Off-plan Condominiums: The End Of Low Deposits?
Sansiri, one of Thailand’s largest property developers, recently announced its decision to increase down payments for its new project condominiums. In fact, this could be the end of extremely convenient payment plans for investors as many other developers may follow the same path.
Indeed, Sansiri decided to increase down payments up to 15% of the total sale price as mortgages rejection rate has doubled in the first half of the year up to 10%.
According to Uthai Uthaisangsuk, Senior Executive Vice President for Business Development and High-Rise Projects, the raise of deposits may affect the low-end segment, as they will have to put more money upfront. However, it would bring over some financial discipline and rigor that will allow buyers to get mortgages more easily from local banks.
Nowadays, it is usual to witness developers offering ridiculously low down payments and sometimes, people only have to pay 1 to 2,000THB a month for the instalments during the construction. When it is time to transfer, a lot of buyers did not get approval regarding their mortgages and end up selling their units at loss or even return them to the developer. This is why a lot of project condominiums are completed but many units remain unsold.
If several developers follow Sansiri, we should definitely see a difference in people’s buying behaviour towards properties here in Thailand.