Thai developers with projects located close to the Purple Line from Bang Sue to Bang Yai have been forced to offer discounts of up to THB2.2 million per unit in an attempt to reduce an estimated market oversupply of some 30,000 homes in the area, local media reported.
A survey by The Nation revealed developers of low-rise homes and high-rise condominiums are currently offering significant discounts for both ready-to-stay homes and properties at under-construction projects near the Purple Line route.
“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 percent 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 explained to the newspaper. “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 TH100 billion that is waiting to be sold.”
This glut of units located along the Purple Line has forced developers to take action in order to speed up sales. However, the underperforming economy has seen the confidence of homebuyers wane while the banks are still wary of approving mortgages for individuals with high personal debt. This, coupled with some planning issues, has made it tough for developers to unload units.
“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, Prasert stated. “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.”
