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Bangkok Condominium Developers Keep Up Investment

By on Dec 18, 2013 in Property News, Residential

Despite the domestic political turbulence and uncertainty, most listed property firms are continuing to expand their investment next year, with plans to launch new residential projects worth more than Bt272 billion combined. A survey by The Nation found that the top listed developers plan to launch 235 projects in Bangkok and the provinces during the course of the year, covering the whole spectrum of condominiums, detached housing, townhouses and twin-houses.

Pruksa Real Estate has the biggest plans, intending to launch 50 projects worth Bt50 billion, which is almost the same level as this year.

Sansiri is the next most ambitious player, with plans for 40 new projects worth about Bt40 billion. This is lower than this year’s level, as the company has changed its business strategy and will now get an environment impact assessment (EIA) permit before introducing each new project.

Land and Houses and Supalai, meanwhile, each plans to launch 24 projects – nearly the same as this year – while other listed developers’ plans are summarised in the accompanying graphic.

Supalai president Prateep Tangmatitham said the company would spend Bt5 billion to buy land for the development of 24 projects next year, while Bt1 billion would be for expanding overseas investment, especially in land in Melbourne, Australia, for the development of a residential project for sale.  The company targets revenue growth of more than 15 per cent next year, from targeted revenue of Bt14 billion this year. Eight of the 24 projects to be launched by Supalai next year will be condos, and the remainder will be detached-housing and townhouse projects. At least seven projects will be in the provinces, including one each in Ubon Ratchathani and Nakhon Ratchasima.

Around half of the new residential projects to be launched by the end of next year will be condominiums, well below the 70-per-cent level this year. This is to a large extent because property firms launched a higher-than-normal number of condominium projects in 2012 and during the course of this year, and these take time to build and deliver to customers from 2014 through 2016.

Sansiri president Srettha Thavisin said the company would reduce the number of condominium projects to be introduced in 2014, now that it has a condo backlog of more than Bt40 billion that will be delivered to customers through to the end of 2017. “We will focus on low-rise condominiums of about eight stories, rather than high-rises. We will also only launch projects when they have been granted an EIA permit. This will build customer confidence when it comes to buying in one of our projects,” he said.

Research by the Government Housing Bank’s Real Estate Information Centre confirms that next year should see fewer condominium projects than this year’s total of up to 75,000 units, because of an oversupply amid higher construction costs. The centre’s director-general, Samma Kitsin, said a persistent labour shortage meant property developers could not construct and deliver homes to their customers on time, forcing them to limit their 2014 project launches. He added that housing prices also looked like increasing by 10-15 per cent next year, driven by rising costs of construction materials, land and labour.
This year, the average price of a detached house is about 25 per cent higher than 2009’s Bt4.72 million, rising to Bt5.91 million. Townhouse prices have also increased, from an average of Bt1.66 million in 2009 to Bt2.25 million this year – up 36 per cent.

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