Bangkok Needs More Low-Cost Properties for Lower Income Sectors
With property prices in Bangkok climbing, the government is finding it difficult to supply low-cost homes for low-income population segments. Real estate developers and non-government organisations both affirmed the lack of property provisions for the poor.
According to the Thai Real Estate Association president, Pornarit Chounchaisit, Thailand’s capital needs an excess of 300,000 low-cost housing units. At present, only 30,000 units are under construction and officially sanctioned by the authorities.
Not Enough Low-Cost Properties in Bangkok
In a press conference organised by Habitat for Humanity, an NGO specialising in affordable homes, Pornarit said: “Total mortgage transfers amounted to 80 trillion baht last year, but only five per cent of that accounted for low-cost housing.”
In spite of a slowing economy, real estate prices in Bangkok continue to go up. With not enough affordable properties for lower-income brackets, Bangkok fails to provide secure homeownership for marginalised citizens. Many people in the capital, and the rest of Thailand, lack assets that may qualify them for mortgage loans.
Pornarit said: “We can reduce construction costs, but land prices aren’t going down despite the economy.”
To demonstrate just how competitive the property market of Bangkok is, Pornarit shared a story about a former employee. The said employee commuted for fours every day just to get to work and back.
In act of concern, he gave the employee some money and ended up firing him. He told him to find another job closer to home.
While Pornarit talked about the plight of Bangkok’s real estate market, a conference participant shared his side of the story. He too was unable to find affordable housing for some time.
Additionally, Chiang Mai University’s School of Public Policy deputy director, Poon Thiengburanathum, said that it took a 30-year mortgage for him to build a 50-square-wah house (approx. 200 square meters) in Chiang Mai. He added that such an undertaking was not fun.
What’s a Feasible Solution for Bangkok’s Housing Problem?
However, to solve Bangkok’s affordable housing issues, public housing may not be the answer. According to the national director of Habitat for Humanity Thailand, Singaporean Tim Loke, it is impossible to copy his home country’s public housing model and implement it in Thailand. Loke also noted that the two countries have different population sizes.
What may work in Singapore may not work in Thailand. Moreover, there are approximately 5 million citizens in the former and 70 million citizens in the latter. Consequently, Thailand will have to look for other public housing models to provide for citizens who do not have access to secure housing.
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Pic credits: Ragna Vorel, Unsplash