The expectations are that Thailand will see between 10-15% growth in its property market due to a recovery in homebuyers’ confidence. As a result, residential developers have revised their business plans and are due to launch additional projects in the second half of the year.
Up to 70% of possible homebuyers that visited Pruksa Real Estate’s residential projects in June decided to purchase a property. This was a vast improvement on the state of affairs in the earlier months of the year when only 30% of visitors were ready to commit to buying a property. The president and CEO recently said, “We have revised up our revenue target from Bt41 billion this year to Bt45 billion, thanks to the return of consumer confidence to the market after the coup.”
Following the National Council for Peace and Order (NCPO) rebooted state spending and appointed new members to the Board of Investment it has resulted in improved consumer confidence in the Thai economy. Construction and property development were one of the first sectors to become more active as Thailand’s banks started to see loan demand return.
As a result of this return of demand to the property market, Pruksa revised its business plan from launching 50 residential projects this year, worth Bt50 billion, to 60 projects worth up to Bt60 billion. Golden Land Property Development also extended its revenue targets from Bt2.19 billion to Bt3 billion for the year due to the renewed confidence of homebuyers.
This is in line with the property market in Hong Kong, where developers are planning to release commercial projects on improving market sentiment following strong residential sales in recent months, so it appears that this may be a new trend in the region as a whole.
LPN Development said it is planning to launch three condominium projects worth Bt7.4 billion, after seeing a recovery in demand and its managing director said, “We believe the property market will recover in the second half of the year. However, the overall market for the whole year will still drop by between 10 per cent and 15 per cent because it fell more than 30 per cent in the first five months of the year.”
Property Perfect CEO regards the recovery as due to political stability that has been established under the guidance of the NCPO. He also believes the their eventual approval of an economic road map regarding to investment infrastructure — such as the double-track rail system, MRT and Skytrain — will be a huge boost to property investment in 2015.