Homeownership, Mortgage Debt, and Housing Asset

Abstract

Homeownership is an important part of household wealth.  Owning a decent home is the desire of every households, unfortunately a quarter of Thai households do not own home for different reasons.  This paper first reviews the conceptual framework that focuses on homeownership as part of household wealth accumulation over the life-cycle and later on investigates empirical evidences based on the household survey conducted by the National Statistical Office in 2006.  The rates of homeowership were compared between urban- and rural-areas and by different age-cohorts.   A skewed logistic regression was adopted to to estimate the relationships in which homeownership as dependent variable and test against the set of explanatory variables that include  household income, family size, work status, age of household head, regional- and community- dummies.   We takes note the rates of homeownership increases over age of household head which seems to follow a nonlinear pattern; i.e., it rose rapidly before 40 year of age and slowly increased afterward.  Some heads as commonly observed in other countries and consistent the life-cycle hypothesis.  Of note and policy concern is that about 10 percent of aged-household heads do not own home or were living in indecent housing.  The last section discusses housing policy and the role of public sector to intervene in the housing market by providing 200,000 units of low-cost housing and this would require an investment in the range of 60 – 100 billion baht within 3-5 years.  A provision of low-cost housing can be a new role of local administrative organizations.  Recently, the National Decentralization Committee (NDC) made it clear that local governments may play role as a provider of housing — how this would shape the future of housing market especially with respect to the provision of low-cost housing is an interesting topic for further study.