Thai Finance Ministry Puts Off First-Home Plan

[webfact]

Ministry Puts Off First-home Plan

BANGKOK: -- The Finance Ministry has decided to delay extending the First-home Program to cover housing units priced under two million baht, pending the ongoing study on other alternatives.

The Finance Ministry has decided to postpone the expansion of the First-home Program to residential units priced at two million baht or lower from the original schedule this month.

Currently, only houses priced at one million baht or lower are entitled to zero interest for three years on the government's subsidy.

Deputy Finance Minister Wirun Techapaiboon, who is tasked with overseeing state-controlled banks, said that at the moment, the government is looking into other alternatives, such as the joint investment scheme between buyers and lenders similar to the credit policy adopted by the Islamic Bank of Britain.

This scheme will be available for buyers in form of lease-purchase agreements.

For instance, for a three million-baht property, the buyer will have to pay upfront fee of 500,000 baht to the bank which will be later calculated into the loan interest.

Later, the buyer will have an option to buy out the property at the total price of 3.5 million baht.

This is aimed at bringing more expensive properties into the program and reduce risk for the lenders.

Wirun added that the Fiscal Policy Office has been ordered to determine which method would be the most effective in stimulating the economy should two million-baht housing units are taken into the First-home Program.

He believes that the joint investment scheme will be best for the buyers who are not yet financially secure because they will not be overburdened with high interest rates.

If the plan is effective, the government will incorporate other state-owned banks into the program.

-- Tan Network 2012-04-10

[WackySomchai]

Yet another broken election promise. White-washing the fugitive seems to be the only subject given any attention by the Puea Thaksin government.

[animatic]

Can't figure how to make enough money to pass around, better study it somemore.

Same stink, different day.

[Thailand]

Not a bad move,extending 100% mortgages to higher priced properties has caused big bubbles and property price collapses in other places.

And I thought that the gov were finalizing the tablet computer deal and that 300baht a day min wage was already adopted in some provinces?Seems to be steps in the right direction to fulfilling some of their election pledges?

[slapout]

Not a bad move,extending 100% mortgages to higher priced properties has caused big bubbles and property price collapses in other places.

And I thought that the gov were finalizing the tablet computer deal and that 300baht a day min wage was already adopted in some provinces?Seems to be steps in the right direction to fulfilling some of their election pledges?

I do not remember the campaign promise of 300 baht mentioning, excluding many of Thai's, nor the one tablet per student mentioning , only 850,000 students and even the referenced partial application, has not happened yet

[Unkomoncents]

One step forward (minimum wage hike), one step back. It smart: give the poorest more pocket change but reverse the pledge to help lower middle class/middle-class Thais own their own property. Land/property acquisition is one of the mainstays of upward mobility in Thailand. That's why the Land Ministry is named by the National Anti-Corruption Commission as one of the most recalcitrant government departments. The undeserving shall not be empowered by property ownership.

The minimum wage increase attracted great attention in the media. This will fizzle and disappear as soon as the week is out.

Edited April 10, 2012 by Unkomoncents

[soundman]

Can't figure how to make enough money to pass around, better study it somemore.

Same stink, different day.

Oh yes they can.

Word on the grapevine in the Petroleum wholesaling business is that Benzene Petroleum products will incur another 1.07B per litre as of 16th of April. I think this is the fourth 1.07 Baht tax increase on Benzene products in the last three or four months.

[animatic]

Can't figure how to make enough money to pass around, better study it somemore.

Same stink, different day.

Oh yes they can.

Word on the grapevine in the Petroleum wholesaling business is that Benzene Petroleum products will incur another 1.07B per litre as of 16th of April. I think this is the fourth 1.07 Baht tax increase on Benzene products in the last three or four months.

Oh yes that is quite observable.

I was meaning about the cheap housing financing deal.

Big ticket items are harder to skim off of, because there are fewer of them.

Of course kick backs have a smaller margin too, so where to put the money for best return?

Edited April 10, 2012 by animatic

[Buchholz]

Can't figure how to make enough money to pass around, better study it some more.

Same stink, different day.

Oh yes they can.

Word on the grapevine in the Petroleum wholesaling business is that Benzene Petroleum products will incur another 1.07B per litre as of 16th of April. I think this is the fourth 1.07 Baht tax increase on Benzene products in the last three or four months.

from the thread:

Gas, Oil Prices To Hike Power Rates Soon: Thailand

Announced today that benzene 91 and 95 will go up a full baht per liter on April 16.

Additionally, LPG will be raised then to 11.41 Baht per liter.

Lastly, NGV retail price will also go up to 10.50 baht per kilo.

http://www.thaivisa....ost__p__5206235

[siampolee]

For instance, for a three million-baht property, the buyer will have to pay upfront fee of 500,000 baht to the bank which will be later calculated into the loan interest.

Later, the buyer will have an option to buy out the property at the total price of 3.5 million baht.

This is aimed at bringing more expensive properties into the program and reduce risk for the lenders.

