By SOMLUCK SRIMALEE
According to a survey by The Nation early this week, developers of both low-rise homes such as detached houses and townhouses and high-rise condominiums are currently offering discounts of between Bt500,000 and Bt2.2 million per unit for both ready-to-stay homes and properties at under-construction projects near to the Purple Line route.
For example, Quality Houses early this month discounted the price of units at its Trust Ngam Wong Wan condominium project by Bt500,000, from Bt1.89 million to be Bt1.39 million.
The project is located about 1.2 kilometres from Nonthaburi’s Government Centre station on the Purple Line.
Pieamsuk Development has slashed Bt2.2 million off the 100-square-wah (400 square metres) homes at its detached-housing project close to the rail route, cutting the price from Bt11.9 million to Bt9.7 million per unit.
Major Development currently offers a discount of Bt170,000 at the Manor Sanambinnam condominium, reducing the starting price from Bt1.82 million to Bt1.65 million per unit.
Sammakorn has taken Bt100,000 off the initial asking price of Bt1.5 million for units at its S9 condominium project, which is situated just 100 metres from Bang Rak Yai station.
Meanwhile, other developers are running special promotional campaigns to boost their sales, such as offering free furniture, free transfer fee and free down payment, in packages worth between Bt50,000 and Bt200,000 per customer.
AP (Thailand), for example, is offering free booking fee, free down payment, free furniture and free transfer fee – worth about Bt150,000 combined per unit – to buyers at the Aspire Rattanathibeth 2 condominium, where prices start at Bt1.7 million per unit.
The project is situated about 200 metres from Bang Kra So station on the Purple Line.
“Residential project launches around the Purple Line from Bang Sue to Bang Yai since the start of 2012 comprised more than 50,000 units, of which up to 60 per cent have already been sold and the rest, around 15,000 units, which are ready-to-stay properties, are inventory in the market,” Thai Condominium Association president Prasert Taedullayasatit, who is also Pruksa Real Estate president for |the premium market, told The Nation recently.
“Meanwhile, up to 15,000 units at projects launched last year are undergoing construction for completion either this year or in 2017. This will push the inventory to 30,000 units worth up to Bt100 billion that is waiting to be sold. As a result, most property firms have had to delay further launches in this location,” he said.
High residential stock around the Purple Line route has forced developers to introduce special discounted prices in order to speed up sales in the area, he added.
“The main problem is that demand for buy homes around the Purple Line has been lower than what was estimated five years ago, as the route has not yet been connected with the MRT underground line from Bang Sue to Hua Lum Pong. As a result, most home-buyers have delayed their purchasing decision in this location.
“However, when the routes are connected in the next 12 to 15 months, purchasing demand in the area may well get a boost,” Prasert said.
Meanwhile, the sluggishness of the economy has dented the confidence of home-buyers, while the banks have also severely restricted mortgage approvals for individuals with high personal debt.
These are both additional factors causing residential inventory at projects close to the Purple Line being higher than at other locations in greater Bangkok, he explained.
High mortgage rejection rate
“The mortgage rejection rate was more than 50 per cent in the first nine months of the year for homes priced below Bt3 million per unit,” a commercial-bank source said, adding that the banks had had to tighten their lending criteria due to the repayment-default risk posed by the rising number of individuals with a higher debt level than their earnings.
Surachet Kongcheep, associate director of Colliers International Thailand, said that as of the end of July, the number of registered ready-to-stay condominium units located close to the Purple Line in Nonthaburi province totalled 46,300, up to 50 per cent of which had been transferred to customers, leaving the remainder as inventory in the market.
Origin Property’s chief executive officer, Peerapong Jaroon-Ek, said that with a number of property firms delaying the launch of further residential projects around the Purple Line due to the current inventory level, the price of land in the area would for the time being remain in the region of Bt250,000 to Bt300,000 per square wah.
Land prices have, however, doubled in the area over the past five years, he said.