Developers launch resale campaigns after homebuyers stranded by LTV curbs

[webfact]

Developers launch resale campaigns after homebuyers stranded by LTV curbs

By Somluck Srimalee
The Nation

 

Ashton by Ananda Development

 

For homebuyers looking for lucrative deals, this might be the time to invest when many property firms are launching special promotion campaigns to sell residential projects that could not be transferred to previous customers who could not get loans due to the new loan-to-value (LTV) regulations.

 

According to a Nation survey, a number of property firms have launched campaigns 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.

 

Ananda Development Plc has put residential property worth Bt15 billion for sale under this campaign.

 

The Park Land Charan-Pinklow 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 a starting price of Bt2.27 million per unit.

 

“After the LTV measure came into effect, up to 20 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 again,” Sena Development Plc’s deputy chief executive officer, Kessara Thanyalakpark, said recently.

The Bank of Thailand tightened mortgage regulations this year after it found signs of vulnerability to bad loans in the property sector.  

 

A source from property firm said that the resale units will offer a price lower than the market price as the property firm 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 when the property market has continued to drop,” the source said.

 

Source: https://www.nationthailand.com/property/30376536

 

-- © Copyright The Nation Thailand 2019-09-23

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[Airalee]

23 minutes ago, webfact said:

The campaign offers customers 100 per cent loan from commercial banks.

Nice to see they are being more conservative with their lending standards. ????

 

24 minutes ago, webfact said:

The Park Land Charan-Pinklow 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 a starting price of Bt2.27 million per unit.

Another developer with nice conservative lending standards.  Nice to see the buyers need to have some skin in the game. ????  Starting price of ฿2,270,000..... wait....what?  Hip flat had them listed at ฿1,880,000 already...

 

https://www.hipflat.com/listings/bangkok-condo-jnxuqqrg

 

Caveat emptor.

 

 

[Bob12345]

4 hours ago, webfact said:

For homebuyers looking for lucrative deals, this might be the time to invest ...

When a newspaper is telling you about a great deal and "this is the time" you should start running already as all opportunities are long past and this is the garbage being unloaded onto people who have no clue whats going on in the market.

 

[mercman24]

typical, why the hell would anyone, put a deposit on a property with out having their finances in place first, then find out the banks wont lend them 2 million baht on their earnings of 300 baht a day.

[ThePioneer]

6 hours ago, webfact said:

a number of property firms have launched campaigns 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.

Let me correct that for you.

 

a number of property firms have launched campaigns to resell residential projects that had already been sold to customers "investors" who had to back out because they could not get loan approval from commercial banks they could not find someone who wanted to pay over the top.

[Srikcir]

42 minutes ago, mercman24 said:

typical, why the hell would anyone, put a deposit on a property with out having their finances in place first, then find out the banks wont lend them 2 million baht on their earnings of 300 baht a day.

Because previous customers who could not get loans due to the new loan-to-value (LTV) regulations?

If they didn't lock in their loan shortly after making a deposit (likely not refundable), they took the chance of failing to get a loan later.

Perhaps another scenario is the "customer" was a speculator who locked in a low pre-sale price using a deposit with intent to resell for an instant profit. As such no loan was executed. But now prospective buyers are discouraged by the new loan regulations and the speculator has to default on the pre-sale.

[Number 6]

On 9/23/2019 at 9:58 AM, mercman24 said:

typical, why the hell would anyone, put a deposit on a property with out having their finances in place first, then find out the banks wont lend them 2 million baht on their earnings of 300 baht a day.

These are the flippers. It was going sour for them years ago. They couldn't get out and take a bit of a loss. Now theyve lost their down payment entirely lol.

 

Loans - yeah, at 6% or more. Don thin so...

 

Waiving transfer fees. How about I make an offer and you take it or leave it?

 

We can sell lower because we have a down payment. Too funny. Usually those first few payments are just come-on's. Pull the buyer in, lock them in a contract.

 

The hilarious thing is if you click on any developer website it rarely even has floorplans it's just one big swirling mass of stupid imagery and hype. The sites often just crash. There's little to no information and certainly real prices?

 

When condo prices consistently drop 25% I'll think about buying. DDProperty full of total dreamers. Property up for sale for years.

