A growing number of potential homebuyers are backing out of property purchases due to personal concerns about economic stability, a trend now surpassing loan rejections as the primary reason for failed property transfers. This phenomenon, termed “self-rejection,” accounts for approximately 50% of all unsuccessful property deals, according to Kessara Thanyalakpark, Managing Director of Sena Development. This figure is notably higher than the 40% attributed to bank loan rejections and the remaining 10% from conventional buyer cancellations.
Understanding the Rise of ‘Self-Rejection’
Ms. Kessara highlighted that this shift is distinct from past market conditions. Previously, cancellations were more closely tied to financing issues. However, the current trend sees buyers withdrawing their offers even after viewing completed properties, many of which are move-in ready and have secured mortgage approvals. This suggests that the root cause is not a lack of financing but rather a decline in consumer confidence.
The primary drivers behind this hesitancy appear to be widespread concerns over economic uncertainty and long-term financial security. Potential buyers are expressing anxieties about job stability, their capacity to manage a 30-year mortgage commitment, and potential shifts in household finances. This can include situations where a co-borrower withdraws their participation shortly before the final transfer date.
Impact on the Property Sector
This surge in self-rejection poses significant risks to the broader property market. Failed transfers directly impact developers’ cash flow, which can have a cascading effect on their ability to meet financial obligations to contractors, suppliers, and lending institutions. The reduced predictability in sales also complicates long-term planning and investment for property firms.
Sena’s Innovative Solution: The Livnex Program
In response to these market dynamics, Sena Development has adapted its rent-to-own program, Livnex. Initially conceived for individuals struggling to secure traditional mortgages, the program has been broadened to accommodate buyers who are hesitant to commit to homeownership due to economic volatility.
How Livnex Works
The Livnex scheme allows participants to reside in a property and make monthly payments for up to three years. During this period, they can evaluate their financial situation and commitment to buying. Key features of the program include:
- Affordable Entry: Monthly payments are structured to be comparable to rental costs, making them more accessible.
- Equity Building: A portion of each monthly installment contributes towards the property’s principal value.
- Flexible Exit: Buyers have the option to withdraw from the purchase after three years without incurring any penalties.
- Price Lock-in: The program enables buyers to secure current property prices, protecting them from potential future increases.
Ms. Kessara emphasized that Livnex aims to address buyers’ core concerns about financial commitment rather than simply offering price reductions. She noted that accumulated payments over the three-year period can effectively reduce the final purchase price by approximately 9%.
Program Success and Challenges
Since its inception nearly three years ago, Livnex has enrolled between 900 and 980 customers. To date, 187 buyers have successfully completed their home transfers through the program. Approximately 100 customers have opted to exit the scheme within the stipulated period.
The current year marks a significant milestone as the first batch of contracts matures, making around 80 customers eligible for final property transfers. Sena anticipates that by the end of the year, 400 to 500 units, valued at approximately 1 billion baht, will be transferred to buyers. Despite these successes, a persistent challenge remains: some participants with impeccable payment records still face difficulties securing bank mortgages due to exceeding debt service ratio limits.
Addressing Mortgage Qualification Hurdles
Sena is actively collaborating with financial institutions to advocate for greater recognition of customers’ consistent repayment histories within the Livnex program. For eligible participants who continue to face financing obstacles, the company is prepared to extend the program duration to a fourth year.
Sena’s Strategic Outlook
In light of the prevailing market uncertainty, Sena Development plans to maintain its suspension of new project launches for the remainder of the year and into the next. The company’s strategic focus will be on optimizing existing inventory and strengthening its financial position.
Sena currently manages a portfolio of 98 projects, comprising over 10 billion baht in completed inventory and a development pipeline valued at 40 billion baht. This substantial asset base is deemed sufficient to support annual sales of approximately 7 billion baht for the next five years.
Financial and Business Diversification
The company is committed to improving its financial health by targeting a reduction in its debt-to-equity ratio from the current 1.2-1.3 times down to 1.0. Additionally, Sena aims to decrease its outstanding debentures from 10 billion baht to 6 billion baht. A key element of this strategy involves expanding recurring income streams from diversified sectors, including green energy, electric vehicles, leasing, and other services.
Evidence of this diversification is already apparent. In the first quarter of 2026, revenue from Sena’s green business segment surged to 13% of total revenue, a significant increase from 4% in the previous year. Similarly, recurring income from rental and service operations grew to 21% from 10%. Consequently, the proportion of revenue derived from residential property development has decreased to 62%, down from 78% a year prior.
Regarding human resources, Sena intends to avoid staff reductions. Instead, the company will focus on retraining its employees and enhancing asset management capabilities to cope with the longer holding periods for completed inventory.
