Property firm Supalai will go ahead with its plans to launch two new condominium projects worth more than Bt2 billion in the second half of this year despite the Bank of Thailand's warning of a bubble in the condominium market.
Meanwhile, the company has adjusted its budget for buying land this year from Bt3 billion to Bt3.5-Bt4 billion. It has already spent close to Bt3 billion in the first half of the year.
To support its rising investment, the company is studying the possibility of issuing debentures to raise Bt1.5 billion to Bt2 billion in the second half.
Managing director Atip Bichanond said the condominium market consisted of nearly 50,000 units this year. Real demand - buyers who will live in the property - accounted for 70 per cent of the total market value, with another 20 per cent comprising those who buy condominiums as investments, to rent for between 6 per cent and 10 per cent returns a year, which is higher than bank deposits. The remaining 10 per cent are speculators, who are not numerous enough to have a serious effect on prices.
Atip added that the company would launch 15 new residential projects worth Bt15 billion in the second half of this year. Two of those will be condominiums, nine will be single detached houses and the remaining four will be residential projects upcountry - in Khon Kaen, Phuket, Hat Yai and Chiang Mai.
The company continues to estimate pre-sales of Bt15 billion after recording Bt8 billion in the first seven months of the year.
The latest condominium project, City Home at Srinakarin, worth Bt1.25 billion, will book pre-sales in the third quarter. The project will open for booking next Saturday and Sunday at Paradise Park. It expects pre-sales of 70 per cent of the 1,320 units. This is the company's second condominium project that got Board of Investment tax privileges by offering prices between Bt900,000 and Bt1 million per unit.
The company may raise its prices for residential property by 3 per cent to 5 per cent in light of increased construction costs.
"We cannot increase the prices of residential property for all of our projects nationwide because of the fierce competition in the market. But we will adjust prices in some locations where the demand is strong," he said.