Second-half market growth of 10-15% now foreseen due to post-coup recovery in home-buyers' confidence
Residential developers have revised their business plans and will launch additional projects over the remainder of the year after witnessing a recovery in demand last month.
They now target second-half growth of between 10 and 15 per cent compared with the same period last year.
Such a boost over the remainder of the year means that the property market for the full year is now likely to decline by 10-15 per cent from the 2013 level, which would be a marked improvement on earlier estimates of a drop of between 25 and 30 per cent, according to leading developers.
“We have revised up our revenue target from Bt41 billion this year to Bt45 billion, thanks to the return of consumer confidence to the market after the coup on May 22,” said Pruksa Real Estate president and CEO Thongma Vijitpongpun.
Up to 70 per cent of potential home-buyers visiting the developer’s residential projects last month decided to purchase a home, a huge improvement on the situation earlier in the year, when just 30 per cent of visitors were prepared to commit, he said.
Following the return of demand to the market, the company has revised its business plan from launching 50 residential projects worth Bt50 billion this year to 60 projects worth up to Bt60 billion, he added.
Golden Land Residence, a subsidiary of Golden Land Property Development, has upped its presales and revenue targets from Bt2.19 billion and Bt1.9 billion, respectively, to Bt3 billion and Bt2.2 billion for the full year.
This is thanks to a return of confidence among home-buyers, said managing director Sanpin Suki.
To achieve the new targets, the company plans to launch eight residential projects worth Bt4.3 billion in the second half of the year, with four of them worth Bt2.3 billion coming in the current quarter.
LPN Development, meanwhile, plans to launch three condominium projects worth Bt7.4 billion, after witnessing a recovery in demand during June, said managing director Opas Sripayak.
“We believe the property market will recover in the second half of the year. However, the overall market for the whole year will still drop by between 10 per cent and 15 per cent because it fell more than 30 per cent in the first five months of the year,” he said.
AP (Thailand) chief marketing officer Vittakarn Chantavimol said that due to the property market having started to recover last month, the overall number residential project launches in the second quarter had dropped by only 17 per cent, year on year.
This was much better than the 40-per-cent decline in new launches during the first quarter, he said.
“We believe the market will recover in the second half, as a result of which we will launch 12 residential projects worth Bt13.2 billion in the latter half after launching seven projects worth Bt10.52 billion in the first six months.
“This is in line with our original business plan to launch 19 projects worth Bt23.7 billion over the course of the year,” he added.
Property Perfect CEO Chainid Adhyanasakul also believes the property market will recover in the second half of the year, due to political stability under the National Council for Peace and Order (NCPO).
He also believes the NCPO’s eventual approval of the economic road map in regard to investment in the country’s infrastructure – such as the double-track rail system, Skytrain and underground – will start to boost investment next year.
These mega-projects will in turn give a major boost to the property market next year, where especially strong growth can be expected in the provinces, where developers have been delaying project launches since early this year, said Chainid.