 

I've long since thought that the 2nd hand condos will just stagnate as long as the population doesn't lose their jobs. They're locked in forever but dreaming of better days. Developers are stuck. They have loans coming due, a ton of sh1++y very overpriced condos. No one wants to be first to take the hit but they also won't want to wait to long because there is obviously limited buyers and even more limited interest.

 

[ThomasThBKK]

I hope these masses of dumped will also have effect on second hand older condos here, they are personally the only ones i am interested in buying ...

 

10 years old, easy to renovate, big balcony - not that many on the market for sane prices currently but usually their value for money is way better than the chickenboxes.

[TallGuyJohninBKK]

What I'm trying to follow here is...

 

--If lots of prior would-be buyers weren't able to proceed because the central bank tightened mortgage issuance requirements for the commercial banks...

 

--then how can the developers now be claiming to be offering the units again with 100% commercial bank financing for the new buyers???

 

And if they can get 100% commercial bank financing NOW, then why can't the original buyers proceed with their purchases and not be hindered by the higher LTV requirements!!!

 

 

[Airalee]

 

On 9/27/2019 at 12:43 PM, ThomasThBKK said:

I hope these masses of dumped will also have effect on second hand older condos here, they are personally the only ones i am interested in buying ...

 

10 years old, easy to renovate, big balcony - not that many on the market for sane prices currently but usually their value for money is way better than the chickenboxes.

It would be nice if it worked that way, but usually, developers have a better grasp on where the market currently is (and will be heading) than the average individual homeowner and can adjust their prices accordingly.  Not as much “emotional” investment either.  It’s just a straight numbers game.

 

For example, my 8ish year old building is currently a far worse deal than some developer listed new construction.  I asked my landlord what he thought my unit was worth he quoted me a “value”.  When I pointed out that new, nicer, larger units were for sale in a close by building for a similar price...well...there was no reasoning with him.  And I wasn’t even trying to buy his place...just get an idea of what he thought it was worth.

 

Unless you get lucky and stumble upon that “distressed” seller who really needs to just get out... you soon start to realize that the individual sellers are even more delusional than the developers with regards to what their condos are “worth”

Edited September 29, 2019 by Airalee

[Number 6]

On 9/29/2019 at 1:25 PM, Airalee said:

 

It would be nice if it worked that way, but usually, developers have a better grasp on where the market currently is (and will be heading) than the average individual homeowner and can adjust their prices accordingly.  Not as much “emotional” investment either.  It’s just a straight numbers game.

 

For example, my 8ish year old building is currently a far worse deal than some developer listed new construction.  I asked my landlord what he thought my unit was worth he quoted me a “value”.  When I pointed out that new, nicer, larger units were for sale in a close by building for a similar price...well...there was no reasoning with him.  And I wasn’t even trying to buy his place...just get an idea of what he thought it was worth.

 

Unless you get lucky and stumble upon that “distressed” seller who really needs to just get out... you soon start to realize that the individual sellers are even more delusional than the developers with regards to what their condos are “worth”

 

I totally agree.

 

Owners are locked in. They'd love to move but it's all pie in the sky. Bought overpriced condo and not only looking to pass on that stupidity but to profit from it. My hunch is secondary market will remain stagnant. As long as a recession doesn't hit and people lose their jobs. Then all bets off.

 

The discounts will be on new units. The only trouble is they are so tiny, no balcony, no windows, long not wide, often only one toilet in 5-6m thb condo. The kitchens are ridiculous. Oh the list is endless. But imo that's where the underbelly of the market is. It will take defeat to get these mafia developers to capitulate. 

 

I see massive blocks of empty condos and I just wonder why loans are not called? Supalai Wellington...that thing looks like it's an aging ghost town. A few more years no one will want in but the poor. Even fairly*successful* developments are full of renter's, Chinese.

 

Just simple math will demonstrate what a horrible value these things are. Even at 25++% discount my only interest personally is to leave it to my wife. I'm ok with blowing 15 20k a month. Mobility, choice. Hell, was paying that back in California on a beach flat 20 years ago.

 

What the hell is in a developers mind building shixxy 21sqm condo for 4m baht. It's not even especially close to mass transit. No, the entire thing will implode in time.

