Thai property market’s heavy discounts get steeper


A combination of oversupply built up over the past few years, a lack of buyers due to the coronavirus crisis and diminishing faith in Thailand as a reliable investment destination owing to continued political and administrative uncertainties, continues to cripple the Thai property market. This can be seen particularly in former hotspots for foreign buyers such as Bangkok, Phuket, Koh Samui, Pattaya and Hua Hin, but also in second-tier destinations across the country.

While the problems are not new, demand has dropped so significantly that developers have been resorting to drastic discounts in recent weeks to clear stock.

For instance, in Bangkok, more and more billboards are popping up advertising for new and off-plan property with strong discount, cutting asking prices sometimes by several million baht. One developer, Noble Development, has just recently cut its prices for a condo building in the business district of Ploenchit by almost 50 per cent by “resetting it to pre-launch prices” for a sales event in the first week of July.

Another huge development, Ashton Asoke in the central business district with around 800 units on 50 floors by Ananda Development completed in 2017, keeps also sitting on substantial unsold stock and is currently running a promotion with starting prices cut by about two million baht ($63,271), free furniture packages and free transfer fees.

And those are only two examples on a market which saw 65,000 condominiums added only in Bangkok last year, with take-up rates of just 55 per cent. That was even before the coronavirus crisis struck.

Flash sales and heavily discounted short-time promotions

Meanwhile, real estate brokers are resorting to new marketing strategies such as “flash sales” or “Black Friday sales” with heavily discounted prices over a short period of just a day or so. Projects that launched in the fourth quarter of 2019 are offered with further attractive buyer incentives to achieve sales quotas, and older resale properties are also seeing prices drops by about 30 per cent in many cases.

Overall, brand new condos in excellent locations that were previously marketed for an average of 150,000 baht ($4,745) per square meter are now reduced to around 115,000 baht ($3,638) per square meter for a one-bedroom unit, as developers aim to maintain some form of momentum in the market and bring in cash flow for their businesses.

In that situation, the Thai government on June 4 approved a 90-per cent reduction in the land and building tax for this year to help businesses and the public cope with economic disruption from the virus pandemic.

Legal issues for property owners and buyers during the virus crisis

The coronavirus pandemic has also brought a number of legal questions for Thai property owners and buyers to the forefront, according to Sirichot Chaiyachot, attorney at Bangkok-based law firm Siam Legal.

These include developers halting constructions for developments for which buyers have already made a down payment due to a lack of working capital, thus violating sale and purchase agreements.  Problems arise particularly when developers stop responding to client requests on the issue or disappear from the market altogether, which is not an all too rare occurrence in Thailand, or declare bankruptcy.

“As soon as developers stop responding for more than a month or fail to complete the project within the due date as specified in the sale and purchase agreement, buyers should contact lawyers urgently,” Sirichot says.

Other issues arise when developers are unable to provide payment for rental returns to which they are contractually bound due to a lack of cash flow from empty stock. In the case of the virus pandemic, most would cite force majeure or government order to get away from their liabilities.

“Whether or not an event such as Covid-19 qualifies as force majeure is determined on a case-by-case basis with regard to the terms of the particular contract, the applicable law and other relevant facts,” Sirichot states, recommending owners to get legal advice.

A combination of oversupply built up over the past few years, a lack of buyers due to the coronavirus crisis and diminishing faith in Thailand as a reliable investment destination owing to continued political and administrative uncertainties, continues to cripple the Thai property market. This can be seen particularly in former hotspots for foreign buyers such as Bangkok, Phuket, Koh Samui, Pattaya and Hua Hin, but also in second-tier destinations across the country. While the problems are not new, demand has dropped so significantly that developers have been resorting to drastic discounts in recent weeks to clear stock. For instance,...


A combination of oversupply built up over the past few years, a lack of buyers due to the coronavirus crisis and diminishing faith in Thailand as a reliable investment destination owing to continued political and administrative uncertainties, continues to cripple the Thai property market. This can be seen particularly in former hotspots for foreign buyers such as Bangkok, Phuket, Koh Samui, Pattaya and Hua Hin, but also in second-tier destinations across the country.

While the problems are not new, demand has dropped so significantly that developers have been resorting to drastic discounts in recent weeks to clear stock.

For instance, in Bangkok, more and more billboards are popping up advertising for new and off-plan property with strong discount, cutting asking prices sometimes by several million baht. One developer, Noble Development, has just recently cut its prices for a condo building in the business district of Ploenchit by almost 50 per cent by “resetting it to pre-launch prices” for a sales event in the first week of July.

Another huge development, Ashton Asoke in the central business district with around 800 units on 50 floors by Ananda Development completed in 2017, keeps also sitting on substantial unsold stock and is currently running a promotion with starting prices cut by about two million baht ($63,271), free furniture packages and free transfer fees.

And those are only two examples on a market which saw 65,000 condominiums added only in Bangkok last year, with take-up rates of just 55 per cent. That was even before the coronavirus crisis struck.

Flash sales and heavily discounted short-time promotions

Meanwhile, real estate brokers are resorting to new marketing strategies such as “flash sales” or “Black Friday sales” with heavily discounted prices over a short period of just a day or so. Projects that launched in the fourth quarter of 2019 are offered with further attractive buyer incentives to achieve sales quotas, and older resale properties are also seeing prices drops by about 30 per cent in many cases.

Overall, brand new condos in excellent locations that were previously marketed for an average of 150,000 baht ($4,745) per square meter are now reduced to around 115,000 baht ($3,638) per square meter for a one-bedroom unit, as developers aim to maintain some form of momentum in the market and bring in cash flow for their businesses.

In that situation, the Thai government on June 4 approved a 90-per cent reduction in the land and building tax for this year to help businesses and the public cope with economic disruption from the virus pandemic.

Legal issues for property owners and buyers during the virus crisis

The coronavirus pandemic has also brought a number of legal questions for Thai property owners and buyers to the forefront, according to Sirichot Chaiyachot, attorney at Bangkok-based law firm Siam Legal.

These include developers halting constructions for developments for which buyers have already made a down payment due to a lack of working capital, thus violating sale and purchase agreements.  Problems arise particularly when developers stop responding to client requests on the issue or disappear from the market altogether, which is not an all too rare occurrence in Thailand, or declare bankruptcy.

“As soon as developers stop responding for more than a month or fail to complete the project within the due date as specified in the sale and purchase agreement, buyers should contact lawyers urgently,” Sirichot says.

Other issues arise when developers are unable to provide payment for rental returns to which they are contractually bound due to a lack of cash flow from empty stock. In the case of the virus pandemic, most would cite force majeure or government order to get away from their liabilities.

“Whether or not an event such as Covid-19 qualifies as force majeure is determined on a case-by-case basis with regard to the terms of the particular contract, the applicable law and other relevant facts,” Sirichot states, recommending owners to get legal advice.

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