Home building business likely to grow despite economic slowdown

BANGKOK: -- The home building business this year is expected to grow close to that of the year before despite the economic slowdown due partly to a downward interest trend, according to an industry executive.

Sakda Kovisuthi, President of the Home Building Business Association, said the business had been affected by the country’s economic slowdown.

However, the impact was not as adverse as what the property business had suffered because a group of customers still had purchasing power and a rather stable financial position.

Most customers opted to build new houses in their own land plots. About 30-40 per cent of them borrowed money from commercial banks to finance the construction.

So, the purchasing power of these customers would not be adversely affected although the economy had slowed down.

Still, Mr. Sakda conceded the current economic sluggishness had an impact on home building companies which had just run the business for 1-5 years because their customer base is not broad enough.

At present, there are around 250 home building firms in Thailand.

He said the lower interest rates would contribute to the home building business growth since customers prefer to bring money deposited with banks with low returns to finance the construction of their houses.

At the same time, other customers, who borrowed money from banks, would have higher purchasing power.

A sale turnover of the home building business is expected to reach 8 billion baht this year. This, coupled with that of the contractor business, will bring up the total value to 26 billion baht close to that of the previous year.

--TNA 2007-03-14

Sakda Kovisuthi, President of the Home Building Business Association

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