Despite some impact from mortgage lending curbs on the high-rise market, Supalai Plc remains confident in condominium demand with the launch of a new riverside project worth 5 billion baht, expecting sales of one-fifth on the launch date.
Managing director Atip Bijanonda said the curbs had had a strong impact on the condominium market since late last year but the company believed demand was strong as condos remained a first choice for city living.
Lower loan-to-value ratios have had a minimal impact on new condominiums since buyers would be given sufficient time to make down payments. But they may be affecting unsold completed units.
The condo market in the second quarter would be stable or expand slightly, compared to the same period last year, due to strong demand.
“You won’t see a new condominium project sell out the same day it is launched like last year. There will be no more crowds of speculators buying many units at a project.”
The former president of the Thai Condominium Association estimated a sales rate of around 5,000 units a month for the overall market since early this year while Supalai sells around 300 units a month.
The sales rate was very close to the figures seen in the same period last year but during the first quarter of 2010, there were both positive factors, including the rush of buyers to make decisions before property tax incentives expired, and negative factors such as political turbulence.
The company’s sales from Jan 1 to mid-April totalled around 4 billion baht, almost on par with the same period last year, showing that Supalai’s performance tracked the market.
On April 29-30, the company will launch the 5.5-billion-baht Supalai Prima Riva on Rama III Road. The project has 871 units, 33 riverside units, 37 home offices and 16 shophouses.
Condominium unit sizes will start from 43 square metres, with prices from almost 60,000 baht per sq m. Construction is to be completed in 2014.
Mr Atip said the riverside condominium supply available in the location totalled around 1,000 units but most were in the lower-end segment. Its direct competitors total fewer than 100 units.
The company aims to achieve sales of 1 billion baht on the launch date and half of the project value by the end of the year. As of yesterday it had bookings worth 600 million baht.
“Riverside condominiums are a niche market, not affordable for everyone,” he said. “Developers should enter the market at the right time or the project may not succeed. However, if they enter too slowly, competitors will grab the demand.”
Supalai has developed four riverside projects with sales rates of 85-90% and 100 units remaining for sale. Around half of the sales are for primary residences, 25% as second homes and the rest for rent to expat executives.
As construction costs have risen since late last year, condo prices have increased by 10% and low-rise prices by 1-2% a month, he added.
SPALI shares closed yesterday on the Stock Exchange of Thailand at 11.10 baht, down 10 satang, in trade worth 82.8 million baht.
Source: Bangkok Post