16 April 2015 

KANANA KATHARANGSIPORN

Supply expected to balance with demand

Housing development sentiment for the first three quarters of this year remains bearish because of the economic slowdown, says a survey by the Real Estate Information Center.

The REIC's current situation index of housing developers fell to 52.2 in the first quarter of 2015 from 55.4 in last year's fourth quarter.

"Most developers slowed the launch of new projects in the first quarter," directorgeneral Samma Kitsin said. "But they plan to launch many new projects from the second quarter onwards."

The REIC surveyed 32 SET-listed developers and 136 non-listed companies. It gave both groups the same weight. A reading below 50 points is regarded as "no confidence". The current situation index of listed developers registered a 55 to nonlisted firms' 49.3.

Both groups voiced lower confidence in revenue, sales, investment, employment and new project launches.

The expectations index for the next six months fell to 64.8 points in the first quarter from 69.9 in last year's fourth.

The expectations index of listed firms registered a 71.7 to non-listed firms' 57.9.

"Listed firms with higher market share see improvement in the next six months, driven by progress in the infrastructure plan and budget disbursement," Mr Samma said.

"But they remain concerned about the world's weak and unstable economy, the country's political situation and household debt."

Neramit Srangiam, managing director of Grand Unity Development Co, said the property market in the second half would be stable as in the first half but improved relative to last year.

The condo developer usually evaluates the market situation by zone and location. Its weakest zone recently was Rattanathibet: despite proximity to the future Purple Line, the area had too much condo supply launched in the past few years.

"Our condo project on Rattanathibet Road was completed late last year but had a sales rate of only 60%, which was the lowest among our completed condo projects," Mr Neramit said.

The consultancy Nexus Property Marketing Co said condo supply in the Rattanathibet and Tiwanon area totalled 50,440 units, accounting for 13% of condo supply in Greater Bangkok, at the end of 2014.

The sales rate of all condos in the location, both completed and under construction, was 80%.

With a remaining supply of roughly 10,000 units available, Mr Neramit estimates it would take 18 months to absorb.

Issara Boonyoung, honorary president of the Housing Business Association, said the economic slowdown would cut the launch of new residential units this year by 30% from the 130,000 launched last year.

"It's good for the sector, as supply will balance with demand, which has been weak," he said

Source: BANGKOK POST