Developers run aggressive campaigns

“Stay before paying monthly instalments” and “rent before buying” are popular campaign messages that many property firms are currently offering to customers in the hope of speeding up decision-making and reducing their own inventory.
For example, LPN Development has a marketing campaign for those customers interested in buying a unit at its condominium project, Lumpini Township Rangsit-Klong 1, but who have insufficient cash to get a bank approval for a mortgage.
The developer is giving potential home-buyers in this category the opportunity to rent a condominium for the first year, with the amount paid then going towards a down payment on the property when applying for a mortgage.
Pruksa Real Estate has launched a “Free to stay in the first year” promotion for its nine residential projects under the Pruksa Ville brand.
Property Perfect, meanwhile, has collaborated with commercial banks to offer a zero-interest deal for the first year, with customers paying just a monthly instalment of Bt3,000 per Bt1 million of loan for the first year, and no transfer charges needing to be paid for a home.
AP (Thailand) has the “Amazing 5 of Baan Klang Muang” promotion, offering a special fixed interest rate of 3.5 per cent for the first five years of a mortgage at the project.
Sansiri, in collaboration with Bangkok Bank, has the “555 Like” campaign, under which home-buyers pay monthly instalments of Bt555 for the first year of a mortgage.
Another listed developer, Ananda Development, has the “Live Now by Ananda” promotion, under which buyers benefit from free transfer and mortgage fees – akin to the government’s measure that expired on April 30.
The various campaigns, all of which expire at the end of this month, are part of the leading developers’ efforts to boost their second-quarter sales following the end of the government’s stimulus package for the property sector.
“We are offering a rental campaign for the first year before buying a unit at our Lumpini Township Rangsit-Klong 1 project, as a number of potential customers were unable to get bank approval for a mortgage.
“As a result, we offer them a rental deal of between Bt2,000 and Bt4,000 per month for the first year. After they pay the rent for a year, we will transfer the rental amount as a down payment, then they can apply to get a loan from the bank,” LPN Development managing director Opas Sripayak explained. This is also a way to reduce the company’s stock at the project, where 5,000 of the 7,500 units are still available, he added.
AP (Thailand)’s chief of business unit & strategic marketing, Vittakarn Chandavimol, said residential demand in the current quarter had slowed after the government’s fees measure expired, as most home-buyers had taken the plunge and committed themselves to buying before the April 30 deadline.
This had forced most property firms to launch marketing campaigns in a bid to increase sales in the remaining months of the second quarter, he said, adding, “This [with the promotions now on offer] is a good time to buy a home.”

Q2 drop in profits possible
Land & Houses’ chief executive officer, Anant Asawabhokhin, said residential developers could experience a drop in net earnings this quarter as a result of the campaigns they had felt it necessary to introduce to boost sales following the end of the government’s stimulus package.
“There will, however, be more of an impact on small and medium-sized property firms than on the market leaders, as the smaller companies have less cash to compete with the same sort of marketing campaigns, which offer discounted prices and fee exemptions for customers,” he explained.
Prasert Taedullayasatit, president of the Thai Condominium Association and also president for premium products at Pruksa Real Estate, reiterated the view among developers that the raft of special marketing campaigns had been launched to reduce their inventory and boost second-quarter sales following the drop-off in demand after April 30.
According to a survey by the Real Estate Information Centre (REIC) of the Government Housing Bank, ready-for-sale residential inventory in Bangkok and its suburbs totalled 138,400 units worth Bt527.95 billion as of end-April.
Some 78,500 units worth Bt345.5 billion were detached housing, townhouses and shop houses, while 59,900 units worth Bt182.45 billion were in condominiums.
Meanwhile, new residential projects launched in the first four months of the year comprised 23,714 units, down 22.14 per cent from new-project units in the same period last year, the centre reported. REIC director-general Samma Kitsin said a large amount of residential demand had been absorbed from the market between October 28, when the government’s measure came into effect, and April 28.
A total of 131,500 units were transferred in the period, 68,500 of them low-rise homes, and 63,000 of them in condominiums.
As a result, residential demand in the second quarter has been lower than in the first three months of the year.
“This has forced property firms to launch marketing campaigns in an effort to boost sales in the second quarter,” he said.