A number of Thailand’s leading property developers plan to launch residential projects focusing on the middle- to upper-income segment. The Bangkok Post claims the total value of projects launched in Thailand this year will likely be at least THB 274 billion with market growth of 5 per cent from last year’s level being predicted.
The decision to target the high-end market comes as developers in Thailand witness stronger demand here than in the lower-income end of the market. The lower-end segment continues to suffer from very tight criteria enforced by banks on the approval of mortgage applications which has made it difficult for buyers to acquire homes.
“We target boosting our premium-market sales to 20 per cent of our portfolio, from less than 10 per cent last year, after seeing demand in the middle- and upper-income market remaining strong when compared to the lower-income market, where prospective home-buyers still face a hard time getting a mortgage from the banks,” explains Pruksa Real Estate chief executive officer Thongma Vijitpongpun to local media.
Pruksa plans to launch four upscale condominium projects this year worth an estimated THB 10 billion. In addition to this, the company is also planning to launch more luxury detached housing in 2017 in order to keep up with demand in this segment. The company tells the Post that it expects sales value from the high-end market to account for at least 20 per cent of its sales for this year.
LPN Development is another developer to focus more on the mid- and upper-market condominiums in 2017 after 60 per cent of its customers in the lower-income market had their home-loan applications rejected by the banks towards the end of 2016.
“Our sales in the fourth quarter dropped more than 50 per cent compared with normal for the period, with sales of between THB 600 million and THB 700 million a month. As a result, our backlog of units ready for sale and waiting to be transferred to customers is only THB 3 billion,” says LPN managing director Opas Sripayak. “This has forced us to revise our business strategy by boosting sales this year via focusing on the middle- to upper-income market.”
