thailand - Joint Center for Housing Studies

SETTING THE CONTEXT: THAILAND MORE THAN SHELTER: HOUSING AS AN INSTRUMENT OF ECONOMIC AND SOCIAL DEVELOPMENT A Harvard Joint Center for Housing Studies International Housing Conference Supported by the Rockefeller Foundation May 9–14, 2005 Bellagio Study and Conference Center Bellagio (Como), Italy

Setting the Context: Thailand 1

ABSTRACT

The Thai economy and its real estate markets experienced several boom and bust cycles during

the past several decades.

The current Thai government views the real estate sector as a major driver of economic stability

and growth. During the past four years, it has enacted numerous new policies to stimulate the

economy and at the same time address the housing requirements of the less privileged.

This paper will discuss Thai housing and the housing finance market's development, including

government and private sector roles. It will also present case studies of successful policy-driven

housing and housing finance programs that played a significant part in helping Thailand's

economy recover from the 1997 economic crisis and which are expected to be key drivers of

sustainable future economic development.

HISTORICAL CONTEXT

Housing Development

Housing has been major policy issue for every Thai government in the past three decades

because of population growth and rapid urbanization.

Thailand's population, which was 53.9 million in 1987, is now more than 65 million. Urban

residents now total more than 20 million people or about 30 percent of the population.

Rapid population growth and continuous urbanization have created numerous demands for

housing over a wide range of income levels. Upper-middle and higher income-level housing

needs are, however, currently well-serviced by the private sector. In 2004, private sector

developers developed 66.7 percent of Thai housing. (Housing Units Launched – See Appendix -

Figure 1)


Despite their housing-market dominance, private developers have largely avoided providing

lower-income and lower-middle-income housing. In large urban areas such as Bangkok, various

governments have implemented a wide range of policies to address the housing needs in urban

slum and squatters' areas, as well as adequate housing for laborers who have migrated to urban-

based manufacturing and service industries.

In addition, policy makers also must address the housing needs of a large informal sector that is

still a significant part of the Thai economy. (Housing Units Launched - See Figure 1)

The most recent published statistics indicate that in Bangkok alone more than 243,000

households lived in slums and squatters settlements, while another 250,000 households lived in

similar circumstances in other parts of the country. (National Housing Authority)

Currently, public and private organizations are cooperating to execute

government mandated housing policies.

Government and Private Sector Participation

Prior to 1960, Thailand’s few private developers produced homes for middle and upper-income

purchasers. The Thai government itself had been building homes primarily for government

employees since the 1940s through the Public Welfare Department.

The Government Housing Bank, established in 1953, acted both as a developer and as a housing

financing institution at the outset but relinquished its housing development role to the National

Housing Authority (NHA) when this was established in 1973.

The NHA was established to provide housing and financial assistance to low and middle-income

people. It was the government's catalyst to the development of rental accommodations and

affordable homes that could be purchased by low and middle-income citizens. It was also

involved in upgrading slum and squatter housing environments.


During the past three decades, the NHA has continually been designated the government's focal

point to provide better housing opportunities for low and lower-middle income purchasers.

Today, many of its efforts are based on joint private and public developments.

In 2004, the Thai housing market was relatively buoyant for middle and upper-middle income-

level homes, with housing completions totalling about 56,000 units in greater Bangkok area

alone. The market for this sector is expected to continue expanding with an economy that is still

growing at about six percent per annum.

Currently, the Thai government has initiated several joint private and public programs to address

the needs of the urban poor and lower-income households. A brief synopses of two of these

programs is shown below:

1. Baan Eur-Artorn Low-Cost Housing Program

• Low-cost housing development to enhance economic growth

• Target - 600,000 homes between 2003 and 2007

• NHA to execute project

• Homes for lower-income people, including civil servants and government

enterprise employees.

• Selling price to purchaser Bt390,000 per home ($US9,750)

• Government subsidy Bt80,000 ($US2,000) per home.