So poor old Somchai antes up a 500,000baht fee of his own money to the bank who then put it on top of the price tag and Somchai has to pay his money yet again, good deal for the bank is it not.

Interesting take on economics, you pay the fee then the bank make you pay the fee you paid back to them as an extra charge.

I would call that theft personally

[nbm47]

Lies, damned lies and Pueau Thai Party promises .............

[MEL1]

Can't figure how to make enough money to pass around, better study it somemore.

Same stink, different day.

Oh yes they can.

Word on the grapevine in the Petroleum wholesaling business is that Benzene Petroleum products will incur another 1.07B per litre as of 16th of April. I think this is the fourth 1.07 Baht tax increase on Benzene products in the last three or four months.

Oh yes that is quite observable.

I was meaning about the cheap housing financing deal.

Big ticket items are harder to skim off of, because there are fewer of them.

Of course kick backs have a smaller margin too, so where to put the money for best return?

Of course, the cheap housing deals were set up to set up the buyers of the land, which included all that we don't need to allay propositions against, as we know family names already.

The inner land, around and about Don Mueang and Mueang Ake are now flood potentials, amongst many other areas, and nobody wants to buy anymore; many of which these places were, and are, the building estates of those 'families' who invested.

Now the lenders are at risk, from their own high-flying ranking officials, and are in contempt of continuation at their own losses. Shame!

Buy into the top, get shat on from the top, and you lose. That's TIT for you!

-mel.

[rubl]

I'm really surprised at all the negative vibes here. Think positive, guys.

The government is thinking of schemes which will allow people with limited amounts of money to buy a house with just a simple, small downpayment of THB 500,000. How difficult can that be for the Thai people who voted Pheu Thai, or any Thai people for what it matters ?

Edited April 10, 2012 by rubl

[Woodcaulk]

One step forward (minimum wage hike),

Perhaps politically shrewd, this only screws 200baht per day Somchai....either less jobs available due to increase of 100baht per day cost of doing business, or inflationary rise in prices of goods and services that Somchai's extra 100bht per day will not keep up with.

Edited April 10, 2012 by Woodcaulk

[Thailand]

Not a bad move,extending 100% mortgages to higher priced properties has caused big bubbles and property price collapses in other places.

And I thought that the gov were finalizing the tablet computer deal and that 300baht a day min wage was already adopted in some provinces?Seems to be steps in the right direction to fulfilling some of their election pledges?

I do not remember the campaign promise of 300 baht mentioning, excluding many of Thai's, nor the one tablet per student mentioning , only 850,000 students and even the referenced partial application, has not happened yet

And wasn't the 300 baht per month already implemented in some provinces last month?

I'm really surprised at all the negative vibes here. Think positive, guys.

The government is thinking of schemes which will allow people with limited amounts of money to buy a house with just a simple, small downpayment of THB 500,000. How difficult can that be for the Thai people who voted Pheu Thai, or any Thai people for what it matters ?

This is TV !

[Valentine]

For instance, for a three million-baht property, the buyer will have to pay upfront fee of 500,000 baht to the bank which will be later calculated into the loan interest.

Later, the buyer will have an option to buy out the property at the total price of 3.5 million baht.

This is aimed at bringing more expensive properties into the program and reduce risk for the lenders.

So poor old Somchai antes up a 500,000baht fee of his own money to the bank who then put it on top of the price tag and Somchai has to pay his money yet again, good deal for the bank is it not.

Interesting take on economics, you pay the fee then the bank make you pay the fee you paid back to them as an extra charge.

I would call that theft personally

I found this hard to fathom & wonder if it was reported correctly or some details were missing.

[Mosha]

Yet another broken election promise. White-washing the fugitive seems to be the only subject given any attention by the Puea Thaksin government.

PTP theme tune "Another one bites the dust"

[jcw]

Does anyone actually have the the pre election promise?

[Thaddeus]

Does anyone actually have the the pre election promise?

My mates daughter is still waiting for her pony.

[JohnAllan]

"For instance, for a three million-baht property, the buyer will have to pay upfront fee of 500,000 baht to the bank which will be later calculated into the loan interest. Later, the buyer will have an option to buy out the property at the total price of 3.5 million baht."

Maybe it's too early in the day for me, but I'm missing something here. The buyer PAYS the bank a fee which is later factored into the interest calculations, and into the price of the house - as in: it increases both. That needs some clarification. Is it supposed to represent advance lease payment or just a hefty fee? Either way, the buyer will be paying an extra B1.0M in addition to interest payments.

[anterian]

"For instance, for a three million-baht property, the buyer will have to pay upfront fee of 500,000 baht to the bank which will be later calculated into the loan interest. Later, the buyer will have an option to buy out the property at the total price of 3.5 million baht."

Maybe it's too early in the day for me, but I'm missing something here. The buyer PAYS the bank a fee which is later factored into the interest calculations, and into the price of the house - as in: it increases both. That needs some clarification. Is it supposed to represent advance lease payment or just a hefty fee? Either way, the buyer will be paying an extra B1.0M in addition to interest payments.

