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Bangkok Apartment – First-half presales could slump by 40%

By on May 09, 2014 in Property News, Residential

Numbers down 42% in Q1 as purchasing power falls amid higher personal debt, sluggish economy and political turmoil.  The residential property market in greater Bangkok could drop by up to 40 per cent in terms of presales in the first half of the year, following a first-quarter fall of 42 per cent.  The significant market slowdown in the first three months was due in large part to reduced purchasing power, as many home-buyers faced a high debt burden arising from the first-car scheme and other forms of personal debt.

A survey carried out by The Nation among the leading listed property companies found their first-quarter presales were sharply lower than in the same period last year, as many home-buyers had delayed their decision to purchase a home out of concern over their debt burden and future earnings – amid the country’s sluggish economic growth and the prolonged political turmoil.

Financial results hit 

Leading developers’ net profit also declined in the first quarter, with more customers delaying having homes transferred to them as they were unable to get bank approval for their mortgage applications, due to a higher debt burden arising from credit-card spending and commitments under the first-car scheme.  DBS Vickers Securities (Thailand)’s analysis shows that listed residential developers’ financial results for the first quarter will be lower than in the same period last year, partly due to delayed launches of new projects in January and February.  Although they did resume launches in March, the market was still suffering from a lack of confidence on the part of home-buyers, the securities house said.

According to a survey by The Nation, commercial banks’ restrictions on mortgages currently result in 20-30 per cent of new home-buyers having their loan applications refused.  This has contributed to the first-quarter financial results of leading developers being lower than in the same period last year.

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