Pruksa predicts 15% growth in home market this year

Presales came in at Bt34.455 billion in the first nine months of the year, while revenue reached Bt33.211 billion in the same period, representing year-on-year growth of 10 per cent and 9.3 per cent, respectively.
However, the listed developer’s profit contracted by 1.6 per cent in the January-to-September period to Bt4.697 billion, because of the delay in transfer and booking numbers as home-buyers waited for the government’s measures to lower transfer and mortgage fees to 0.01 per cent to come into effect.
“Our initial projection for the rate of market expansion was 13 per cent, before the government’s reduced-fees measures were introduced, but we now expect the market to grow by 15 per cent this year based on the measures and the numbers that we are seeing for the third quarter,” Thongma Vijitphongpun, president and chief executive officer, said during a press conference held by Pruksa yesterday.
“A 15-per-cent annual expansion rate for this sector is quite high, since its base growth is around 5-7 per cent per year,” he added.
The residential market’s value in the first nine months was Bt255.46 billion, some 19 per cent higher than in the same period last year.
Pruksa, which accounted for around 12 per cent of the market, expects full-year market value to reach Bt337.48 billion amid the ongoing economic slowdown, he explained.
“We are confident that we will surpass our total revenue target of more than Bt47 billion as our presales already reached Bt34.4 billion in the first nine months, which represents around 70 per cent of our target, not including our existing backlog and active projects,” chief operating officer Lersak Chuladesa told the press conference.
He said Pruksa currently had some Bt33.21 billion worth of backlog, which could be transformed into revenue of around Bt16.54 billion – some 60 per cent of it being condominium units that are ready to be transferred to customers – in the current quarter.
There is also potential fourth-quarter revenue from the 36 new projects worth Bt35.641 billion that were introduced in the first nine months, comprising 28 townhouse projects, five detached-housing projects and three condominiums, he added.
The developer had around 176 active projects worth Bt80.36 billion as of end-September.
The company is also “interested” in supporting the government’s policy to encourage real-estate firms to come together as a social enterprise to build housing costing less than Bt600,000 for low income earners, but developers are still studying how much they can contribute to the scheme, said Lersak.
Around 54 per cent of Pruksa’s detaching-housing business is for homes priced below Bt3 million.
“How many times the US Federal Reserve hikes interest rates next year, how much the euro-zone economy recovers, and the extent of China’s slowdown are all things that have to wait to be seen … but the global economy is still expanding and the government’s fiscal deficit of around Bt390 for next year – to be used for investment in infrastructure projects – should be able to boost gross domestic product and economic activities next year, while the real-estate sector should grow alongside GDP expansion.
“But we will have to wait and see whether property-sector expansion is more than 15 per cent this year,” said the chief operating officer.