This quarter is turning out to be one to forget for Origin Property as the company is likely to miss its revenue target for this year, local media reports. The reason for the missed target is due to buyers postponing unit transfers. An increase in mortgage rejection rates is another problem hurting developer’s bottom line.
Origin Chief Executive Peerapong Jaroon-ek points out that two of its condo projects were completed and ready to start unit transfers in October but buyers asked for a delay since the market outlook in Thailand has been disappointing this year.
“This situation has happened across the industry, not only to us,” he was quoted as saying by the Bangkok Post. “This year, many listed firms will miss revenue targets because the fourth quarter, which is the high season for the housing market, is sluggish.”
The developer was also hurt by the higher mortgage rejection rate that made it harder for homebuyers to obtain financing. The mortgage loan rejection rate came in at 12 to 15 per cent during the past two months. That total is up from 10 per cent that was recorded during the first half of the year.
“Loan criteria are getting stricter, such as outstanding mobile phone bills being taken into account,” Peerapong says. “But this issue is not serious. Banks just ask buyers to clear their bills before applying for mortgage loans again.”
While 2016 was one to forget, 2017 should be better as the company plans to launch 10 new projects valued at a total of THB 14 billion. Nine projects will be condos and the 10th will be a single house project. The Orange Line will be home to 2 of the condo projects while there will also be a low-rise development in the Sri Nakarin area.
“We will continue to focus on three segments from low-end to high-priced as the bank rejection will likely cool down next year after first-time car buyers are unlocked,” the Chief Executive adds.
