Outlook Real Estate to see increase in market value

The market value of the proper¬ty sector this year is expected to be slightly higher than last year though only large property developers can benefit from the tax incentives granted to homebuyers.

Financial results for the first half of the year show that nine out of 10 leading property companies, listed on the Stock Exchange of Thailand, showed strong growth in revenue and net profit compared to the same period last year. Only one leading player, Sansiri, recorded a net loss of Bt75.02 million in the first half though sales grew 6.6 per cent.

Sansiri president Apichart Chutrakul said the company report¬ed a net profit of Bt179 million in the second quarter of the year but it recorded a net loss of Bt253.76 mil¬lion in the first quarter. This led to a net loss for the first half of the year.

The loss in the first quarter was because its subsidiary, Plus Property, had to revamp 11 Condo One proj¬ects after the new building law came into effect.

Some small and medium proper¬ty developers in the market also recorded minimal sales growth, while others posted a drop in revenue and net losses.

For example, Metrostar Property's total revenue dropped 57.57 per cent to Bt87.27 million in the first half of this year from Bt205.71 million in the same period last year. The company also record¬ed a net loss of Bt53.54 million in the first half of the year compared to a net loss of Bt72.10 million a year ago.

Company director Phisith Tangkhawanich said the company's total revenue fell because of an increase in oil, commodity and con¬structionmaterial prices, uncer¬tainty in politics and higher compe¬tition, which took a toll on customers' purchase decisions.

However, the company's net loss in the first half of this year was still lower than its net loss last year, as it benefited from the government's tax incentive, especially special income tax.

Areeya Property posted total rev¬enue of Bt291.06 million in the first six months, down 34.88 per cent from the same period last year. The company recorded a net profit of Bt10.69 million in the first half of the year, recovering from a net loss of Bt50.26 million last year.

Areeya senior executive vice pres¬ident Vanchai Sriherunrusmee said the company's main revenue in the second quarter came from the trans¬fer of townhouse units of The Colors Tiwanon and At Home, that began in April. The company's revenues in the same period last year were main¬ly from single detachedhouse proj¬ects of Sawana 1, Sawana 3, Areeya Bussaba, Areeya Mandarina and Areeya Mova Kaset.

Real Estate Information Centre director general Samma Kitsin said homebuyers will increase purchas¬es in the second half of the year as house prices may remain stable due to a likely drop in raw material prices such as steel and cement.

"We believe the property market in the second half of this year will be better than the first half of this year," Samma said.

"We believe the propertymarket size in Bangkok and suburban areas will be between 70,000 units and 75,000 units."

Property Perfect chief operations officer Teerachon Manomaiphibul said small and mediumproperty companies, which focus only on one product will not benefit from the tax incentives.

Lowrise residential projects will benefit from the tax incentives as most property developers will deliv¬er projects before the incentives expire on March 28 next year, he said.

LPN Development managing director Opas Sripayak said the com¬pany has increased its sales to Bt3.63 billion in the first half of the year from Bt2.97 billion in the same peri¬od last year.