Private developers, which have a stock of low-priced housing on their books and want to develop new residential projects, will benefit from the scheme, he said, adding that other winners include construction-material and home-decoration businesses.

However, major risks remain, Nonarit stressed yesterday.

Some low-income earners may buy houses under the scheme despite not being able to afford them and having no repayment capability, or not thinking thoroughly about the advantages and disadvantages of a home purchase.

The debt-to-service ratio for the income group lacking financial capability could rise to 50 per cent, while the appropriate level is estimated at 20-40 per cent, the TDRI research fellow said.

The main issue that many low-income earners fail to consider in making a home purchase is that they are taking on a long-time debt burden of about 30 years.

They could face unexpected adverse situations in the future, leaving them unable to meet their repayments during an economic downturn, forcing them to relocate and live with relatives, for example he said.

Another group that could find things difficult is the rental segment, which could lose clients, he added.

Economically, “forced” assistance from businesses to purchasers may not have any overall impact, as “producers” – in this instance, the developers – could always pass the burden on to other consumers via higher prices, Nonarit said.

Personally, he said he expected the Baan Pracha Rath policy would have a more positive impact if the government launched measures to provide buyers with knowledge and understanding as a means of preparing them financially and fundamentally for being home-owners.

He also urged the government to consider the design of Baan Pracha Rath homes, ensuring that low- income earners could live in them for the rest of their lives, as most of them would not be able to afford another new home. Meanwhile, as of Tuesday, the number of applications for housing loans under the Baan Pracha Rath project was 51,409, for loans worth Bt51.337 billion.

Some 31,352 people seeking loans worth Bt34.528 billion applied at the Government Savings Bank (GSB), and 20,057 applicants seeking Bt16.809 billion applied at the Government Housing Bank.

“We estimate that 60 to 70 per cent of the total house-lending value is likely to be short-listed for getting the right to borrow under this programme. Meanwhile, the qualified customers are expected to be announced within the next 30 days,” said GSB president Chatchai Payuhanaveechai.

“If the total value for qualified customers is more than the allocated budget of Bt20 billion, we will propose that the bank’s board committee approve increasing the amount to cover the surplus demand. However, if the value is less than what has been allocated, the bank might open a new round of applications for customers who are still interested in the programme,” he added.