• Government Housing Bank to provide low-interest loans to buyers - limited NHA

guarantees

• Slow Progress - difficulty delivering final product within designated costs

2. Baan Mankong - National Slum Upgrading Program

• Urban Poor Communities in Thailand - 2000 survey - 1.14 million households, 5.13

million people

• Squatters on public, private or temple lands

• Program to create secure tenure and provide basic infrastructure and improve housing

in these settlements as a basic right on a nationwide scale


• Alternative to delivering new housing units by delivering comprehensive long-term

solutions

• Linking development of secure housing with the larger and more comprehensive

process of community development, encompassing economics, environment and

public health

• Implementation and execution by community people and community networks with local

development organization support (See Appendix for December 2004 project update)

HOUSING FINANCE OVERVIEW – THAILAND

In 1953, the Thai government established the Government Housing Bank (GHB) with the special

objective to provide housing finance. During the first 20 years, the GHB acted both as a housing

finance institution as well as real estate developer. It's housing development role was supplanted

by the National Housing Authority's creation in 1973. (for a more detailed description of he

GHB go to the English section of www.reic.or.th)

Although the Government Housing Bank has a 38 percent market share and is the largest single

housing mortgage provider in Thailand, the 12 commercial banks, with their large deposit bases,

together have a more than 50 percent market share. (See Table 1)


Table 1 : Key Features of Financial Institutions in Thailand (as of Sep 2004)

Total Assets * Total

Deposits Total

Credits Home Loans Financial

Institutions

Operation began

in (Million Baht) (Million Baht) (Million Baht) (Million Baht)

Home loans to Total

Credits (%)

Commercial banks 1888 7,728,481 5,710,833 5,072,716 516,456 10.18

Government Housing Bank 1953 657,342 560,592 392,459 374,858 95.52

Government Saving Bank 1949 469,200 284,182 314,375 94,803 30.16

Finance companies 1969 396,116 259,780 266,394 5,857 2.20

Life insurance companies * 1929 290,049** 386,270 44,417 Na Na

Credit Foncier companies 1969 2,063 1,462 1,067 190 17.81

Export-Import Bank of Thailand

1993 56,025 NA 48,929 NA NA

Small Industries Finance Corporation

1992 33,976 NA 25,251 NA NA

Source : Bank of Thailand

Note: *as of September 2004 ** as of Mar 2004 THB 40 = USD 1

Today, the Government Housing Bank services more than 900,000 home-owners with a wide-

array of fixed interest rate loans with amortization periods of up to 30 years and fixed interest

rates up to five years.

The GHB has also often been called to act as a catalyst for economic recovery. To jumpstart the

economy after the 1997 economic crisis, the Thai government selected the then moribund

housing industry's revival as a way to ignite the recovery and restore public sentiment and

confidence. (See Case Study next page) The GHB was asked to play a critical role in the

program's success.


Case Study: Government Housing Bank - Government Pension Fund

• Launched in 2001 to jump-start crisis-ravaged economy

• Surplus of unsold homes

• Thai government officials and Government Pension Fund members given lower interest

loans and lenient income qualification standards to buy homes

• Maximum loan amount 100 per cent of appraised value

• Low initial year monthly payments - graduated mortgage payments

• Huge success - 38,298 loan applicants

• By end of 2004, loans made to 25,311 applicants for new homes

• Program absorbed significant part of housing oversupply and revived the housing

industry just as the economy began recovering

With the Thai economy now growing consistently at a robust six percent per annum, government

policy has embraced social as well as economic rationales for creating affordable housing for

low and lower-middle-income households. It is supporting these policy measures by creating an

environment that stimulates the demand and supply for housing.

These measures include:

1. Ensuring low interest-rate environments

2. Developing a reliable Real Estate Information Center

3. Developing long-term transportation and urban planning strategies

4. Improving Consumer Protection laws for homebuyers

5. Developing an active secondary housing market

A long -term Government Housing Bank goal is diversifying its current funding sources, 86

percent of which come from domestic deposits and promissory notes. During the past several


years, the GHB has issued FRCDs overseas and longer-term domestic bonds to develop a wider

investor appetite for its debt. (See Appendix table)

OTHER INNOVATIVE FINANCING PROGRAMS

We have included a brief description of several innovative financing programs that Thailand has

undertaken in the past several years. (See Appendix for additional descriptions.)