This is definitely not the way the British Islamic bank works, I think something is badly wrong with the translation or the reporter's understanding.

[Thaddeus]

"For instance, for a three million-baht property, the buyer will have to pay upfront fee of 500,000 baht to the bank which will be later calculated into the loan interest. Later, the buyer will have an option to buy out the property at the total price of 3.5 million baht."

Maybe it's too early in the day for me, but I'm missing something here. The buyer PAYS the bank a fee which is later factored into the interest calculations, and into the price of the house - as in: it increases both. That needs some clarification. Is it supposed to represent advance lease payment or just a hefty fee? Either way, the buyer will be paying an extra B1.0M in addition to interest payments.

This is definitely not the way the British Islamic bank works, I think something is badly wrong with the translation or the reporter's understanding.

I also think something is wrong with the translation, but mentioning 'British Islamic bank' what the ?

[anterian]

"For instance, for a three million-baht property, the buyer will have to pay upfront fee of 500,000 baht to the bank which will be later calculated into the loan interest. Later, the buyer will have an option to buy out the property at the total price of 3.5 million baht."

Maybe it's too early in the day for me, but I'm missing something here. The buyer PAYS the bank a fee which is later factored into the interest calculations, and into the price of the house - as in: it increases both. That needs some clarification. Is it supposed to represent advance lease payment or just a hefty fee? Either way, the buyer will be paying an extra B1.0M in addition to interest payments.

This is definitely not the way the British Islamic bank works, I think something is badly wrong with the translation or the reporter's understanding.

I also think something is wrong with the translation, but mentioning 'British Islamic bank' what the ?

"similar to the credit policy adopted by the Islamic Bank of Britain." Under Sharia law usury, lending money for profit, is not allowed. Islamic banks have come up with crafty ways of getting around this, mainly by playing with words and terminology.

[Thaddeus]

"For instance, for a three million-baht property, the buyer will have to pay upfront fee of 500,000 baht to the bank which will be later calculated into the loan interest. Later, the buyer will have an option to buy out the property at the total price of 3.5 million baht."

Maybe it's too early in the day for me, but I'm missing something here. The buyer PAYS the bank a fee which is later factored into the interest calculations, and into the price of the house - as in: it increases both. That needs some clarification. Is it supposed to represent advance lease payment or just a hefty fee? Either way, the buyer will be paying an extra B1.0M in addition to interest payments.

This is definitely not the way the British Islamic bank works, I think something is badly wrong with the translation or the reporter's understanding.

I also think something is wrong with the translation, but mentioning 'British Islamic bank' what the ?

"similar to the credit policy adopted by the Islamic Bank of Britain." Under Sharia law usury, lending money for profit, is not allowed. Islamic banks have come up with crafty ways of getting around this, mainly by playing with words and terminology.

Aha, thank you for the explanation.

[anterian]

Aha, thank you for the explanation.

A more detailed explanation here:-

An innovative approach applied by some banks for home loans, called Musharaka al-Mutanaqisa, allows for a floating rate in the form of rental. The bank and borrower form a partnership entity, both providing capital at an agreed percentage to purchase the property. The partnership entity then rents out the property to the borrower and charges rent. The bank and the borrower will then share the proceeds from this rent based on the current equity share of the partnership. At the same time, the borrower in the partnership entity also buys the bank's share of the property at agreed installments until the full equity is transferred to the borrower and the partnership is ended. If default occurs, both the bank and the borrower receive a proportion of the proceeds from the sale of the property based on each party's current equity. This method allows for floating rates according to the current market rate such as the BLR (base lending rate), especially in a dual-banking system like in Malaysia.

This I think is what I think the garbled OP meant.

[OzMick]

"For instance, for a three million-baht property, the buyer will have to pay upfront fee of 500,000 baht to the bank which will be later calculated into the loan interest. Later, the buyer will have an option to buy out the property at the total price of 3.5 million baht."

Maybe it's too early in the day for me, but I'm missing something here. The buyer PAYS the bank a fee which is later factored into the interest calculations, and into the price of the house - as in: it increases both. That needs some clarification. Is it supposed to represent advance lease payment or just a hefty fee? Either way, the buyer will be paying an extra B1.0M in addition to interest payments.

This is definitely not the way the British Islamic bank works, I think something is badly wrong with the translation or the reporter's understanding.

I also think something is wrong with the translation, but mentioning 'British Islamic bank' what the ?

"similar to the credit policy adopted by the Islamic Bank of Britain." Under Sharia law usury, lending money for profit, is not allowed. Islamic banks have come up with crafty ways of getting around this, mainly by playing with words and terminology.

You forgot "hypocrisy" as they are doing EXACTLY what they criticize others of, supposedly proscribed in the Koran.

Edited April 12, 2012 by OzMick

[anterian]

You forgot "hypocrisy" as they are doing EXACTLY what they criticize others of, supposedly proscribed in the Koran.

"mainly by playing with words and terminology." = hypocrisy.