Condo Units Not Transferred Due To LTV Rules, Are Put Up For Sale Again By Developers
Many developers are now reselling units that were originally booked and down payments paid but because prospective customers could not secure bank loans due to the LTV measures in place, many of these units were taken back. Around 40 percent of prospective buyers were affected and some did manage to get back their down payments while many lost them.
For homebuyers looking for lucrative deals, this might be the time to invest when many property firms are launching special promotion campaigns.However many prospective buyers observed that many greedy developers were not event discounting these units and many were actually inflating the prices and selling them at prices that were higher than when they originally launched.
A number of property firms have launched recently launched online campaigns and even special sale events to resell residential projects that had already been sold to customers who had to back out because they could not get loan approval from commercial banks. For example, Ananda Development Plc launched its latest campaign to sell condominium units priced at between Bt1.29 million and Bt25.9 million per unit, most of which had already been sold. However, the original customers could not go ahead with the transaction as they could not get loans so the company has had to launch a fresh resale campaign. The campaign offers customers 100 per cent loan from commercial banks. (this is if the banks actually lend!) Ananda Development Plc has put residential property worth Bt15 billion, which include both resale and originally unsold inventories, for sale under this campaign.
The Park Land Charan-Pinklao also offers condominium units for resale after the previous buyers pulled out. The company is offering free transfer fee and buyers will get 100 per cent of loan-to-residential value. The residence offers units that are starting at a price of Bt2.27 million per unit.
Sena Development Plc’s deputy CEO, Kessara Thanyalakpark commented in a phone interview with Thailand Condo News said recently “After the LTV measure came into effect, up to 25 per cent of our customers’ loan applications were rejected by commercial banks. We have to resell the units that could not be transferred to customers.”
The Bank of Thailand tightened mortgage regulations this year after it found signs of vulnerability to bad loans in the property sector largely due to the economic conditions in Thailand deteriorating and consumers unable to generate sufficient money and also escalating cost of living, all of which has not been addressed by the government to date.
A source from property firm said that the resale units will go at prices lower than the market price as the property firms had got the down payment from existing customers. This is the reason the resale units are priced lower than the new units, the source explained. “Property firms have to launch their campaigns to speed up their sales in the rest of this year as the property market has continued to drop.”
However, considering that consumer confidence is low and the general economic climate in Thailand is bad with no signs of improvement and with the government measures all failing miserable, its doubtful that even such promotions will work to shore up the property market.