Asset Capitalization Programs

• Introduced 2003

• Main driver - Many lower-income individual's assets can't be used as collateral for loans

• Creating ways to capitalize these assets - Unleash lower-income individual's productivity

by allowing them to borrow against these assets

• Rental rights used as collateral to apply for individual loans

• Allow more people to escape poverty trap

Royal Navy - GHB Asset Capitalization Program

• Established in late 2003

• Homes for government employees at Sattahip Royal Navy Base

• 492 two-story detached homes on land leased 30 years from Treasury Department

• The Treasury Department increased then-conventional one-year leases to 30 years as part

of the Government’s Asset Capitalization Program

• Home mortgages from Government Housing Bank

• Homes built under NHA auspices

• Individual monthly payments - approximately Bt1,500 ($US$ 35) per month

• Completion date - late 2005

Real Estate Information Center

• Established by Thai Cabinet Resolution August 17, 2004

• Commenced operations September 1, 2004

• Developed by Government Housing Bank under Ministry of Finance Supervision


• Objective to be a reliable and up-to-date center for real estate information in Thailand

• Currently has 30 employees (see web-site www.reic.or.th)

BIG HOUSING CHALLENGES /ISSUES

1. The big housing challenge is building enough appropriate housing for the low and lower-

middle income urban poor in Thailand.

The Baan Eur Ah-torn project has admirable objectives but it has been difficult achieving its

stated production-goals. Even with zero land costs, developers in Thailand are finding it difficult

to build houses profitably at the designated sale prices that translate into affordable monthly

mortgage payments for the urban poor.

Many private housing developers say that they avoid this market because margins are too thin.

However, more economical alternative construction models are continuously being evaluated.

Many Thai developers are now considering constructing mass-produced housing modules that

can bring costs down to levels that can support the current sale price and yet still yield a

reasonable developers' profit.

2. A second housing challenge is developing the infrastructure and legal mechanisms for

converting slum and squatters rights into legal rights that satisfy all stakeholders. This will be a

long-term Thai policy challenge.

3. The third housing challenging is further developing the secondary home-resale market. Some

studies show that in Thailand, the number of existing homes for sale far exceeds new homes

available for sale. Most existing home sales are by-owner or through so-called amateur brokers.

Further developing the roles of professional real estate brokers and sales agents may be a critical

way to stimulate secondary homes sales.

Currently, no specific real estate broker or sales agent licensing law exists in Thailand and no

government body exclusively regulates real estate brokers and agents. The real estate broker or


agent is generally viewed as a middle man or person who brings buyers and sellers together and

negotiates the sale and/or purchase of real property with the expectation of compensation.

Real estate industry officials have for years lobbied the government to enact Real Estate Broker

and Sales Agent licensing laws, but their efforts so far have fallen on deaf ears.

Another key way to increase secondary home sales is by reducing various income and

transaction taxes on existing-home sales. Recently, the Minister of Finance announced a general

policy to stimulate the secondary home-resale market. These policies are also intended to

enhance the new home market, drive economic growth and improve the Thai general public’s

quality of life.

BIG HOUSING FINANCE CHALLENGES

1. The big housing finance challenge in the long-term will be developing an infrastructure that

will deliver all purchasers the optimal and most appropriate low-cost mortgages available.

On the product side, it means continuous innovations and introducing new products that meet the

changing needs of a fast-developing a young economy. Thailand’s young population will be

buying more and more homes during the next several decades.

2. Policy makers must ensure that the country has a financial and legal infrastructure that can

rapidly adjust to the quick-changing needs of the financial institutions that deliver mortgages to

the country's home buyers. Laws must be continuously up-dated to ensure that foreign capital

can be readily invested in the funding of these institutions as they inevitably grow to service the

mushrooming housing needs of a rapidly expanding young Thai population.


KEY QUESTIONS TO BRING TO BELLAGIO

1. What other appropriate and viable solutions are there for delivering housing to low and

lower-income households?

2. What alternative and appropriate long-term strategies are there for developing an optimal

real estate financing environment for a fast-developing country, such as Thailand, in

transition?


REFERENCES

Asian Coalition for Housing Rights., 2004, Launched Real Estate Projects Report (November

2004)., [Online]. Available: www.achr.net/bmp_2.htm, [2005, Jan7]

Asian Coalition for Housing Rights., 2004, Thailand's Challenge to Solve its Urban Poor

Housing Problem, [Online]. Available: www.achr.net/bmp_3.htm, [2005, Jan7]

Board Of Investment., (1994), BOI’ Housing situation and trend in year 1993-1994, [Online].

Avaliable: www.bot.or.th, [2005, Jan 7]

Boonyabancha, S., 2004, Key Issues in Addressing Urban Poverty, UCDO, ACHR [Online].

