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Campaigns effectively lower prices

The Nation February 12, 2009 Direct cuts would be unfair to earlier buyers, hence the discount, give-away free-for-all Lower demand in the property market is having the expected effect: developers are offering discounts, free furniture and home appliances - even overseas trips for new home-buyers - effectively slashing the prices of new homes. A survey by The Nation early this week found a wide range of marketing campaigns, directly persuading buyers while indirectly cutting prices. Some developers are simply cutting prices without all the window dressing, particularly at projects built over the past two or three years, but which still have houses listed on unsold inventory. For example, MK Real Estate Development has launched what it calls its Chua Chuan Plus Plus offer of price discounts and free furniture and home appliances worth between Bt200,000 and Bt1.5 million per unit. Customers who buy its residences will also take part in a lucky draw for a Toyota Camry worth Bt1.19 million. Supalai is also offering price discounts between Bt1 million and Bt1.5 million per unit for home-buyers who decide to buy at its existing detached house projects such as Supalai Buri Klong 4 and Supalai Orchid Park Watcharapong. Sansiri is offering free furniture and gift vouchers for furniture worth between Bt200,000 and Bt500,000 per unit and Lalin Property is offering price discounts of up to Bt200,000 per unit. MK Real Estate Development's assistant managing director Chutima Tangmatitham said that after launching the Chua Chuan Plus Plus offer last month her company received positive feedback from customers. As a result, it has more marketing campaigns in the pipeline, aimed at boosting sales. "We are not directly offering discount prices to new customers because that would not be fair to existing home-buyers. We are offering special promotions of free furniture and home appliances that will maintain the prices paid by existing customers but also challenge new customers," she said. Preuksa Real Estate's chief operations officer Prasert Taedulsathit said his company's business strategy this year included marketing campaigns offering free furniture and free transfer fees, to tempt customers to buy. At the same time, the company will launch a new series of home designs with reasonable prices that may be lower than those at existing projects. This move is also a part of Preuksa's efforts to reach a sales target of Bt18 billion in 2009, he said. "We believe that most property developers will launch marketing campaigns with a direct impact on home-buyers, to speed up their decision-making process. Construction costs this year will also be lower than in 2008, so residential prices will be 5 or 10 per cent lower than those last year, depending on the location," he said. Earlier this week, Agency for Real Estate Affairs' managing director Wasan Kongchan predicted that prices of new houses at low-rise residential projects would fall by 10 to 20 per cent this year because demand had fallen and most home-buyers were delaying their decisions to buy. However, Wasan said the price of city condominium units located close to mass transit systems would either remain steady in 2009, or could even increase by 5 to 10 per cent, depending once again on location. "Although the price of city condominium units may continue to grow, the pace of growth will be lower than last year, when prices rose by 20 to 30 per cent," he said.

 

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