Residential market sees a slowdown

 
Demand during the remainder of the year also looks set to fall, with many home-buyers and investors pushing back their purchasing decisions.
However, most leading residential developers are trying to boost sales during the final quarter by continuing to launch projects.
According to research by LPN Development, while new condominium launches in greater Bangkok in the third quarter comprised 14,020 units, up 9.6 per cent from the preceding three months, sales volume was lower than for those launched in the second quarter, due to falling demand.
Meanwhile, new condo projects launched in greater Bangkok during the first nine months of the year recorded a total of 42,464 units, down 4.6 per cent from 44,529 units in new projects launched in the same period last year.
The developer’s research forecasts that the full-year condominium market in Bangkok and its suburbs will decline by about 5 per cent from last year’s level.
Capital Nomura Securities’ research, meanwhile, shows that the sales value achieved by listed developers declined year on year in the first nine months.
According to the firm’s analysis, Pruksa Real Estate’s presales during the nine months came in at about Bt34.7 billion, nearly the same as in the same period last year, but the developer achieved only 68 per cent of its presale target of Bt51 billion. 
Aira Securities reported that for the first nine months, Sansiri generated presales of Bt20.2 billion, some Bt12.6 billion of which was from detached housing and townhouses and Bt7.59 billion from condominiums.
This accounted for only 48 per cent of its presales target of Bt42 billion.
AP (Thailand) recorded presales of Bt19.1 billion in the period, or 62 per cent of its presales target of Bt31 billion. 
The company has signalled a delay in launching four new projects during the current quarter, which could result in the 2016 presales target being missed.
According to a survey by the Government Housing Bank’s Real Estate Information Centre (REIC), several property firms will delay further launches over the remainder of the year. 
“For condominiums alone, projects comprising more than 4,000 units will have their launches deferred because home-buyers are delaying residential purchases during the rest of this year,” REIC director-general Samma Kitsin said.
New condominiums launched in the current quarter will now have only 20,000 units, against the earlier estimate of 24,000, he said, adding that this would also be 31 per cent lower than the 29,000 units launched in the fourth quarter last year.
Meanwhile, the centre estimates that total residential launches in Bangkok and its suburbs this year will come in at about 94,000 units – some 52,000 of them in condominiums, and the remainder in low-rise projects such as detached housing and townhouses.
This would represent a drop of 12 per cent from 107,000 units launched last year, and is based on an estimate that around 70,000 units were launched in the first nine months, he explained.
Samma added that although a number of listed residential firms would not be launching further projects this year, inventory in the market was still sufficient for them to boost sales by the year’s end.
The REIC survey found an inventory of 136,000 units in greater Bangkok, comprising 77,000 detached-housing and townhouse units worth Bt340 billion, and 59,000 condo units worth Bt180 billion.
Pruksa Real Estate’s president of premium business, Prasert Taedullayasatit, said the company would continue with its plan to launch another 30 to 40 projects by the year’s end.
However, it will not conduct further marketing or advertising campaigns in the remaining months.
While this may impact sales in the final quarter, it should not affect overall revenue because most of its customers have continued to have their new homes transferred to them on time, he explained.
Sansiri, meanwhile, is pressing ahead with its planned launch of two condominium projects – The Line Sukhumvit 101 and The Line Phahonyothin-Pradipat, worth Bt10 billion combined – this month.
“We are continuing to launch condominium projects in line with our business plan,” Uthai Uthaisangsuk, senior executive vice president for condominiums, said.
He added that both projects would be launched in Thailand, Hong Kong, Singapore, Taiwan, China and Malaysia at the same time, as the company strived to achieve its full-year presales target.
Origin Property will launch its latest condominium project, the Bt618-million Notting Hill Jatujak-Interchange, which will open for bookings on November 12.
“We are launching our new project to boost sales, even though market sentiment will not improve for the property sector during the rest of the year. We are confident that its location will drive sales growth during the remainder of the year,” said chief executive officer Peerapong Jaroon-Ek.