 

Finally, we farang will never own homes. Developers will fight that forever to keep the captive market. Could you imagine?

Edited October 2, 2019 by Number 6

[Airalee]

21 minutes ago, Number 6 said:

 

I totally agree.

 

Owners are locked in. They'd love to move but it's all pie in the sky. Bought overpriced condo and not only looking to pass on that stupidity but to profit from it. My hunch is secondary market will remain stagnant. As long as a recession doesn't hit and people lose their jobs. Then all bets off.

 

The discounts will be on new units. The only trouble is they are so tiny, no balcony, no windows, long not wide, often only one toilet in 5-6m thb condo. The kitchens are ridiculous. Oh the list is endless. But imo that's where the underbelly of the market is. It will take defeat to get these mafia developers to capitulate. 

 

I see massive blocks of empty condos and I just wonder why loans are not called? Supalai Wellington...that thing looks like it's an aging ghost town. A few more years no one will want in but the poor. Even fairly*successful* developments are full of renter's, Chinese.

 

Just simple math will demonstrate what a horrible value these things are. Even at 25++% discount my only interest personally is to leave it to my wife. I'm ok with blowing 15 20k a month. Mobility, choice. Hell, was paying that back in California on a beach flat 20 years ago.

 

What the hell is in a developers mind building shixxy 21sqm condo for 4m baht. It's not even especially close to mass transit. No, the entire thing will implode in time.

 

Finally, we farang will never own homes. Developers will fight that forever to keep the captive market. Could you imagine?

The owners are definitely locked in if they are Thai with their no money down teaser rate mortgages.  It makes me wonder if financing is approved based on the introductory rate or at the reset rate.  They’ll probably come up with some sort of BS “save the homedebtor” program (such as HAMP in the US) in order to keep the millstone around the neck of the debt slave.

 

[Number 6]

15 minutes ago, Airalee said:

The owners are definitely locked in if they are Thai with their no money down teaser rate mortgages.  It makes me wonder if financing is approved based on the introductory rate or at the reset rate.  They’ll probably come up with some sort of BS “save the homedebtor” program (such as HAMP in the US) in order to keep the millstone around the neck of the debt slave.

 

Agreed again.

 

And what if the economy does really tumble. Couple that with incoming technology wave. They lose the condo. The bank owns the condo. What Thai in that economic situation can step in? The potential disaster is alarming. In Florida you saw homes going for less 80% of a year or two prior. 80%! Who will pick up that slack. In vast majority of cases these condos absolutely bog standard. Frighteningly small and unappealing but the bank is out on a limb OR the developer.

 

The banks will end up allowing them to stay ..to refinance. Anything. Blocks will become abandoned, no maintenance..

 

I think many of these people rec'd loans through developers as well. Perhaps couldn't even qualify through a bank. Prolly paying extra 1.5% as well lol.

 

When you go on DDProperty and pop up the loan thing it defaults to 6%. Who in their right mind would purchase some crappy second hand condo at these prices AND finance it at 6%?

 

Edited October 2, 2019 by Number 6

[Airalee]

48 minutes ago, Number 6 said:

Agreed again.

 

And what if the economy does really tumble. Couple that with incoming technology wave. They lose the condo. The bank owns the condo. What Thai in that economic situation can step in? The potential disaster is alarming. In Florida you saw homes going for less 80% of a year or two prior. 80%! Who will pick up that slack. In vast majority of cases these condos absolutely bog standard. Frighteningly small and unappealing but the bank is out on a limb OR the developer.

 

The banks will end up allowing them to stay ..to refinance. Anything. Blocks will become abandoned, no maintenance..

 

I think many of these people rec'd loans through developers as well. Perhaps couldn't even qualify through a bank. Prolly paying extra 1.5% as well lol.

 

When you go on DDProperty and pop up the loan thing it defaults to 6%. Who in their right mind would purchase some crappy second hand condo at these prices AND finance it at 6%?

 

I’m pretty sure that any loan that was obtained through the developer was done with a partnering bank in order to offer much looser lending standards than would be the norm.  The big developers will never have their loans called and the gooberment will bail out the banks in a similar fashion as was done in the US.

 

If it wasn’t so dangerous to speak ones mind here, I would have started a housing bubble blog similar to “Housingpanic: The Housing Bubble Blog with an Attitude Problem” years ago.

