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Published on November 16, 2007

Property developers are stampeding to launch residential projects in what is left of the year, following strong indications last month that home-buyers' reluctance to spend is coming to an end.

For most of the year, the property market was depressed by negative consumer sentiment fostered by the country's economic slowdown and political uncertainty. But with the general election imminent, property firms are hoping the "wait and see" period has come to an end and that the floodgates are now opening on long-suppressed desires by many to own a new home.

A Nation survey show many property developers that had delayed launching new residential projects in the gloomy environment of earlier this year are now hurrying to launch both condominium and single-detached-housing projects.

Most of them say they are convinced home-buyers' confidence has returned after sales last month rose 20 per cent.

Asian Property Development senior executive vice president Visanu Suchatlumpong says home-buyers are now showing strong confidence in buying houses after delaying their decisions in the third quarter.

"Our presales grew up to 20 per cent in October from the month before, and we expect growth of nearly 50 per cent in the final two months of the year," he says.

Preuksa Real Estate CEO Thongma Vijitpongpun says home-buyers began to make decisions to buy as soon as the country's political picture became clearer, with an election scheduled for December 23. Most of them opted for city condominiums, and Preuksa has decided to launch a new condominium project, The Ivy at Sathorn, before the end of next month.

"We believe that our presales in the final quarter of the year will increase up to 20 per cent to Bt4 billion, compared with only Bt3.4 billion in the third quarter," Thongma says.

Nexus Property Consultants managing director Apisit Limlomwongse says many home-buyers delayed their decisions to buy in the third quarter because they were concerned about political uncertainty and their cost of living, following oil-price rises.

However, knowing that an election will be held on December 23 and having accepted increases in their cost of living, they can now decide which kind of residence matches their lifestyle.

Apisit says prime locations for "city lifestyle" condominiums - designed to cash in on this trend - continue to be close to Skytrain or subway routes, especially in the "new" central business district on Phaholyothin, Ratchadaphisek and Sukhumvit roads.

A survey by Nexus Property Consultants shows Phaholyothin Road alone has 10 condominium projects launched by nine property firms, with a combined 2,500 units worth up to Bt5 billion. They include two projects under The Life brand, by Asian Property Development; Noble Reflex, by Noble Development; Silk Phaholyothin 3; Haven; Ananda Development's Ideo Mix Saphan Khwai; Baan Aungsana's Prom Phaholyothin 2; Intro by Rasa; MBK's MB Grand Phaholyothin; and The Seed by Preuksa Real Estate.

Believing strong demand for city condominiums will continue, property firms have rushed to launch new projects to lift their presales in the final quarter of the year. They include Asian Property Development, Prinsiri, Noble Development, the Sansiri Group, LPN and Preuksa Real Estate.

The Nation's survey shows new residential projects launched in the fourth quarter will offer up to 10,000 units worth a total of nearly Bt30 billion.

Prinsiri deputy managing director Chaiwat Kovitchindachai echoed the experience of other developers by saying home-buyers returned to the market last month, so Prinsiri proceeded to launch a condominium project worth Bt1.8 billion on Rama II Road called Smart Condo. It will target lower- to middle-income earners.

Prinsiri will also launch two new residential projects next week worth Bt1 billion. The first will be a single-detached-housing project on Prachacheun Road called Prinyada, worth Bt600 million. It offers houses priced at Bt5 million per unit.

The second will also be on Prachacheun Road. It will be a Bt400-million townhouse project called Prinlux that will offer units for up to Bt2.5 million.

The company is planning to launch six to 10 residential projects worth up to Bt10 billion next year, focusing on the lower- to middle-income market. It also plans to spend up to Bt2 billion to buy land for further such projects.

Although demand for residential units is showing signs of recovery, demand continues to be limited to projects offering housing for less than Bt5 million.

Prompt Pattana Property general manager Wirote Kappiyajanya says growth has been particularly marked for residential units costing less than Bt2 million, including both condominium units and detached houses.

Nexus Property Consultants' Apisit says the market for condominium units close to mass transit will continue to dominate residential projects in the final months of this year and into next year.

These projects will focus on the middle-income market rather than the high end, because most home-buyers have been continually reducing their budgets and want location and functionality to be matched with a reasonable price.

Noting market trends, Nexus believes 50,000 condominium units will be sold this year, despite only 33,000 units having been sold in the first nine months. It expects total volume in the overall residential market to reach 66,000 units this year.

 Somluck Srimalee

 The Nation