
5.1 7.0
1.8 0.6
1.4
1.9
2.4 0.9
10.1
1.4
0.6
8.1 7.4 8.4 9.2 9.4 8.8
3.6
3.6
4.0 2.4
3.3
3.3
2.4
2.6
2.5
6.9 5.0 4.4 0.5 0.8 0.6 0.4 0.3
0.2 0.3 0.7 2.8
0.2
8.0 8.5
0.0
26.9
Others
54.3 53.7 52.5 51.8 52.4
50.4 51.6
40.0
GSB
3.1
2.9
2.2
2.9
3.2
1.8
2.7
1.8
1998
1997
1.6
2000
1999
2001
0.6
0.8
*
0.9
0.6
2002
2004 (Q3)
2003
.
Sources: The National Housing Authority, Credit Foncier companies and Insurance companies, The Government
Savings Bank, Bank of Thailand; Compiled by Research and Foreign Affairs Division, Housing Information and
Research Department, GHB
16
Setting the Context: Thailand
Figure 5 : New Residential Mortgage Loans during 1988 - 2004 (Sep.)
Volume : Million Baht
500,000
%
Growth Rate (%)
73.1
400,000
34.0
10.5
31.9
42.2
32.8
-15.9
209,811
223,408
241,172
296,661
-48.8 -38.0
-100.
213,281
164,851
147,829
111,346
53,736 59,368
0.0
202,720
200,000
40,110
3.4
100.0
46.5
6.8
6.5
300,000
100,000
80.0
69.3
41.9
-200.
112,611
108,886 112,611
103,733
78,306
-300.
64,301
-400.
0
1988
1990
1989
1992
1991
1994
1996
1993
1995
Commercial Banks
GHB
1998
2000
1997
Finance
1999
GSB
2002
2001
Others
2004 (Q3)
2003
Growth Rate (%)
Sources: Bank of Thailand, The Government Housing Bank, The Government Saving Bank, and The National
Housing Authority
Figure 6 : Market Shares of New Residential Mortgage Loans
during 1988 - 2004 (Sep.)
80.0
Volume : Million Baht
68.170.2
66.8
69.9
Commercial Bank
65.0
60.0
68.7 68.2
40.0
20.0
0.0
15.2
10.8
10.8
5.7
5.7
0.2
0.2
9.79.7
2.5
0.2
0.2
1988
2.4
4.9
2.4
0.2
0.2
22.6
2.8
4.6
2.8
0.1
0.1
1990
1989
19.2 19.9 19.2
12.0
12.0
3.7
0.1
0.1
50.7
46.1 47.6
45.9
43.1
41.0
45.9
10.6
10.6
9.6
9.6
2.0
1.7
0.1
0.1
0.1
0.1
52.5
47.1
GSB
8.8
8.8
7.67.6
2.8
2.3 2.8
1.2
0.1
1.2
0.1
30.2 32.6
3.4
3.4
2.1
0.7
0.7
1996
1995
3.4
3.9
3.4
0.6
0.6
5.7
5.7
4.5
1.3
1.3
1998
1997
6.2
6.2
4.6
1.0
1.0
35.0
35.0
37.5
27.6
11.9 *
11.9
8.1 * 8.1
4.8
4.8 2.4
2.4
2.0
1.1
1.1
2.0
2000
1999
52.9 52.3
1994
1993
Others
1992
1991
24.6
57.9
56.4
31.9
17.4
17.4
Finance
64.2
25.7
GHB
15.7
15.7
3.5 ** 1.7 **
0.4
0.3
0.3
0.4
2002
2001
10.7
10.7
2004 (Q3)
2003
.
Sources: Bank of Thailand, The Government Housing Bank, The Government Saving Bank, and The National
Housing Authority, Credit Foncier Companies and Insurance Companies.; Complied by Housing Information
Division, Housing Information and Research Department, GHB
Setting the Context: Thailand
17
Figure 7 : Summary of housing units completed 1976-November 2004
Source: National Housing Authority
Additional Innovative Financing Programs:
1. Micro-Finance Provider - Commercial Organization Development Institutions
(CODI)
•
Commercial Banks - urban poor don't qualify as customers
•
CODI in Thailand - established 1992
•
Establish savings and credit schemes within individual communities
•
Funding offered to community or people's organizations
•
Allows community to control development process
•
More importantly - strengthens bargaining position re: evictions, plans for land
acquisition and control of family finances
•
Has become collaborative development mechanism belonging entirely to communities
within the same constituencies - developing group decisions
•
18
CODI heavily involved in Baan Mankong
Setting the Context: Thailand
2. Hire-Purchase Programs
•
Introduced 2004
•
Low-income individual with no prior credit records to purchase homes
•
Occupies home under a hire purchase contract
•
Payments of three to five years before house registered as sold
•
After proving themselves as credit worthy - becomes purchasers and obtain mortgage
3. Securitization
•
GHB to securitize part of its portfolio in 2005
•
Diversify funding and portfolio risk
4. Mortgage Default Insurance
•
Insurance for risk associated with loans that exceed normal 75 to 80 per cent loan to
value ratios
•
Also will support values for future securitization portfolios
•
2002 World Bank-funded feasibility study
•
April 2005 - Cooperating with Canada Mortgage Housing Corporation (CMHC) and
International Finance Corporation (IFC) to develop action plan for establishing Mortgage
Default Insurance for Thailand
•
Partial Funding from CIDA Inc
Setting the Context: Thailand
19