 

http://housingpanic.blogspot.com/

 

It would also be nice to have a housing “meetup” group where instead of some foreign <deleted> realtard trying to tell us that we need to “buy now or be priced out forever”, we could discuss things such as...

 

1.  Which condos have decent build quality (lol) and which ones are dog****.

 

2.  What is the best (available to foreigners) way to short the market here and profit from people’s stupidity/greed

 

3.  Organize a “group buy” with a developer at a deeeeep discount. 

 

Perhaps even have some fun activities such as dressing up as a group of clowns and mimes and then go point and laugh at people coming out of their condos.  Or just wear sandwich boards outside of sales centers which say “too expensive” (แพงเกินไป)...of course...still in clown suits.

[Airalee]

I wonder, at what point we might currently be on this graphic...

 

 

[tjo o tjim]

Capacity always seems to get absorbed in time... just longer than the people with excess hope. Somebody looses, somebody gains, nature of the beast.
 

Exactly how many real ghost buildings are there in central Bangkok that haven’t been re-developed?  I can think of CK51 and the shell at the end of Suk13 both left from 1997, and maybe one or two along the Airport Link route, but all the miserable idea, who would actually buy here, way too much capacity, white elephant people seem to have been proven wrong over time. Sure, people and companies go bankrupt in the process, but it gets absorbed. 
 

The chicken coups under 30m2 in good locations will become short term rentals.  The places in bad (geographic) locations will become marginally better locations over time. Some places will start to look much shabbier, but they will still be around. 

[Airalee]

5 hours ago, tjo o tjim said:

Capacity always seems to get absorbed in time... just longer than the people with excess hope. Somebody looses, somebody gains, nature of the beast.
 

Exactly how many real ghost buildings are there in central Bangkok that haven’t been re-developed?  I can think of CK51 and the shell at the end of Suk13 both left from 1997, and maybe one or two along the Airport Link route, but all the miserable idea, who would actually buy here, way too much capacity, white elephant people seem to have been proven wrong over time. Sure, people and companies go bankrupt in the process, but it gets absorbed. 
 

The chicken coups under 30m2 in good locations will become short term rentals.  The places in bad (geographic) locations will become marginally better locations over time. Some places will start to look much shabbier, but they will still be around. 

Spoken like a true (r)ealtor

[tjo o tjim]

50 minutes ago, Airalee said:

Spoken like a true (r)ealtor

Heh... no, just someone who never thought all the condos under construction in 2006 would ever be sold. I am curious how many the developers own to keep the market looking solid though. 

[Airalee]

8 minutes ago, tjo o tjim said:

Heh... no, just someone who never thought all the condos under construction in 2006 would ever be sold. I am curious how many the developers own to keep the market looking solid though. 

Everything in your previous post was nothing but positive, hence my comment.  When I see 30-40sqm units asking close to ฿300,000 per square meter, I know that there is no way that the P/E ratio is even close to normal.  These units are being sold primarily for “investment” and I chuckled to myself on the BTS yesterday seeing a sign touting a “Guaranteed 20% return”.  When a unit isn’t rented out, the return is negative (not counting opportunity costs)

 

The bottom line is that prices have to come down.  They’ve been held up with low interest rates, loose lending standards (70% DTI) and hinky mortgages (Neg-am loans were being advertised at BTS stations about 2 years ago). Those will soon reset and recast.  People rushing to buy condos with these terms are the “dumb money”.

 

With Regards to location, there is no guarantee that a good location will stay good, or that a marginal location will get better.  It could just as easily go the other way.  

 

 

[ThomasThBKK]

16 hours ago, Number 6 said:

 

I totally agree.

 

Owners are locked in. They'd love to move but it's all pie in the sky. Bought overpriced condo and not only looking to pass on that stupidity but to profit from it. My hunch is secondary market will remain stagnant. As long as a recession doesn't hit and people lose their jobs. Then all bets off.

 

The discounts will be on new units. The only trouble is they are so tiny, no balcony, no windows, long not wide, often only one toilet in 5-6m thb condo. The kitchens are ridiculous. Oh the list is endless. But imo that's where the underbelly of the market is. It will take defeat to get these mafia developers to capitulate. 

