Residential market stable in value terms, but volume down

“We plan to launch more condominium projects in the second quarter, having launched just one in the first three months. This will boost our second-quarter sales beyond what we achieved in the first quarter,” LPN Development managing director Opas Sripayak said during a telephone interview with The Nation early this week.

In the first quarter, LPN Development recorded presales of about Bt3 billion, almost equal to last year’s performance during the same period.

The quarter’s presales were boosted by the launch its first condominium project of the year, the Lumpini Park Beach Cha-Am, in March.

Meanwhile, the company transferred condominium units worth nearly Bt1.95 billion during the quarter from previously completed projects and Lumpini Place Suksawat-Rama 2, the construction of which was completed last quarter, he said.

Pruksa Real Estate’s condominium-group managing director, Prasert Taedullayasatit, who is also president of the Thai Condominium Association, said his company had achieved presales worth Bt12.65 billion in the first quarter – up 54 per cent from the Bt8.19 billion generated in the same period last year.

This was due to demand returning to the market, especially for condominiums priced between Bt3 million and Bt10 million, he said.

“Our sales in value terms have risen, but in volume terms are still much the same as last year,” he added.

Residential demand during the quarter was largely from the middle to upper segments, which had led to increased sales value rather than higher volume, he explained.

Given the market trend in the first quarter, Prasert estimates that the total property market value in greater Bangkok during the first quarter will be similar to the level achieved in the final quarter of 2014, or between Bt70 billion and Bt75 billion.

The overall market in Bangkok and suburban areas this year will be between Bt300 billion and Bt310 billion, some 2 per cent to 4 per cent higher than last year’s Bt297 billion, he predicted.

AP (Thailand), meanwhile, recorded presales of Bt4.7 billion in the first quarter, a whopping 123-per-cent increase from Bt2.1 billion in the same period last year.

Bt3.3 billion of the total was contributed by detached housing and townhouses, and the remainder by condominiums.

 

Q1 launches down sharply

The Real Estate Information Centre (REIC) of the Government Housing Bank reported that the overall number of units in new residential projects launched in Bangkok and its suburban areas last quarter was about 9,000, a drop of 40 per cent from projects comprising 15,000 units launched in the same period a year ago.

The REIC forecasts that the overall market for new residential units in projects launched over the course of this year will fall by about 10 per cent to 65,000 in greater Bangkok.

“In terms of volume this year may see a decline from last year, but in value terms I believe the market will be 2-4 per cent higher for the purchase of homes, and that the supply of new launches will focus on homes generally priced between Bt3 million and around Bt10 million per unit,” said Thai Condominium Association president Prasert.

SC Asset Corp CEO Nuttaphong Kunakornwong, meanwhile, said its luxury housing projects had received positive feedback after achieving 151-per-cent growth in the first quarter.

The company recorded total presales worth Bt2.7 billion in the quarter, up 130 per cent from the Bt1.17 billion posted in the same period last year.

Agency for Real Estate Affairs (AREA) data from 2014 shows that overall more than 850 detached houses priced Bt10 million and above were sold for a total of Bt16.38 billion.

SC Asset was the best performer in this category, selling more than Bt3.67 billion worth of housing at an average of Bt26.4 million per unit, accounting for 22 per cent of the total luxury-housing market, according to the agency.

The company’s sales represented 26 per cent of the total business of all publicly listed residential developers.

Meanwhile, the residential sector’s mortgage-application rejection rate in the first quarter came in at about 30 per cent, said Kitti Patpongpibul, president of the Housing Finance Association.

However, LPN Development’s Opas said the company’s customers had faced a rejection rate of only 5 per cent in the period, much better than its average of 10 per cent for last year.

This means that customers’ purchasing power is recovering, and that more of them now also have a strong-enough financial status to get a mortgage, he added.