THE ROUND-UP

He also urged Mr Ekniti to install a new president at THAI within three months.

Sumeth Damrongchaitham, managing director of Dhanarak Asset Management Co, was picked as THAI’s new president in May.

Mr Somkid also urged the state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) to reach a conclusion on debt restructuring for farmers by the end of this month.

Even though the prices of some main crops have improved, farmers’ purchasing power remains weak as they must service debt, he said.

BAAC must help them restructure their debt so they do not use their entire income to repay debt only, he said.

In the meantime, Mr Somkid has instructed GH Bank to propose a plan to the government within 3-4 months to develop high-rise residential projects on a massive scale for low-income earners, those building families and senior citizens.

The state-owned mortgage lender will work with the National Housing Authority and the private sector to develop residential projects in every province across the country, he said.

“We won’t develop projects one by one, but we’ll cooperate with the private sector to launch them on a mass scale,” he said.

Mr Somkid himself was key in pushing the launch of low-cost housing projects called Baan Ua-arthorn under the Thaksin Shinawatra administration. Baan Ua-arthorn was sold at 390,000 baht per unit at the time, with a partial government subsidy.

The incumbent deputy prime minister said GH Bank will be responsible for outlining the budget for the housing projects and the auction development that will be opened to the private sector.

Regarding risks from developing such projects to those with weak affordability, he said that lower income brackets have good track records for mortgage repayment as they prioritise home ownership.

GH Bank president Chatchai Sirilai echoed Mr Somkid’s view, saying that low-income earners who want to own homes do not pose a threat to the real estate market’s structural soundness, unlike those who buy property for speculation.

The bank targeted 1 million low-cost homes to support both pre-financing and mortgages under the project development, he said. GH Bank estimates it must spend 1 trillion baht on the projects’ financial support.

The soon-to-be built budget home is expected to have a price tag up to 1 million baht per unit and the bank will offer low mortgage repayments to buyers at 3,000 a month for a 40-year payment period, said Mr Chatchai.

The bank usually requires borrowers make a minimum repayment of 6,000 baht a month for mortgages worth 1 million baht, he said.