Developers eye change in plan, to boost sales

With the slight success of the government's economic package and a rise in interest rates on mortgage loans likely, developers are mulling a change in strategy for the second half.

The burden on home-buyers will likely increase 5-6 per cent on rising rates and soaring home prices.

This will dampen their interest in property investments in the second half of the year. Keeping this in mind, developers are busy devising ways to stir things up on the sales front.

Land and Houses is planning to stick to its strategy of offering houses at originally stipulated construction costs, in order to lure buyers. It has priced houses at Bt3 million to Bt5 million. The developer expects the low-cost houses and government tax incentives to boost sales and help the company meet its sales target of Bt21 billion this year.

Land and Houses director and senior executive vice president Adisorn Thananun-narapool said high inflation and the expected rise in interest rates were not the only factors that would lower home-buyers' purchasing power. Worsening consumer confidence will also play a major role in keeping them from house hunting, he said.

Asian Property Development plans to slow down sales of condominium projects for which the company has sought environmental-impact-assessment licences. This is because condominiums take longer to build.

"This strategy will protect customers in case the projects do not pass the assessment or there is need for a change in building plans," a company source said.

The developer plans to launch 10 projects worth a combined Bt18 billion this year, of which five worth Bt10 billion are condominiums along the Skytrain.

Preuksa Real Estate is focusing on residential projects in Bangkok's central business district and on the outskirts of the city.

The company is buying construction materials in advance and speeding up projects, in order to keep costs down. It recently put up 23 projects for sale and has also launched three-storey modern townhouses and single-detached houses at competitive prices.

LPN Development is planning to concentrate on low- and middle-income customers. The company is confident of meeting its income target of Bt7.5 billion to Bt8 billion this year. This is because 90 per cent of its projects undergoing construction are reserved.

It plans to launch a new Bt5-billion project in the Rama IX Road area, which will help its presales reach Bt11 billion for the whole year.

Meanwhile, Property Perfect is speeding up new project launches, raising prices and lifting up margins.

It plans to factor in increased construction costs this month and in the second half.

The company expects the move to push buyers who are otherwise reluctant to go for a house now to rush in and snap them up before prices rise.

The company predicts presales of Bt10 billion for the entire year, up Bt1 billion from previous projections, with the launch of seven new projects worth a combined Bt20 billion.

It looks set to achieve presales of Bt3.2 billion to Bt3.3 billion in the first five months of the year, up Bt2 billion from the same period last year.

      At a glance

n Land and Houses plans to offer houses at originally stipulated construction costs.

n Asian Property Development plans to slow down sales of condominium projects up for environmental-impact assessment.

n Preuksa Real Estate is buying construction materials in advance and speeding up projects, to keep costs down.