With Thai developers struggling to dispose of a massive stock of unsold flats in Bangkok, many of them are trying to lure overseas buyers with huge discounts and bargains to whittle down the inventory and get the struggling sector back on its footing.

Bangkok-listed Sansiri, one of the top three developers in the Southeast Asian nation, is marketing units as small as 231 square feet (21.5 sq metre) starting at HK$500,000 (US$64,394) to buyers from Hong Kong - a size they are familiar with but at a fraction of prices in the world's most expensive property market.

The developer said it was targeting first-time Thai buyers and foreign investors looking for affordable flats in the capital with the Muve Ram22 development. It is Sansiri's latest in the Muve series in Ramkhamhaeng on the periphery of the city's central business district.

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The project is billed as the cheapest in Bangkok - at the equivalent of HK$2,100 per square foot, it is about a third of the typical cost in the Thai capital and less than a tenth of a comparable flat in Hong Kong. Flats in The Pavilia Farm in Hong Kong's Tai Wai district cost about HK$24,858 psf.

Over the past five years, Thai developers have launched more than 230,000 flats in Bangkok, including over 60,000 units in 2018, according to property consultancy Colliers. In the last two years, launches have slowed to 20,000 units a year as developers look to reduce the high inventory levels.

Amid the oversupply and travel restrictions due to the Covid-19 pandemic, many developers have been continuously using promotions and discounts to sell flats and boost cashflows. Current promotions for property purchases include up to 50 per cent discounts, vouchers for luxury hotel stays, referral fees, move-in-now, pay-later, and fully furnished flats, according to Savills Thailand.

Hong Kong-based Golden Emperor Properties is marketing 55 of the 254 one-bedroom units in Muve Ram 22 to Hongkongers. The project is expected to be completed in May 2023. Buyers are only required to pay a 15 per cent down payment, with another 15 per cent due within six months of booking and the rest on completion.

"Hong Kong is our key market and we have successfully sold over 35 projects and over 1,000 units [to Hongkongers]," said Praiya Bunnag, vice-president for international business development at Sansiri.

In the past nine years, foreign buyers accounted for 9 per cent of all flat sales in Thailand, with Chinese buyers, including Hongkongers, accounting for 60 per cent of sales, according to Colliers.

"There is a [glut] of [flats] in some areas, but last year [when the Covid-19 pandemic broke out] we did not launch any new projects or developments," Praiya said. "And now we see the gap between the products that we have and the demand. We are confident that we will sell out this project," she added.

The first of the Muve series - the 248-unit Kaset - sold out within two weeks of its launch, according to Kingston Lai, chief executive and founder of Golden Emperor, a real-estate marketing agency based in Sheung Wan.

With developers like Sansiri successfully managing to reduce inventory levels, property analysts were cautiously optimistic about the sector's prospects. They also warned that developers should not rely too heavily on foreign buyers as the resumption of normal travel is still some way off.

"With the unsold inventory gradually declining, the market should see a return to normalcy in the foreseeable future," said Phattarachai Taweewong, director of research at Colliers Thailand. "However, due to the limited demand, developers will still be unable to adjust their selling prices."

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved.

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