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Thai developers revising strategies after a drop in Q2

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Thai developers revising strategies after a drop in Q2 | The Thaiger

Some of Thailand’s largest property developers have reported drops in revenue and profit in Q2 2019. The slump follows commercial banks in Thailand reining in loan approvals in response to a new loan-to-value regulation that took effect on April 1.

• AP (Thailand) reported total Q2 revenue of 4.8 billion baht, down 25.9% compared to last year’s 6.48 billion baht, and net profit of 488 million baht, down 59.3%.

• LPN Development Q2 revenue was 1.67 billion baht, a drop of 26.8%, and profit of 176.73 million baht, for a 29.3% decline.

• SC Asset Corporation’s revenue was 3.49 billion baht, down 10.5%, and profit 282 million baht, a 37.3 % drop.

• Ananda Development reported Q2 revenue at 2.03 billion baht, down 15.4%, and profit at 119 million baht, down 79.6%.

• Pruksa Holdings reported 7.8 billion baht in revenue, down 28.4%, and 932 million baht profit, down 40.3%.

• Property Perfect reported its revenue at 4.3 billion baht, down 8.5%, but its Q2 net profit was 471.46 million baht, up 208.1% from the same period last year.

Other firms reported strong first-half growth, however, thanks to solid performances in Q1, when homebuyers rushed to beat the new bank LTV deadline.

Pruksa’s deputy chief executive Supattra Paopiamsap says that the overall market in metropolitan Bangkok dropped 13% in the first half of 2019, compared to the same period last year. Property ownership transfers between April and May fell 24%, she reported, showing a clear market slowdown.

But Pruksa still plans to launch a further 26 new residential projects in 2019, lowering its target for the year from 55 projects to 40.

Other firms have also revised 2019 project launch forecasts due to the market swings. Ananda Development has suspended its 10-billion condominium project Ideo Q Phahon-Saphankhwai and will refund buyers’ down payments received since April.

SOURCE: The Nation

Thai developers revising strategies after a drop in Q2 | News by The Thaiger

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Bangkok

Hong Kong’s protests have been good for Bangkok’s luxury condo market

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Hong Kong’s protests have been good for Bangkok’s luxury condo market | The Thaiger

High end Hong Kong investment is turning away from the Chinese business hub and looking outside for new investment opportunities.

Thailand’s high-end luxury condo market has been one of the beneficiaries.

Keerin Chutumstid, from the Bangkok-based Magnolia Quality Development, says about 40% of the condos in a 52 storey Bangkok luxury tower development that opened last week have already been sold to buyers from mainland China, Hong Kong, Taiwan and Singapore. Among those, mainland Chinese and Hong Buyers are the top foreign customers.

The new luxury tower on the Chao Phraya River has 146 units, which are managed by 5 star managers Mandarin Oriental Hotel Group. Prices start at 65 million baht (US$2.9 million) and go up to 533 million baht for the larger penthouses.

Keerim says that the protests give them an advantage for the project.

“If you look at Thailand right now, compared to other countries, we have a good level of political stability.”

Meanwhile, Thailand leading property portal FazWaz says there has been a noticeable surge of enquiries in the past few months. CEO Brennan Campbell says a lot of the new interest is coming out of Hong Kong and Mainland China….

“FazWaz has noted an influx of investment inquiries over the past two months. The city’s high-end market offers some of the best condominium properties in the world at prices still well below other mature property markets. We’re also seeing a lot more inquiries into the medium-level condo market from 6-15 million baht as well as for the ultra-luxury market over 35 million baht.”

Last week, Hong Kong’s CK Asset Holdings and Sun Hung Kai Properties decided to postpone sales of new multi-billion-dollar projects, and transactions in the secondary market are down sharply, especially for luxury homes. The slump follows two months of protracted and often violent street protests by Hong Kong’s pro-democracy movement.

It’s believed that the circumstance could add another tailwind to the luxury market in Bangkok, where the last decade’s tourism boom has put the city on the map for investors, especially mainland Chinese who have buying up big.

Bangkok real estate has also been attractive to international investors because, even after years of gains, prices are still often cheaper than in less travelled-to cities such as Jakarta, Kuala Lumpur, or Vietnam’s Ho Chi Minh City.

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Phuket

Palang Pracharath MP chastises Karon Police for not offering protection during condo visit

The Thaiger

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Palang Pracharath MP chastises Karon Police for not offering protection during condo visit | The Thaiger

VIDEO & SCREENGRAB: M Today

The Palang Pracharath member of parliament from Bangkok, Sira Jenjaka, had an argument with Lt Col Pratuang Polmana, Deputy Superintendent of Karon Police during his inspection to the controversial Peak Condominium in the Karon area of Phuket.

MP Sira was surveying the construction site of the project and the sales office, which also serves as a coffee shop, where he saw Lt Col Pratuang inside.

He stopped there and asked why the Deputy Superintendent didn’t send any officer from Karon Police Station to provide security for him, a standard protocol when parliament members visit a specific area.

The MP had publicly stated he had received death threats for revealing ‘problems’ with the ‘paperwork’ for the Phuket condo project that he claims has been built on land without the proper documentation.

Lt Col Pratuang said that he already prepared a team of officers to provide security for the MP but they were waiting for a confirmation. Then the MP asked his team to record a video of the conversation and said that, while he was not threatening anyone, he believed the police must respect and offer protection for a government MP who comes to work in the area, which was then followed by an argument.

There was a “middleman” who eventually separated the Deputy Superintendent and pulled him aside to calm him down. The ‘police whisperer’ then came back to apologise to the MP before they went inside the coffee shop for further private talks.

Read the original article about the allegations against Peak Condominiums in Karon HERE.

Palang Pracharath MP chastises Karon Police for not offering protection during condo visit | News by The Thaiger

The Peak Condominiums in Karon, currently under investigation after allegations made by Government MP Sira Jenjaka, who claims death threats have been made against him over the matter.

 

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Business

Bank of Thailand relaxes Loan to Value to boost sluggish property market

The Thaiger & The Nation

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Bank of Thailand relaxes Loan to Value to boost sluggish property market | The Thaiger

PHOTO: booking.com

The Bank of Thailand says it will relax the Loan to Value (LTV) for homebuyers purchasing residences together and that borrowers or co-borrowers applying for a loan under the first home buyers rule and who do not own any other residence would be given a 90% mortgage on a condominium and 95% for a single detached house and townhouse.

The “co-borrower” is defined as a borrower supporting the family in its bid to obtain a mortgage to buy a residence but who will not become the owner of that residence.

Issara Boonyoung, CEO of Kanda Group, chairman of Business Housing Association, says he’s in favour of relaxing the LTV.

“We believe that the relaxation of the LTV in relation to co-borrowers will see the property market improve by up to two per cent for the rest of this year. This market represents about 20% of the total property market value, which is expected to be worth about 760 billion baht this year.”

He added that the relaxing of the rule will open the opportunity for co-borrowers to make a down payment of about 10% for condominium and 5% for single detached house and townhouse under the LTV first home concept.

The transfer of residences on hold this year has continued to drop and currently stands at 7%, which is better than the early estimates of 10%.

The LTV, which became effective on April 1, 2019, resulted in a drop in the property market in the second quarter of this year, as most homebuyers sped up the transfers of their residential projects and completed them in the first quarter. This had a direct impact on the financial results of property firms, with most announcing a double-digit drop in the second quarter.

SOURCE: The Nation

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