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Wary of high-end housing market, QH keeps lower-tier focus

By on Jun 08, 2012 in Property News

Listed developer Quality Houses Plc (QH) will stay focused on middle-market and low-end customers, foreseeing a struggle for the high-end segment to recover.

Suwanna Buddhaprasart, director and senior executive vice-president, said the high-end market is expected to remain sluggish, as homebuyers in the segment remain concerned about repeat flooding and unfavourable economic conditions in Europe.

But high-end housing will improve in the second half if consumer worries about new flooding are soothed.

“We still have to closely monitor the local political situation,” said Mrs Suwanna.

“It was clear that political unrest during the past 2-3 years severely affected many businesses including property. The most-hit sector was hotels.”

The euro-zone financial crisis cannot be overlooked, said Mrs Suwanna. A worsening situation would affect the whole world.

She also noted a rise in prices for building materials.

Combining this with the daily minimum wage hike to 300 baht, QH’s operating costs are set to rise by 7-8%.

“This prompts us to raise selling prices for our residential units by 5-8%, depending on location and market conditions,” she said.

This year, QH will launch 23 projects worth a combined 26.7 billion baht.

They include 12 detached-house estates in which high-end projects are worth 2.85 billion baht, mid-priced ones 11.9 billion and low-end ones 1.32 billion; seven townhouse projects for the middle and low brackets; and four high-end condos worth 4.56 billion baht.

The company expects revenue to rise 30% from 10 billion baht last year. The major revenue contributors are four condo projects _ Trust Pinklao, Q Langsuan, Casa Lat Phrao and Casa Sukhumvit 97.

Trust Pinklao will finish construction in the third quarter, and ownership transfers will be made then.

This year’s net profit is forecast to surge by 50% from 853 million baht last year.

If a 3-billion-baht property fund can be set up in the third quarter, then full-year net profit should grow better than projected.

Source : Bangkok Post 7 June 12

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