Available: http://www.achr.net/networks.htm, [2005, Jan 14]

Boonyabancha, S., June 2004 - Special issue on Baan Mankong [Online], Avaliable:

http://www.codi.or.th/index.php?option=articles&task=viewarticle&artid=211, [2005,

Jan 11]

Kasikorn Research Center, 2004., Thai housing sector expected to maintain steady growth in

2005, [Online], Avaliable: http://www.kasikornresearch.com/index.wcgi [2005, Jan13]

Kritayanavaj, B., (2002), Financing Affordable Homeownership in Thailand: Roles of the

Government Housing Bank Since the Economic Crisis (1997-2002)., 2002 Journal of

Housing Finance International, vol.17, iss.4, pp.15-26.

Nakornthab, D. & Piamchok, S. & Kanchanasai, C., (2004), Bank lending, the housing market

and risks: A test for financial fragility [Online], Available:

(http://www.bot.or.th/bothomepage/databank/EconData/EconFinance/tab88e.asp, [2005,

Jan 5]


National Association of Realtors,2004., Market Situation [Online], Available:

http://www.realtor.orgintlprof.nsf/All/Thailand?OpenDocument, [2005, Jan 11]

National Economic and Social Development Board, 2004., Economic Performance in Q3/2004

and Outlook 2004- 2005 [online] , Available: http://www.nesdb.go.th, [2005,Jan 12]

Northrup, J., 2004, Securitization and Secondary Markets [Online] , Available:

http://www.finir.org/securitization/s_home.htm ,[2005,Jan 14]

Social Security Organisation., 2004 , GHB-SSO Housing program, [Online], Avaliable:

http://www.sso.or.th, [ 2005, Jan 10]

Secondary Mortgage Corparation., 2004, Securitization, [Online], Avaliable:

www.smcthailand.com, [2005, Jan 12]

Thailand property market promising, 2004 ,[Unknown] ,[ Online] , Available:

http://www.thaipro.com/thailand_00/296_thailand-property.htm, [2005, Jan 10]

The Community Organizations Development Institution., 2004, The CODI Update, ISSUE No.4,

June 2004

The National Housing Authority., 2004, Baan Eur Ah-thorn project , [Online], Avaliable:

http://www.nhanet.or.th/eng/aboutnha.html, [2005, Jan 5]


APPENDIX

Table 1 : Key Features of Financial Institutions in Thailand (as of Sep 2004)

Total Assets *

Total Deposits

Total Credits

Home Loans Financial Institutions

Operation began in

(Billion Baht) (Billion Baht) (Billion Baht) (Billion Baht)

Home loans to Total Credits

(%)

Commercial banks 1888 7,728 5,710 5,073 516 10.18

Government Housing Bank 1953 657 561 392 375 95.52

Government Saving Bank 1949 469 284 314 95 30.16

Finance companies 1969 396 260 266 6 2.20

Life insurance companies * 1929 290** 386 44 Na Na

Credit Foncier companies 1969 2 1 1 .2 17.81

Export-Import Bank of Thailand

1993 56 Na 49 Na Na

Small Industries Finance Corporation 1992 34 Na 25 Na Na

Source : Bank of Thailand

Note: *as of September 2004 ** as of Mar 2004 THB 40 = USD 1

Table 2 : Residential Mortgage Loans/ All Types of Loans and the Thai Economy

Items 1990 1995 2000 2002 2003 2004 Q3

Residential Mortgage Outstanding Loans (RL) - billion USD 138 574 689 764 914 1,001

GDP - billion USD 1,979 4,250 4,309 4,623 6,145 6,618

All Types of Loans - billion USD 2,184 4,186 4,917 5,433 5,939 6,501

RL : AL (%) 6.3 13.7 14.0 14.1 15.4 15.4

RL : GDP (%) 7.0 13.5 16.0 16.5 14.9 16.0

Source: Bank of Thailand


Table 3: Baan Mankong: Progress update as of December 2004

Regions Number of Number Number Number Budget approving

Provinces / cities of projects of communities of families (million Baht)

Bangkok & Pheriphery 2/41 38 65 6,437 244.3

Center Region 6/6 19 29 1,740 55.5

Eastern Region

Southern Region 7/8 25 29 1,740 41.7

Northern Region 8/8 18 43 2,679 45.5

Northeastern Region 8/12 28 32 2,407 82

Total 33/55 128 198 14,681 467 Source: the Community Organizations Development Institute (CODI) Table 4: Major GHB’s Source of Funds at Year-end 2004 Amount: Million baht

