Thai Housing Scheme Faces Bank Lending Challenges

The Thai government has introduced a $1.5 billion (50 billion baht) housing scheme offering subsidized mortgages for properties priced under 3 million baht.

Despite the initiative, banks are rejecting over 48% of mortgage applications for homes in this price range, indicating strict lending standards are hindering the program's effectiveness.

Property developers argue that the main barrier to market recovery is not a lack of demand, but the inability of buyers to secure financing due to stringent credit screening by commercial lenders.

A portion of the scheme's funds uses relaxed income guidelines to assess whether banks can safely expand lending criteria and increase loan approval rates.