developers'shares soar on

Almost all listed developers enjoyed a leap in stock prices of 5-18 per cent yesterday after the government recently announced tentative plans to double the tax deduction for home-owners.

Supalai closed up 18.60 per cent at Bt2.04, Sansiri rose 6.02 per cent to Bt1.76, Land and Houses climbed 5.59 per cent to Bt3.78 and Quality Houses advanced 5.43 per cent to Bt0.97.

Suwanna Buddhaprasart, deputy managing director of Quality Houses, said the government's plan to raise the ceiling would rebuild home-buyers' confidence and also help developers sell their projects amid the economic slowdown.

Home-builders that target the middle to high-end market, would benefit the most from the new policy, she said.

The Finance Ministry is considering raising the personal income tax allowance for mortgage interest from Bt100,000 to more than Bt200,000 next year as part of the new government's measures to prop up the teetering economy.

Suwanna said the company would be more careful with its 2009 business plan as the global recession would weaken the purchasing power of prospective home-buyers.

The company's executives are discussing the situation and might lower prices if purchasing power plunges.

Quality Houses might also freeze its plan to buy more land in a bid to maintain its cash flow. The company's 2009 revenue growth target of 10 per cent is conservative, equivalent to this year, she added.

Land and Houses said the tax incentive would help first-time home-buyers, especially those shopping for units costing Bt3 million-Bt4 million.

Considered as a pre-built home developer, the company would gain from the measure, as its customers would find it easier to make a buying decision, director Adisorn Thananan-narapool said.

Land and Houses plans to launch 11 projects worth a combined Bt16 billion in the coming year.

However, the company this year will miss its sales target of Bt21 billion due to the economic downturn, he added.

Major Development CEO Suriyon Poolvaralaks said the bigger tax break might not promote the company's business much because its target group had higher income. Its condos run from Bt3 million on up to Bt20 million.

Siam Commercial Bank president Kannikar Chalitaporn said the ministry's plan would stimulate growth because this industry is important to the whole economy.

DBS Vickers Securities said in a research note that wealthy investors would turn to real estate because property prices here are lower than in other countries in the region.

Mid-market and premium home and condo builders such as Quality Houses, Land and Houses and Asian Property will benefit the most from the measure, the brokerage said.

Siam City Research Institute took a positive view of the government's plan, saying it would encourage consumers to buy new homes.