Areeya Property recorded an underwhelming 1st quarter with the strict criteria for approving home loans hurting its ability to transfer units to customers. The company still believes it will hit its 2017 revenue target of THB 6.4 billion even with the stuttering start to the year, local media outlets report.
“Although the country’s economic fundamentals remain strong, driven by the tourism sector and the government’s megaprojects, overall household debt remained high for the 1st quarter and financial institutions are still trying to cap their non-performing loans,” says Areeya Executive Director Viwat Lauhapoonrungsi to the Bangkok Post.
While the overall property market is starting to recover, sentiment hasn’t yet fully returned to normal. A lack of government measures to stimulate the market hurt a number of companies in the 1st quarter of this year.
During the 1st quarter of 2016, the government enacted a number of property stimulus measures such as cutting housing transfer fees and mortgage fees for six months. The incentives, which expired in April of 2016, helped boost the real estate market that had been struggling at the time.
Areeya is also trying to overcome the high number of housing loan rejections from banks that has hindered its attempts to complete deals, according to Viwat. The loan rejection rate in Thailand is estimated to be 40 per cent and this has the greatest impact on middle- and low-income buyers who have been unable to obtain financing.
The company’s presales in the 1st quarter came in at THB 2.21 billion, which was an 11 per cent increase from the same time last year. However, Areeya’s net profit for the quarter was down drastically, falling by almost 54 per cent from the same period last year.
Even with its performance struggling, the company still plans to launch 11 residential projects worth THB 24 billion in 2017 including 4 condo developments. It has already launched The AVA Residence on Sukhumvit 77 (imaged) and is set to unveil 4 low-rise projects in the 2nd quarter which it hopes will help turn around its performance.
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