Upbeat developers decide to dust off postponed projects

Real Estate August 08, 2014 01:00

By Somluck Srimalee
The Nation

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Property developers have been unveiling plans for residential project launches worth more than Bt177.6 billion during the second half of the year, on the back of the country's improving economic-recovery prospects and the return of confidence among home-b

A survey by The Nation found that both listed and non-listed property companies had decided to launch more residential projects, after having delayed many planned launches during the first half of the year due to the political turmoil.
“Since the coup on May 22, home-buyers’ confidence has returned to the market, causing us to revise our business plan from launching 50 projects worth Bt50 billion to 70 projects worth about Bt70 billion over the course of this year.
“Thirty-seven projects were launched in the first half, especially in the last week of May and during June, and the remaining 33 projects will launch in the second half,” said Thongma Vijitpongpun, president and CEO of Pruksa Real Estate.
The National Council for Peace and Order’s taking over of the country’s administration created renewed confidence among potential home-buyers, to an extent that the company had decided to revise its business plan for the year, he added.
Sansiri president Srettha Thavisin said the company had maintained its plan to launch 13 projects worth Bt23.6 billion during the second half.
Meanwhile, Supalai deputy managing director Tritecha Tangmatitham said demand was recovering strongly during the latter half of the year, as evidenced by the success of its latest condominium project, Supalai City Resort Baring.
Launched only a week ago, the Bt790-million project has already presold more than 90 per cent of its value.
This is higher than the company estimated and confirms that the market is recovering, in particular for projects that match customer demand and the best location, he said.
Full-year fall of 10% likely
Despite residential demand recovering and the latter half of the year promising to be considerably better than the first six months, Kittipol Pramoj Na Ayudhya, managing director of Sammakorn and also director of the Thai Real Estate Association, said he expected the overall property market this year to contract by 10 per cent due to the roughly 20-per-cent decline experienced through to June.
“If the market were to grow this year compared with last year, it would mean it would have to expand more than 20 per cent during the second half. But this is very difficult [to achieve] at a time when commercial banks are still restricting the provision of housing loans due to the rising level of household debt,” he said.
According to research by the Government Housing Bank’s Real Estate Information Centre, the number of townhouse and detached-housing projects launched in the first four months of the year dropped by only 15 per cent, but condominium launches plunged by 40 per cent.
The Housing Finance Association, meanwhile, expects new lending this year to be relatively flat, with outstanding loans possibly expanding by no more than 5-6 per cent.
The economic situation and residential-property market both seem to be on a recovery path, said association president Kitti Patpongpibul, citing a rise in the Bank of Thailand’s residential price index in June against the same month last year.
The price of detached housing with land increased by 4.8 per cent year on year in June, townhouse prices rose 8.3 per cent, condominium prices increased by 9.8 per cent, and land was 11.1 per cent higher, he said.
This has led property firms to try to boost sales by launching additional projects and special promotions since the middle of the year, he added.
Home fairs are one of the promotional tools available to developers, and the Housing Finance Association – together with Home Buyers’ Guide – is organising the annual “Home & Condo Expo” and credit-fair events during August 21-24 at the Queen Sirikit National Convention Centre.
The expo this year is expected to receive a good response from customers thanks to a pick-up in consumer confidence. At the fair last year, customers applied for home loans worth a combined Bt11.78 billion.
At this year’s event, Siam Commercial Bank – the biggest housing lender among the country’s commercial banks – will grant buyers of its non-performing assets a reprieve for the first year. 
Meanwhile, Bangkok Commercial Asset Management is waiving the transfer fee for its NPAs at the event, while Krung Thai Bank offers a zero interest rate for 12 months for its NPAs.
The Government Housing Bank is offer an instalment-payment deal for down payments to its NPA buyers, and an additional zero interest rate for another 12 months after the buyer has been granted a loan.