Signs of improvement lead to launch of new projects

Quattro Luxury Condominium

Quattro Luxury Condominium

The top 10 property developers in the Thai market are preparing to launch new residential projects worth more than Bt30 billion as they glimpse what some believe are the first signs of improvement in home-buyer confidence.

A survey by The Nation last week found that Sansiri will launch 11 new residential projects with a market value of Bt15 billion. One has been launched already and another 10 will follow this week. Preuksa Real Estate plans to launch eight new residential projects worth Bt5.9 billion this month, LPN Development will launch the second phase of a condominium project at Ram-Indra-Laksi worth Bt850 million this week, and Land & Houses plans to launch three new residential projects worth Bt3 billion this month.

Asian Property Development will launch only one project worth Bt660 million this month, but that is the first part of an 11-project campaign for later in the year that will have an ultimate value of Bt17.7 billion. Supalai launched its first condominium project, with a market value of Bt1.7 billion, last month.

Other property firms that are not listed on the Stock Exchange of Thailand are also joining the rash of residential project launches with developments collectively worth more than Bt5 billion. These include Pace Development, which launched a luxury condominium project, Saladaeng Residences, worth Bt2.5 billion, last month. Four Pattana will also launch Baan Busaba, worth Bt200 million, this week.

Sansiri’s chairman Apichart Chutrakul said that although Thailand’s economy had slumped following the global downturn, his company believed that demand still existed for residential projects priced between Bt3 million and more than Bt5 million.

“I think this is a good time for home-buyers to be buying a residence - when most property developers have launched marketing campaigns to boost their sales in the first quarter,” he said.

Sansiri is aiming for presales of residential properties worth Bt5.5 billion before the end of this month, following presale bookings of residences worth Bt2.5 billion after the January launch of its luxury condominium, Quattro. It will boost its chances of meeting the target by launching Living in Style 2009, at Siam Paragon this weekend.

Supalai’s deputy managing director Atip Bichanond said his company believed that despite the economic slowdown, real demand for residential projects priced between Bt1 million and Bt3 million would continue to grow if the projects were designed to meet customers’ needs.

“We’ve seen good signs in the first two months of this year. The number of visitors to our residential projects has increased about 10 per cent since the last quarter of last year, when the number of visitors fell more than 50 per cent below normal. As a result, we believe that when we launch new projects at this time, we will create a feeling of confidence among our customers and in the overall property market, that things are better than in the last quarter of last year,” he said.

It’s a feeling with which others in the industry concur. Preuksa Real Estate’s chief executive and managing director Thongma Vijitpongpun said that in the first two months of 2009, the property market had shown significant recovery from the fourth quarter of 2008, thanks to the government’s stimulus measures.

Thongma said his company had recorded presales of properties worth Bt955 million in January 2009, up by 19 per cent over the value of Bt800 million in December. The presales pace increased last month, with customers signing up for properties worth Bt1.3 billion, a 38-per-cent increase over January. This shows that home-buyers’ confidence is recovering, Thongma said.

“In December, we had 2,500 visitors to our projects, and between 22 and 23 per cent of them made a decision to buy. Now, we’re getting between 3,000 and 3,500 visitors to our projects per month, and between 25 and 26 per cent of them are deciding to buy. This is a good sign for the property market after the hard time in December last year,” he said.

Pace Development’s chief executive Sorapot Techakraisri said that although the economy would grow only slightly this year, the company believed it was a good time for investors to be getting into residential property.

“If investors save their money in the bank or invest it on the Stock Exchange of Thailand, they will get returns on investment lower than 5 per cent. But when they invest in property, they will get an asset that will generate an annual return on investment of between 7 and 10 per cent. This is better than other investment options,” he said. Saladaeng Residences is the company’s second condominium project. The first was successfully developed on Sukhumvit 44/1 in 2004.

According to a survey by the Agency for Real Estate Affairs (Area), there were 14 new residential projects launched in January with a total market value of Bt17.25 billion. That showed an increase of 113 per cent over the Bt9-billion value of new projects launched in December.

The research showed that new projects launched in January focused on the middle-income market, with prices between Bt2 million and Bt3 million per unit.

About the author

Somluck Srimalee Somluck Srimalee
Somluck Srimalee is a journalist with The Nation, Bangkok's independent English language newspaper and specialises in the property and real estate sectors.
Other posts by Somluck Srimalee ( 39 )

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