Bangkok House Developers See Bright Year Ahead
Listed and non-listed Bangkok house and condo property firms plan to launch residential projects worth more than Bt250 billion combined this year, after forecasts of nationwide market growth of between 5 per cent and 10 per cent over last year’s value.
“The property market will grow by 5-10 per cent nationwide this year, especially in greater Bangkok, thanks to the government’s investment in infrastructure projects,” the president and chief executive officer of Pruksa Real Estate, Thongma Vijitpongpun, said during an interview with The Nation.
The government starting to invest in its planned infrastructure projects will open up new land, in turn enabling companies to develop residential projects.
This will challenge developers to invest in new locations following the new mass-transit routes from Bangkok to the suburbs and nearby provinces, he said.
In line with the market trend, Pruksa will launch more residential projects this year than it did in 2015, the CEO said, adding that it was still evaluating exactly how many launches to undertake.
Pruksa launched 50 projects together worth Bt50 billion last year, lower than its original business plan to launch 70 projects worth up to Bt70 billion over the course of the year.
“The 20 projects that were delayed last year will be launched this year,” he said.
Meanwhile, Sansiri plans to launch 21 projects worth Bt40 billion this year, targeting presales growth of up to 40 per cent over last year’s presales worth Bt30 billion, said the company’s chief operating officer, Wanchak Buranasiri.
The company estimates its total 2016 revenue will reach Bt37 billion, just below the level attained last year, he said.
Tritecha Thanmatithum, deputy managing director of Supalai, said the company intended launching 28 residential projects worth up to Bt31 billion this year.
Some 20 projects worth Bt20 billion will be low-rise developments such as detached housing and townhouses, and eight or nine will be condominiums worth a total of Bt11 billion.
The developer also targets both its presales and total revenue growing by up to 10 per cent over last year’s levels, thanks to such government measures as cutting transfer and mortgage fees, and also the investment in infrastructure projects that will kick off during the year, he said.
Investment in infrastructure such as double-track railways, motorways and 10 new mass-transit routes in greater Bangkok will turn Thailand into a regional transport within the newly implemented Asean Economic Community, which will boost demand to buy homes, both in Bangkok and the provinces, as foreign companies invest in the Kingdom as a gateway to other Asean countries, he explained.
Ananda Development president and CEO Chanond Reunkitiya, who agreed with a market-growth prediction of 5-10 per cent, said his company planned to launch 10 projects worth up to Bt22 billion this year.
Eight of the projects will be condominiums – four of them developed by a joint venture with its Japanese partner, Mitsui Fudosan – and the other two will comprise detached housing.
Residential prices edging up
Housing prices this year are also showing signs of increasing, by an estimated 2-5 per cent, following rising land costs, but this is dependent on the location, property experts said.
“In some locations, residential prices will be maintained because of high competition and supply exceeding demand, while in others, prices will rise when supply is lower than demand and the price of land is going up,” Thai Condominium Association president Prasert Taedullayasatit told The Nation.
Prasert, who is also managing director of Pruksa’s condominium department, said new residential projects launched this year would generally feature higher prices than last year, when compared size by size, location by location.
However, residential inventory launched over the past two years will maintain last year’s prices because those projects were developed at the prevailing cost at the time, he added.
Residential projects located close to both existing mass-transit routes and those scheduled to commence operations this year, such as the Purple Line from Bang Sue to Bang Yai, have already showed signs of prices increasing by between 2 per cent and 5 per cent, the MD said.
CB Richard Ellis (Thailand) managing director Aliwassa Pathnadabutr said luxury condominiums in the central business districts (CBDs) of Bangkok looked likely to increase from an average price of Bt300,000 per square metre at the end of last year to Bt350,000 per square metre for new launches this year, as well as for existing projects still on the market.
This is due to the limited amount of land available for the development of luxury homes, as well as CBD land prices rising.
According to a survey by the Real Estate Information Centre, residential prices increased by between 2.3 per cent and 5 per cent last year.
The survey shows that condominiums priced up to Bt50,000 per square metre recorded a price rise averaging 3.3 per cent, those priced Bt50,001-Bt80,000 per square metre showed an increase of 4.4 per cent, those in the Bt80,001-Bt120,000 range rose 6 per cent, while those costing Bt120,001 and above increased 4 per cent.
Meanwhile, detached houses saw prices rising 2.2 per cent in Bangkok, and by 2.3 per cent in the suburbs, while townhouse prices increased by 3 per cent and 3.1 per cent, respectively, the centre found.
Source: The Nation – 8 Janruary 2016