Developers run campaigns to boost sales

“We have had to launch an aggressive marketing drive to boost our sales, as the banks are restricting the approval of mortgages to customers, with the rejection rate for applications now standing at more than 70 per cent,” LPN Development’s managing director, Opas Sripayak, said during a recent interview with The Nation.
LPN Development is seeking to boost third-quarter sales by offering a free-to-stay deal for one year to buyers at its Lumpini Ville Na Klua-Wongamat project, in a campaign running until the end of this month.
The company has also launched the biggest campaign of the year – “Double Shock: Buy Second Unit Get 50% Off” – covering ready-to-stay condominium units at 13 projects with good locations and views that are being put up for sale.
All potential buyers need to do is ask a friend to come and shop with them, and when buying the second unit, they get a 50-per-cent discount.
The campaign, which is already under way, is expected to boost demand for ready-to-move-in units with affordable prices, he said.
Meanwhile, for LPN’s Lumpini Township Rangsit Klong 1 project, the developer is offering a rental deal for the first year, with the rent paid being used as down payment for condominiums priced at Bt700,000 per unit.
The campaign will continue until all units at the project are sold.
“All of our marketing campaigns are aimed at selling our inventory at a time of high competition coupled with the banks restricting mortgage approvals to customers,” Opas explained.
Quality Houses has also launched a special promotion, “Free to Stay One Year”, for home-buyers snapping up a unit at any of its 30 residential projects nationwide, in a campaign running until the end of the month.
Home-buyers also benefit from free transfer and mortgage fees when making a purchase under the campaign.
Pruksa Real Estate, meanwhile, has introduced the “Pruksa Non Stop” campaign, under which it offers free mortgage and transfer fees, discounted prices and other goodies, depending on the project.
The campaign, which applies to all of its 116 residential projects around the country, also runs until the end of September.

High rejection rate
Pruksa’s co-chief executive officer, Lersak Chuladesa, said the company had decided to launch its special promotional drive to reduce the cost of homes for customers during a period when the country’s commercial banks were being increasingly stringent in approving mortgages.
“Our customers have been faced with a mortgage-application rejection that has risen from an average of 5 per cent at the end of last year to 7 per cent during the first half of this year. This has impacted on our sales this year,” he said.
Meanwhile, the company has a policy to pre-approve its customers before they apply for a home loan.
Up to 25 per cent of customers applying for pre-approval have been rejected by the company because they have high debt and insufficient income, he added.
“High household debt is the main problem for people wanting to buy at this time, as a result of which most residential developers have had to launch special campaigns and shift their customer target from the lower-income segment to the middle- and upper-income market,” the co-CEO explained.
Pruksa Real Estate currently focuses on home-buyers with earnings averaging between Bt50,000 and Bt100,000 per month, which gives them the purchasing power to buy a home costing Bt3 million to Bt5 million, the company’s president for value products, Piya Prayong, said.
Reuters reported recently that for all of Thailand’s efforts to make it easier for low-income earners to buy their own home, state employee Nattawut Khampak was braced for another knock-back from the same bank that turned down his mortgage application two months ago.
Living with his wife, son and parents, plus his brother’s family in an overcrowded wood-and-concrete house in a modest Bangkok suburb, the 36-year-old clerical worker has natural reasons to keep trying for a home loan, the report said.
“I want to have my own home and have more kids,” Nattawut told Reuters.
“It’s not easy to get one these days as the economy is bad.”
His tale of rejection is commonplace, regardless of a government scheme that includes state banks offering relaxed mortgage conditions for the low paid.
Thai households are among the most indebted in Southeast Asia, and the country’s banks are rejecting around half of mortgage applications, the news agency reported.
Rural applicants who have seen incomes fall due to the global slump in agricultural commodity food prices have been particularly affected, according to Kasikornbank executive Alongkot Boonmasuk, who spoke to Reuters.
The country’s fourth-largest bank turns down around 50 per cent of mortgage applications from “walk-in customers or those in the provinces, who have been affected by high debts or low farm prices”, he said.
CIMB Thai Bank has also tightened its lending criteria, bank executive Onanong Udomkantrong told Reuters.
“Our bank will try to help clients get a house, but we also have to look at their ability to service debt,” she said.
LPN Development’s Opas added that commercial banks and state-owned banks both restricted the provision of home loans to customers, which he said was the main reason that the property market in the current quarter was proving a hard time for property developers to boost their sales.