Prices of residential property will increase by 4-6 per cent next year on higher land and construction costs, Pruksa CEO and Real Estate president Thongma Vijitpongpun said.
He said he was confident that the property market would recover in 2015, estimating growth of 10-15 per cent compared with this year, which looks like dropping by 10 per cent compared with 2013.
Pruksa expects its business to grow less than 7 per cent this year but targets growth of up to 25 per cent in 2015, he said.
“We are confident that the property market will recover in 2015 when the government’s Bt3.3-trillion infrastructure plan kicks off, with initial expenditure of at least Bt700 billion. This will boost household revenue and purchasing power will return to the market,” he said.
He added that approach of the Asean Economic Community would also boost demand for homes upcountry, especially in border provinces such as Chiang Rai, Mae Hong Song, Udon Thani and Songkhla. The company plans to launch more new projects in places such as Hat Yai district in Songkhla, Surat Thani, Chiang Rai and Udon Thani next year.
Currently, the company is also developing residential projects in Bangkok, Chon Buri, Pattaya, Phuket, Chiang Mai and Khon Kaen.
Pruksa believes its revenue this year will achieve the targeted Bt42 billion, up 7.6 per cent from last year’s Bt39 billion. It recorded revenue of Bt30.37 billion and net profit of Bt4.77 billion in the first nine months, up 21 per cent and 34.9 per cent respectively from the same period last year.
However, the company also reported presales of only Bt31.33 billion in the first nine months, down by 7.2 per cent.
“Our presales were lower than estimated in the first nine months of this year following the market decline in the first half. It recovered in the third quarter, but was still lower than our estimation. However, we have maintained our 2014 presale target at Bt43 billion by launching 10 new residential projects worth Bt9.6 billion in the final quarter,” he said.
Pruksa launched 52 residential projects worth Bt48.7 billion in the first nine months of the year, so adding 10 more this quarter will total 62 projects worth Bt58.3 billion. This is lower than the early business plan to launch 72 projects worth up to Bt70 billion this year.
“We delayed launching some projects under our early business plan when the market dropped in the first half. As well, we have 180 projects, both new and existing, in place worth Bt77.99 billion to help us achieve our presale and revenue targets,” he said.
Credit: The Nation