Property launches abandoned due to double-digit drops in revenue

[webfact]

Property launches abandoned due to double-digit drops in revenue

By Somluck Srimalee
The Nation

 

Bangkok’s Central Business District (File Photo: The Nation )

 

Listed property firms have revised down their new resident project launches for the rest of this year, as the market is expected to continue to drop through 2019, Terdsak Taweethiratham, vice president at Asia Plus Securities Co Ltd, said on Friday.

 

He said that 16 property listed companies in the Stock Exchange of Thailand (SET) had revise down their business plans to launch residential projects. The previous 290 projects worth Bt440 billion in this year have been down-sized to 237 projects worth Bt370 billion, a drop of 53 projects worth Bt70 billion. The market has continued to drop after the Bank of Thailand restricted approvals for loan to value or LTV effective on April 1, 2019.

 

He added that total revenues for the 16 listed property companies in the SET have signed to drop in the second quarter of this year, and are also continuing to drop in the third quarter of this year as demand in the market drops.

 

In the last quarter of the year 2018, 16 listed property companies recorded total revenue of Bt81.55 billion, while the first quarter of 2019 reported Bt65.46 billion, a 19.7 per cent drop.

 

Furthermore, the total revenue has been reported at Bt49.83 billion for the second quarter of 2019, a 23.87 per cent plunge from the first quarter of this year.

 

“They show their total revenue has dropped since the first quarter of this year till the second quarter of this year [after also dropping] from the last quarter of last year. They also have continued to have signed to drop in the third and the fourth quarters of this year. This is the reason that most of them have revised down the launching of their new residential projects in the rest of this year and tried to sell their inventory in the market,” Terdsak said.

 

Meanwhile, in the first half of this year 16 listed property firms recorded a total backlog of Bt330 billion for units that are already sold but are awaiting transfer when the projects are completed. Of them, up to Bt40 billion are low-rise residences, including single detached houses and townhouses, while the next Bt158 billion are condominium projects that the firms developed by themselves, with the next Bt132 billion comprised condos developed through joint venture firms with their foreign partners. Some of them will be completed and transferred over the course of this year, with the rest transferred in 2020 to 2022.

 

“When combined with the new projects launched in this year, we forecast all of them will take time to sell over the next two years [even if there are] no new products launched in the market. If they have more new projects launched, it will take a term longer than two years [to sell],” Terdsak said.

 

The Real Estate Information Centre’s acting director-general, Wichai Virataphan, said the centre forecasts that new transfers of residential projects in this year will drop by up to 7.7 per cent in term of units and drop 2.7 per cent in terms of value in the condominium market. He attributes the impact to the LTV measure that reduced the purchasing power of buyers in the middle and lower income markets.

 

Source: https://www.nationthailand.com/property/30376474

 

-- © Copyright The Nation Thailand 2019-09-20

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[quandow]

Ferchrissake, there are already SO many vacant condos yet they're building more like there's no tomorrow. I guess the Chinese "ghost towns" have run their course so now they're going to try the same here. There are literally HUNDREDS of units going up within a 1 kilometer radius of my place.

[hotchilli]

21 hours ago, webfact said:

He added that total revenues for the 16 listed property companies in the SET have signed to drop in the second quarter of this year, and are also continuing to drop in the third quarter of this year as demand in the market drops.

Can anyone else hear a bubble pop?

[Cadbury]

1 hour ago, hotchilli said:

Can anyone else hear a bubble pop?

Do recessions make a popping noise, housing bubbles certainly do. Some commentators are of the opinion the noise will be a lot louder than a pop.

Many economists have been commenting on a global recession which would certainly include Thailand even though the government might think they are teflon coated and that their military based economic skills are superior to all others forms of economics. The PM's much vaunted Eastern Economic Corridor could wither on the vine.

This government's administration is built around the SNAFU system of management which might get by in the good times. But if things get ugly the wheels could soon fall off.