The new target represents a drop of 12.5 per cent from record sales of Bt2.4 billion last year. Sales reached only Bt970 million in the first half of this year.

Company president and managing director Visit Kunatharakul said that sales in the first half of the year were down 20 per cent on target following a drop of 20 to 30 per cent in property resales from the same period in 2005. "We have to adjust our sales target because purchasing power in the market dropped following the cost of living increase after rises in oil prices and interest rates," he said.

He said most people were delaying their decisions to buy houses, either new or resale, because of concerns that their monthly payments will increase with rising interest rates.

Monthly repayments increase by an average of 8 per cent for every one-per-cent interest rate rise.

Visit said the current political uncertainty was also having a negative effect on the housing market.

To help achieve its new sales target, Visit said Realty World Alliance was running its "Old Home Purchase with New Home" campaign, under which the company offers to purchase potential home-buyers' existing properties in part exchange for a new one.

The first phase of the campaign, which runs until September 30, offered 32 renovated houses to prospective buyers.

The campaign as a whole is expected to achieve sales of Bt110 million.

The company is also negotiating with commercial banks to manage their non-performing assets, especially housing loans.

"We believe our marketing strategy will drive sales to the new target of Bt2.1 billion," Visit said.

Somluck Srimalee

The Nation