SENA Tackles High Interest Rates and Difficult Borrowing - Partners with New Businesses to Unlock All Limitations for Aspiring Homeowners

SENA has teamed up with a new business in its network, “Ngern Sod Jai Dee” to provide a new solution for the major challenge faced by those wanting to own a home. The company points out that customers are struggling with the aftermath of the COVID crisis, economic slowdown, inflation, rising interest rates, and increased living costs, which are leading to a decline in homebuyers and ongoing difficulties in securing loans in the future. Recently, 12 pilot projects under “SENA Kith” have joined a campaign for quality condos in prime locations that are ready to move in.

Assoc. Prof. Dr. Kesara Thanyalakphak, Managing Director of SENA Development Public Company Limited stated that the ongoing COVID crisis has now entered its fourth year and has had a widespread impact, with many Thais facing financial difficulties and burdens from housing loans. This is partly due to the economic conditions characterized by inflation, rising interest rates, and increased living costs, which have significantly reduced consumers' ability to purchase housing.

At the same time, the Monetary Policy Committee (MPC) has decided to raise the policy interest rate by 0.25% per year, from 1.50% to 1.75% per year. The increase in interest rates is a negative factor affecting the real estate sector, as it reduces consumers' purchasing power. Home prices are rising while interest rates increase, creating a mismatch for those still recovering, making it harder to buy homes or secure loans. The rate of loan rejections is also expected to rise, compounded by high household debt, indicating that the real estate market this year is not as bright as anticipated.

Financial institutions have tightened their lending measures, making it increasingly difficult to secure loans, which has led to a rising rate of loan rejections. This has become a significant problem, especially in certain areas where rejection rates exceed 50%. Purchasing homes priced between 1-2 million baht and 3-5 million baht is particularly challenging for salaried individuals, who often have other debts, such as car loans or credit card debts from purchasing consumer goods. However, the issue of being unable to secure a home loan is not solely about individuals not saving enough or lacking financial discipline; it is also rooted in the structural economic problems of the country and the global economic situation that has accumulated over time.

In the past, SENA has aggressively targeted the low-cost condominium segment through the “SENA Kith” brand. The “customer group” has shown that those with limited incomes can afford monthly payments of 3,000 to 4,000 baht, but almost everyone already has existing debts. The loan rejection rate is very high without proper screening by sales staff before submitting loan applications to banks. Previously, SENA recognized that customers in this group want homes but lack savings and financial planning, making it difficult for many to secure home loans. Some are unable to access funding sources to buy homes. Young people, especially Gen Z, are struggling to accumulate wealth as the growth of currency does not match the cost of goods. These various issues affect those wanting to purchase housing. Therefore, SENA has sought ways to help solve these problems for customers wishing to buy homes.

Recently, SENA launched a new business under the name “Ngern Sod Jai Dee” as a new option for those wanting to own a home but lacking financial liquidity or facing various issues. This service provides options for customers who may struggle to secure home loans, including: 1. Hire purchase loans to allow immediate occupancy in homes/condos, followed by gradual loan repayments that continuously reduce the principal until it reaches a level where customers can apply for home loans from banks, transitioning them into regular home loan repayment systems; 2. Loans for contract payments; 3. Low-interest loans to reduce interest burdens, etc.