Existing Homes Offer New Answer to Thailand's Homeownership Gap

Thailand’s housing market continues to face a gap between people who want to buy a home and those able to secure a mortgage, prompting Bangkok Commercial Asset Management (BAM) to offer alternative ways to access housing. Dr. Rak Worakijphokatorn, Chief Executive Officer of BAM, said access to financing has become one of the key challenges facing the property market, even though real demand for housing remains. Weaker purchasing power, uncertain incomes, rising living costs and stricter lending conditions have caused many potential buyers to postpone home purchases. The pressure is particularly visible in the 2–5 million baht housing segment, affecting lower-income earners, self-employed workers and people with irregular incomes. “Thai people have not lost their desire to own a home, but financial constraints have made home ownership more difficult,” Dr. Rak said. One approach gaining attention in the housing market is “rent before buying”, allowing consumers to begin by renting a property before deciding whether to purchase it. BAM is also offering direct installment payments through its “Public Assets” program, giving buyers an alternative to conventional bank financing when purchasing properties from the company. The program covers properties classified as non-performing assets (NPA), including detached houses, townhouses, condominiums, commercial buildings and land in locations across the country. More than 21,000 properties are currently included in the program, giving buyers a range of options across different property types and occupations. BAM said it is designing flexible payment conditions to help narrow the gap between people who need a home and those who can qualify for a mortgage. Dr. Rak said the large amount of existing housing supply in the market also means the solution should not focus solely on developing new properties. “Supply remains substantial in the property market, while purchasing power and access to financing are constrained,” he said. “The focus should therefore include bringing existing properties back into productive use, improving them where necessary and making them available to people with genuine demand at appropriate prices.” BAM said its approach aims to put existing NPA properties back into circulation while creating additional options for households that face difficulties obtaining conventional home loans. “We believe Thai people still want to own homes. We need to create options that make it easier for them to reach that home,” Dr. Rak said.