Visitors check out a model of a condo project at the House and Condo Show held at Queen Sirikit National Convention Center in March.

The government is being advised to offer 20-year fixed-rate mortgages to help low-income individuals access lending, addressing an obstacle for many Thais who want to own a home.

Kessara Thanyalakpark, managing director of listed developer Sena Development, said Thailand could adopt Japan's mortgage packaging to facilitate access for lower-income homebuyers, targeting vulnerable consumers.

For instance, individuals earning around 10,000 baht per month who are purchasing homes priced at 1.5 million baht or less per unit could benefit from such a scheme, said Ms Kessara. The monthly instalment for this loan package would average around 3,000 baht, she said.

Japan's long-term fixed-rate mortgage model features a 30-year loan maturity, with a fixed rate for the first 20 years and a floating rate for the last 10. This package is targeted at vulnerable homebuyers and receives financial support from the government through dedicated financial institutions.

Ms Kessara said slow economic growth and stagnant income levels have made it increasingly difficult for Thais to secure mortgages to buy homes. The loan rejection rate for Sena's residential projects has risen significantly, now averaging 60-70%, compared with 30-40% previously, she said.

Loan rejections stem from both financial institutions and the loan applicants themselves, said Ms Kessara.

Banks reject loan applicants because of borrowers' weak debt repayment capacity, largely attributed to a slowing economy and the widening gap between people's income growth and rising house prices.

Over the past few years, consumer income growth has averaged around 1%, while house prices have increased by 6-7%, attributed to higher operating costs, especially for raw materials, she said.

"Some applicants refuse loans even after approval because they lack confidence in the country's economy and are reluctant to take on long-term debt commitments of 20 to 30 years," said Ms Kessara.

Regarding the new government's economic policy focusing on household debt solutions, she said this mortgage option should be a priority, including for both formal and informal loans, as it affects home ownership.

"If the Bank of Thailand begins to cut its policy rate in December, as the market anticipates, it could partially support homebuyer demand. However, mortgage interest rates remain a critical factor in enabling access to financial products for homebuyers," said Ms Kessara. "Typically the property industry -- both new project investments by developers and mortgages -- is closely tied to interest rates."