Lalin focuses on low-rise developments for 2017

Lalin focuses on low-rise developments for 2017

Lalin chief executive Chaiyan Chakarakul says the property market will remain sluggish in 2017, with the economy heavily reliant on government spending.
Lalin chief executive Chaiyan Chakarakul says the property market will remain sluggish in 2017, with the economy heavily reliant on government spending.

SET-listed developer Lalin Property Plc plans to launch 8-10 housing projects worth a combined 4 billion baht in 2017, aiming to secure 15% growth in revenue to 3.1 billion baht by year-end.

Chief executive Chaiyan Chakarakul said all the new projects will be single-house and townhouse developments, as the low-rise segment consists of real demand, whereas condos have seen oversupply in many locations.

"This year will be another sluggish year like 2016, as the recovery of key economies like Europe and Japan will be weak," he said. "The growth engine for the Thai economy will be government spending."

Lalin expects to have 3.6 billion baht in presales this year, up from 3.5 billion baht last year, which rose from 2.6 billion baht in 2015. It aims to have 3.1 billion baht in revenue, up from 2.7 billion baht in 2016 and 2 billion baht in 2015.

To achieve the target, it will launch only low-rise projects and in locations where demand is strong, like eastern provinces including Chon Buri, Chachoengsao and Rayong. About 30% of the new launches will be in provinces.

"It will be good if the government uses property incentives once again, but not only to stimulate sales. The government should also urge mortgage lending release," Mr Chaiyan said.

He suggested a reduction of the blacklist period for people who defaulted on credit card debt from three years to one year, similar to how the blacklist period for bankruptcy was reduced from 10 years to three years.

He said mortgage rejections were a key obstruction to housing transfers last year.

However, the company will continue to provide assistance for its customers who faced bank rejections.

It asked customers to pay down payment to Lalin, which is around 5-10% of unit price over a period of 3-6 months and uses this record to apply for mortgages with banks.

The company aims to reduce the bank rejection rate from 20-25% last year to 15-20% this year.

He added that the property market will grow 3-5%, with a growth of 5% in low-rise house market and 3% growth in condo supply, even though the supply of condos along mass transit lines will take require a longer period for absorption.

Before launching new sites, developers should do market research to products that accurately matches demand, Mr Chaiyan advises. They should also accelerate housing inventory to turn it into cash and build a good cash flow during sluggish economic times.

LALIN shares closed yesterday on the Stock Exchange of Thailand at 4.76 baht, up 16 satang, in trade worth 7.6 million baht.

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