One developer’s decision last week to raise down payments on its new condominiums to 15 percent could herald the end of super-low deposits and easy payment plans for new condo buyers.
Sansiri opted to increase down payments after seeing mortgage rejection rates double to 10 percent in the first six months of the year.
They are unlikely to be the only ones.
Speaking to the media last week Uthai Uthaisangsuk, Senior Executive Vice President for Business Development and High-Rise Projects, said the higher down payment might affect the low-end segment however it would ultimately help buyers obtain a mortgage by improving their financial discipline.
Just 12 months ago it was not unusual to see Thai developers offering miniscule deposit marketing gimmicks to off-plan buyers that would see them paying, in some cases, less than THB1,000 per month during the construction phases – and giving them plenty of time to either flip their property, raise cash or obtain mortgage financing.
Buyers who took advantage of these deals are likely to be the ones that struggle most to obtain financing upon completion of their property, and are the ones opting to break their contracts and return their units to the developer, losing whatever money they had paid.
With banks tightening their lending criteria developers could well be left with a significant number of completed but unsold units on their hands.
How many? Only time will tell.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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If you have a news story or comment for publication about Thailand property or real estate email: andrew@propertyguru.com.sg