Item 2001 2002 2003 2004

Amount Borrowers (%)

Amount Borrowers (%)

Amount Borrows (%)

Amount Borrows (%)

1. Deposits & promissory notes

217,209.75 75.06 251,773.76 80.34 298,084.80 84.22 349,778.45 86.04

2. Domestic borrowing

5,300.87 1.83 3,000.00 0.96 6,498.50 1.84 14,405.68 3.54

3. Overseas borrowing

8,871.94 3.07 8,660.68 2.76 8,338.00 2.36 8,329.42 2.06

4. Bonds 58,000.00 20.04 50,000.00 15.94 41,000.00 11.58 34,000 8.36

Total 289,382.56 100.00 313,434.43 100.00 353,921.30 100.00 406,513.55 100.00

Source: The Government Housing Bank


Figure 1 : Proportion of Different Types of Residential Units Completed in 2004

136,104 140,301 138,726

117,937

41,148

17,885 13,964 14,384 16,34231,996 28,03135,150 32,118 28,059 27,418 22,716

15,497 18,064 19,639 17,693 18,598 13,947

79.5 80.4 83.2 81.1

64.4

53.6

43.6 42.348

63.266.7

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 (Q3)0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000Volume : Units

0

20

40

60

80

100%

Self-Built Project-Built Share of Project-Built

Share of Project-Built (%)

17,885 13,964 14,384 16,342

Source : The National Housing Authority; Compiled by Housing Information Division, Housing Information and Research Department, GHB Figure 2 : Residential Units Newly Launched in Bangkok and Periphery during 1992 – 2004

58,497

113,150

253,159

142,023

64,90941,300

1,071 1,357 3,040 6,157 13,187 21,320 21,493

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 20040

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Detached Houses

Town Houses

Condominium

Others

Growth Rate (%)-28.4 93.4 123.7 -43.9 -54.3 -36.4 -97.4 26.7 124.0 102.5 114.2 61.7 0.8

Volume : Units

Source: Bangkok District Officers and adjacent Provincial Offices; Compiled by Housing Information Division, Housing Information and Research Department, GHB


Figure 3 : Outstanding Residential Mortgage Loans during 1988 - 2004 (Sep.)

72,421 100,905 138,002 181,446242,764

333,518443,899

575,211

708,633793,521 769,379

712,402 688,544 687,458763,665

888,4721,001,435

42.9 39.3 36.8 31.5 33.8 37.4 33.1 29.623.2

12.0

-3.0 -7.4 -3.3 -0.2

11.1 16.38.3

19881989

19901991

19921993

19941995

19961997

19981999

20002001

20022003

2004 (Q3)0

400,000

800,000

1,200,000

1,600,000

2,000,000

0.0

50.0

-50.0

-100.0

(%)

Commercial Bank GHB Finance GSB Others Growth Rate (%)

Growth Rate (%)

Volume : Million Baht

Sources: Government Houing Bank and Bank of Thailand; Compiled by Research and Foreign Affairs Division, Housing Information and Research Department, GHB Note: Home loans extended to individual borrowers, not including those extended to developers Other includes the National Housing Authority, credit foncier companies and insurance Figure 4: Market Shares of Outstanding Home Loans during 1988 - 2004 (Sep.)

8.0 8.5 7.3 8.1 7.4 8.4 9.2 9.4 8.83.6 2.9 1.8 1.6 1.4 0.9 0.6 0.6

16.717.2 18.8 19.4 20.2 20.4 21.0 23.5 26.934.0

37.5 38.7 39.3 39.3 38.0 36.9 36.9

67.668.7 69.0 68.9 68.1 67.7 67.1 64.4 61.1 57.2 54.3 53.7 52.5 51.8 52.4 50.4 51.6

19881989

19901991

19921993

19941995

19961997

19981999

20002001

20022003

2004 (Q3).

