BoT prompts Sansiri away from marketing
Focus on 'real demand' in light of LTV limits
SET-listed developer Sansiri Plc will tone down marketing for new condo launches to focus on real demand, in response to the Bank of Thailand's new measures on loan-to-value (LTV) limits announced last Friday.
Poomipak Julmanichoti, executive vice-president for condo project development, said the company's presale launches of new condo projects will be not as aggressive as previously carried out because it wants to emphasise real buyers, not investors.
"The condo market in 2019 will shift more to real demand, while speculators or investors will fade away," he said. "Key factors will be the central bank's new measures on LTV limits and the impact of the economy."
Last Friday the central bank announced it will require homebuyers who purchase a residential unit priced lower than 10 million baht and seek a second home loan to make a down payment of at least 10% if they have made payments on the first mortgage for three years or longer.
The minimum down payment requirement will be raised to 20% if borrowers have serviced the first mortgage for less than three years.
For those who seek a second mortgage to fund the purchase of a home priced at 10 million baht or higher a minimum 20% down payment is required.
Those who apply for third and subsequent mortgages will be subject to a minimum 30% down payment, regardless of home price.
The LTV ratio of 90-100% remains unchanged for those who apply for a first mortgage to buy a home priced below 10 million baht, but the ratio will be lowered to 80% when a borrower buys a residence valued at 10 million baht or higher.
The effective date has been pushed back four months to next April 1.
"Presale launches of our new condo projects from this month will have the same model we have used previously," said Mr Poomipak. "Sales offices will be smaller and presales targets will be lower as we target real buyers."
Earlier buyers who wanted to buy a unit for their own use were unable to compete with investors or speculators to book condo units as Sansiri used marketing to boost sales during the launch period.
He said real buyers in Sansiri's condo projects usually account for 60% of purchases while 40% are investors. Next year real buyers will rise to 80% while the latter will drop to 20%.
On Saturday Sansiri plans to launch a new condo project, the Line Phahonyothin Park, worth 4.9 billion baht, which is to be its last new condo being launched in Bangkok this year. The company aims to have 40% of units sold early next year.
The project will be a joint venture between Sansiri and BTS Group Holdings Plc, located on a two-rai site behind Tesco Lotus Lat Phrao. The plot is situated by a suspended building, owned by BTS Group, that is 100% completed.
Sansiri will demolish the building and build a new one with 32 storeys and 881 units.
SIRI shares closed unchanged yesterday on the Stock Exchange of Thailand at 1.52 baht in trade worth 57.3 million baht.