Slower growth forecast for second half
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Developers cite economic slowdown and lower purchasing power
The property market is expected to grow more slowly in the second half of the year, due to the economic slowdown and a fall in purchasing power in a key segment, according to leading developers.
Pruksa Real Estate director and chief business officer Prasert Taedullayasatit said the market would be slower than in the first half of the year for these reasons, and that reduced purchasing power would affect the market for homes costing more than Bt5 million.
“Speculation in the market, which had accounted for between 10 and 15 per cent of total market value, has shown signs of dropping following speculators’ income falling as a result of [recent] stock-market losses,” he said.
However, the demand for homes priced up to Bt5 million will continue to expand because this segment represents real demand from those who buy a property in which they intend to live, he said.
Demand for homes priced up to Bt2 million is also continuing to grow, as buyers in that category are generally not those who decided to purchase a vehicle under the government’s first-car scheme, he added.
“Our research shows that customers buying a first car have a different lifestyle from people purchasing a home, which put them in a different market and leads us to believe that homes costing no more than Bt2 million will still experience strong demand,” said Prasert.
Issara Boonyoung, CEO of Kanda Group, said the economic slowdown would impact directly on residential demand in the second half of the year, when purchasing power will decline.
However, the overall market will continue to expand because demand for homes priced up to Bt5 million is still strong among those in employment and generating a monthly income, he said.
Demand for homes in this price category continues to be largely real, rather than demand for speculative or investment purposes, he added.
Nonetheless, Issara said the overall property market may grow by less than had been estimated early this year, due to reduced demand from speculators and investors for properties costing more than Bt5 million.
High first-half presales
Putting aside the prospects for the second half, top 10-listed developers have recorded presales worth more than Bt100 billion combined for the first six months of the year.
Pruksa Real Estate had presales of Bt23 billion, more than half the company’s full-year target of Bt35 billion.
Sansiri’s presales came in at Bt29 billion, more than half the company’s full-year target of Bt48 billion.
Land & Houses, meanwhile, achieved presales worth Bt15 billion, exactly half of the company’s full-year target.
LPN Development recorded presales of Bt15.5 billion in the first half. The company’s full-year target is Bt20 billion.
AP (Thailand)’s presales totalled Bt8 billion, while Supalai achieved Bt10 billion. Their full-year targets are Bt22 billion and Bt26 billion, respectively.
SC Asset Corp saw presales of Bt6 billion in the first half, representing 40 per cent of its target of Bt15 billion for the entire year.
Property Perfect, meanwhile, had presales worth Bt6 billion. The developer’s 2013 target is Bt19 billion.
“Our presales were higher than we had estimated following increased demand for homes costing up to Bt5 million apiece,” said Pruksa’s Prasert.
Supalai managing director Atip Bichanond said the company’s first-half presales had come in lower than estimated because it had launched relatively few projects during the period.
That said, presales were still higher than in the same period last year, he added.
SC Asset chief operating officer Kree Dejchai said presales in the first half had been close to the company’s target, thanks to higher demand than in the same period last year.