0.0

20.0

40.0

60.0

80.0 Commercial Bank GHB Finance GSB Others

0.8 0.6 0.20.20.5 0.4 0.3

3.9

0.3 0.7

3.1 3.210.1

5.16.9 2.42.63.34.03.3

4.45.0 2.5 2.2 2.7 2.7 2.4 1.92.4

2.8

10.1

0.8 *

67.6

16.717.2

2.9 1.8 1.6 1.4 0.9 0.6 0.6

3.61.8

7.0


Sources: The National Housing Authority, Credit Foncier companies and Insurance companies, The Government Savings Bank, Bank of Thailand; Compiled by Research and Foreign Affairs Division, Housing Information and Research Department, GHB


Figure 5 : New Residential Mortgage Loans during 1988 - 2004 (Sep.)

40,11053,736 59,368

78,306

111,346

147,829

209,811223,408

241,172

202,720

103,733

64,301

108,886 112,611

164,851

296,661

213,281

73.134.0

10.531.9 42.2 32.8 41.9

6.5 6.8

-15.9-48.8 -38.0

69.3

3.446.5

80.0

19881989

19901991

19921993

19941995

19961997

19981999

20002001

20022003

2004 (Q3)0

100,000

200,000

300,000

400,000

500,000

0.0

100.0

-100.

-200.

-300.

-400.

%

Commercial Banks GHB Finance GSB Others Growth Rate (%)

112,611


Growth Rate (%)

Sources: Bank of Thailand, The Government Housing Bank, The Government Saving Bank, and The National Housing Authority Figure 6 : Market Shares of New Residential Mortgage Loans during 1988 - 2004 (Sep.)

0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 1.2 0.73.4 5.7 6.2 8.1

11.915.7

10.75.7

2.54.9 4.6 3.7 1.7 2.0 2.3 2.8 2.1 3.9 4.5 4.6 4.8 2.4 3.5 1.7

10.8 9.7

2.4 2.8

12.09.6 10.6

8.87.6

3.4

0.6 1.3 1.0 2.0 1.1 0.4 0.3

15.217.4

25.7 22.619.2 19.9 19.2

24.631.9

50.745.9

41.0

30.2 32.637.5

27.6

35.0

68.170.2 66.8 69.965.0

68.7 68.264.2

56.4

43.1 46.1 47.6

57.952.5

47.152.9 52.3

19881989

19901991

19921993

19941995

19961997

19981999

20002001

20022003

2004 (Q3).

0.0

20.0

40.0

60.0

80.0 Commercial Bank GHB Finance Others GSB

***

35.045.9

17.4

0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 1.2 0.7

3.4 5.7 6.2 8.111.9

15.7 10.7

0.6 1.3 1.0 2.0 1.1 0.4 0.3

10.8 9.7 2.4 2.812.0 9.6 10.6 8.8 7.6 3.4

4.82.85.7 2.4

***


Sources: Bank of Thailand, The Government Housing Bank, The Government Saving Bank, and The National Housing Authority, Credit Foncier Companies and Insurance Companies.; Complied by Housing Information Division, Housing Information and Research Department, GHB


Figure 7 : Summary of housing units completed 1976-November 2004

Source: National Housing Authority

Additional Innovative Financing Programs:

1. Micro-Finance Provider - Commercial Organization Development Institutions

(CODI)

• Commercial Banks - urban poor don't qualify as customers

• CODI in Thailand - established 1992

• Establish savings and credit schemes within individual communities

• Funding offered to community or people's organizations

• Allows community to control development process

• More importantly - strengthens bargaining position re: evictions, plans for land

acquisition and control of family finances

• Has become collaborative development mechanism belonging entirely to communities

within the same constituencies - developing group decisions

• CODI heavily involved in Baan Mankong


2. Hire-Purchase Programs

• Introduced 2004

• Low-income individual with no prior credit records to purchase homes

• Occupies home under a hire purchase contract

• Payments of three to five years before house registered as sold

• After proving themselves as credit worthy - becomes purchasers and obtain mortgage

3. Securitization

• GHB to securitize part of its portfolio in 2005

• Diversify funding and portfolio risk

4. Mortgage Default Insurance

• Insurance for risk associated with loans that exceed normal 75 to 80 per cent loan to

value ratios

• Also will support values for future securitization portfolios

• 2002 World Bank-funded feasibility study

• April 2005 - Cooperating with Canada Mortgage Housing Corporation (CMHC) and

International Finance Corporation (IFC) to develop action plan for establishing Mortgage

Default Insurance for Thailand

• Partial Funding from CIDA Inc

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thailand - Joint Center for Housing Studies