Cut in credit outlook for 4 developers
Tris Rating Co has downgraded the credit outlook for four listed residential developers from stable to negative because of the impact of the floods on housing demand.
Demand for homes is expected to weaken as home-buyers may change their behaviour after many residential projects were swamped.
This will affect real-estate firms with high leverage and a concentration on low-rise projects, according to Tris’ statement.
Prinsiri, Pruksa Real Estate, Property Perfect and Quality House were the stocks hit with the outlook downgrade.
The rating agency forecasts a plunge in housing demand this and next quarter.
The soft market for low-rise residential units in the areas hit hard by the flooding may continue in the second half of next year, while demand for condominiums will recover soon next year, it said.
Diminished demand in the flood-hit areas will lead to an oversupply of homes while buyers will postpone purchase decisions. Resale homes will add to the problem.
“Tris will assign a stable outlook back to the four real-estate firms if they can achieve revenue growth and can avoid rising debt. However, if they cannot strengthen their financial positions in a reasonable period, their credit ratings will be slashed,” it said.
