PROPERTY

Homes for the masses

Kanana Katharangsiporn

The Baan Ua-arthorn project has been accelerated to meet demand.

THE BAAN Ua-arthorn low-cost housing programme, pioneered by the Thaksin government to win support from the working poor, is also aimed at driving growth in the low-end residential market.

By reviving the construction industry in all segments, related industries in the business of producing raw materials and furniture would also benefit.

When it was first introduced, the Baan Ua-arthorn scheme got a big thumbs-up from ordinary people and academics, who said it would offer greater stability in the lives of low-income families as well as offer them a future source of collateral.

The programme promised one million houses by 2007 for the nation's poor.

The National Housing Authority was assigned to handle the construction of 600,000 units nationwide. The other 400,000 units would be funded by soft loans for those who wanted to build houses on their own land.

Under the NHA programme, the Baan Ua-arthorn project has been divided into six phases. Deals for the first two phases, with a total of 50 projects and 11,727 units, have been signed with contractors and represent a total investment of 4.6 billion baht.

The NHA delivered 112 units in its Rangsit Klong 3 development in August 2003, and the remaining 365 units in May of this year. The third phase, to consist of 140,000 units with a budget of 66 billion baht, got under way this year.

The fourth to sixth phases, starting next year, would involve 450,000 units built with an investment of 222 billion baht in state funds.

Buyer demand for homes in the first two phases was overwhelming, with thousands of people queueing up to apply for units.

The first lot of bookings was for 4,175 units, of which 3,535 were in Bangkok and 640 in the provinces.

There are two housing types in the programme: condominiums and two-storey houses. Condo units will have between 24 and 33 square metres of usable space and cost between 250,000 and 390,000 baht, while two-storey houses on 20 square wah are priced at 390,000 baht.

Buyers can obtain home mortgages from the Government Savings Bank and the Government Housing Bank with monthly payments as low as 1,000 to 1,500 baht.

With even the poorest of the working poor able to afford such low monthly payments, the government has moved to speed up the project from five to three years.

The NHA may not be able to meet the new target of 600,000 units by 2006, with 140,000 housing units still to be built this year in the project's third phase.

According to NHA governor Chuanpit Chai-muanwong, the bidding period wasted too much time _ up to four months. To accelerate the process, the authority has adjusted its implementation strategy to include turnkey contracting. This allows developers who already own land to submit proposals. "Outsourcing can help us achieve the target. The first outsourced project was in Pathum Thani, followed by Rojana City in Ayutthaya," she said.

Currently, construction of some 60,000 units will begin once government cheques arrive. About 35,000 of those units are to be developed on land owned by the NHA and its partners, while the remaining 25,000 are to be built by contractors.

"Besides the budget delays, it is very difficult to find contractors to develop low-cost housing units as the cost of construction materials keeps going up," she said.

A 15% deposit guarantee for contractors would help the turnkey projects get started.