 

I see massive blocks of empty condos and I just wonder why loans are not called? Supalai Wellington...that thing looks like it's an aging ghost town. A few more years no one will want in but the poor. Even fairly*successful* developments are full of renter's, Chinese.

 

Just simple math will demonstrate what a horrible value these things are. Even at 25++% discount my only interest personally is to leave it to my wife. I'm ok with blowing 15 20k a month. Mobility, choice. Hell, was paying that back in California on a beach flat 20 years ago.

 

What the hell is in a developers mind building shixxy 21sqm condo for 4m baht. It's not even especially close to mass transit. No, the entire thing will implode in time.

 

Finally, we farang will never own homes. Developers will fight that forever to keep the captive market. Could you imagine?

 

Supalai is a good example where you can see how the market went wrong somewhere over a decade ago.

 

This is one of the older Supalai condos, it's pretty much full afaik: https://www.hipflat.co.th/en/projects/supalai-place-xenwvq

 

It's so old i don't see it listed anymore on the website, i was looking at some units there few years ago for renovation project.

 

 

 

If you see the picture, all the front facing units have giant balconies/terraces and are at least 70 sqm till 350 sqm in size, they are actually great to live in, walls are thick and you can't hear neigbours, it's a bit far from bts tho. 

 

The big units are like this: 

https://www.hipflat.co.th/en/listings/bangkok-condo-xbucgcxl 

https://www.hipflat.co.th/en/listings/bangkok-condo-ladhrxeu

 

250 sqm internal space, duplex, going for around 20 mio.

 

many of them have a balcony and a big terrace, yeah they are ugly af but interior design can be done easily and relatively cheap.

60k per SQM is the price (listed), can be have way cheaper tho.

 

This is one thats renovated: https://www.hipflat.co.th/en/listings/bangkok-condo-mmxuvjjh

 

 

Nice balcony, 130 SQM for 11 mio THB, real sales price prolly 9 mio - not too bad?

 

 

Now look at the chicken<deleted>box next to it called supalai oriental, same company, SAME LOCATION, it's directly NEXT TO IT:

https://www.hipflat.co.th/en/projects/supalai-oriental-sukhumvit-39-cfethn

 

SQM price is double at least: https://www.hipflat.co.th/en/listings/bangkok-condo-duabofsj , no balconies, absolute horror - and pretty much unsold.

 

 

goddamn wake up developers...

 

 

 

 

 

 

 

 

 

Edited October 3, 2019 by ThomasThBKK

[ThomasThBKK]

15 hours ago, Airalee said:

I’m pretty sure that any loan that was obtained through the developer was done with a partnering bank in order to offer much looser lending standards than would be the norm.  The big developers will never have their loans called and the gooberment will bail out the banks in a similar fashion as was done in the US.

 

If it wasn’t so dangerous to speak ones mind here, I would have started a housing bubble blog similar to “Housingpanic: The Housing Bubble Blog with an Attitude Problem” years ago.

 

http://housingpanic.blogspot.com/

 

It would also be nice to have a housing “meetup” group where instead of some foreign <deleted> realtard trying to tell us that we need to “buy now or be priced out forever”, we could discuss things such as...

 

1.  Which condos have decent build quality (lol) and which ones are dog****.

 

2.  What is the best (available to foreigners) way to short the market here and profit from people’s stupidity/greed

 

3.  Organize a “group buy” with a developer at a deeeeep discount. 

 

Perhaps even have some fun activities such as dressing up as a group of clowns and mimes and then go point and laugh at people coming out of their condos.  Or just wear sandwich boards outside of sales centers which say “too expensive” (แพงเกินไป)...of course...still in clown suits.

1) JLL Property is great quality, i mean in thai standards. You know why? It's not a thai company: https://en.wikipedia.org/wiki/JLL_(company)

   San..... is bad quality, see about all the recent bad reports.

 

2) The best would be to have some kind of reverse REI, not sure that's available here?

   

You might want to go after the big condo developers that are publicly listed instead, but well the thai stock market is quite manipulated imo and markets can stay irrational longer than you can stay liquid.

 

3) That would prolly work if you do it in private, if it's a public thing they don't want to lose face imo.

Edited October 3, 2019 by ThomasThBKK