Market set for policy boost in fourth quarter

Property firms believe that the market will fare better in the fourth quarter of this year compared to the third quarter when home-buyers get a clear picture of the government's policy.

Although the government has not implemented its election promise of zero interest for the first five years for the first home, buyers who have been waiting will make their decision to buy and transfer the projects in the last quarter of this year, property experts said.

Sansiri president Srettha Thavisin said the company has revised up its pre-sale target to Bt26 billion after the company recorded pre-sales of Bt16 billion in the first eight months of this year. The company believes that home-buyers who delayed buying and transferring their residences in the third quarter of this year are ready to do so now.

The company has 8,300 units, worth Bt20 billion, of residences priced lower than Bt5 million per unit, which will be transferred to home-buyers in the last quarter of this year and next year before the government's tax-allowance policy expires on December 31, 2012.

Up to 3,500 units, worth Bt8 billion, have already been sold and will be transferred this year and next year. The balance of 4,800 units, worth Bt12 billion, priced lower than Bt5 million per unit, are ready for sale.

"We believe that our pre-sales from now till the end of this year will achieve Bt10 billion, enabling us to achieve our pre-sales target of Bt26 billion by the end of this year," he said.

Pruksa Real Estate director and chief business officer Prasert Taedullayasatit said the company's financial results in the third quarter of this year may see a 20-per-cent drop below its estimate as some of its customers delayed their decision, expecting the government to launch a special financial package for them. But now they are clear about what they will get from the government's stimulus package for first homes. This will help its customers make a decision on transferring their residential units to avail of the special financial package from commercial banks, which now offer zero interest for the first six months or one year.

Some of them also will get zero interest rate for the first two years, which was from the previous government. This will drive transfer of residences above its estimate in the last quarter of this year, he said.

He added that this will boost total revenue to achieve its target of Bt30 billion this year, revised down from Bt32 billion since the second quarter of this year.

LPN Development managing director Opas Sripayak said the company will have a number of condominium projects to transfer to its customers in the last quarter of this year. This follows the company's success in transferring condominium units worth more than Bt5 billion in the third quarter of this year.

The company also plans to launch two residential projects in the last quarter of this year worth nearly Bt3 billion. One of them will be located in Pattaya and another in Bangkok. This is a part of its efforts to boost presales to meet the target of Bt14 billion this year, he said.

Asian Property Development senior vice president Pumipat Sinacharoen said the company's presales and total revenue in the third quarter of this year will meet its target. The company also believes that its presales and total revenue would meet the target for the fourth quarter.

"We will get less benefit from

the government's stimulus package for the first home because most of our customers buying residences priced between Bt3 million and Bt5 million are not buying their first homes. As a result our presales and total revenue in the third quarter of this year have continued to maintain growth through the last quarter of this year," he said.

According to a survey by The Nation, the number of new residential projects by listed property firms ready for transfer in the last quarter of this year was between 25,000 and 30,000 units, worth between Bt75 billion and Bt90 billion. If home-buyers are ready to transfer that will boost the property market in the last quarter, after dropping about 9 per cent.

However, if the market recovers in the last quarter of this year, that will drive property market growth between 5 and 10 per cent at the end of 2011 compared to the previous year, Business Housing Association president Issara Boonyoung said.