Despite an upward trend in the resale condo market, property consultant Plus Property Co expects sluggish revenue due mainly to a decreasing number of new condo projects being launched this year.
Mr Poomipak says buyers lack confidence because of the political situation.
Managing director Poomipak Julmanichoti said revenue will be similar to last year’s 790 million baht as the number of new condo projects being launched this year will decrease.
The fall in new projects is attributed to the prolonged political crisis and stricter rules being applied by financial institutions in relation to project loans.
This year, Plus Property will sign deals to manage sales for six new condo
projects with 3,000 units. Last year, it handled sales for seven condo projects with 3,200 units. Of this number, 63% were taken up.
“Since late last year, potential buyers of new condo supply have slowed down making decisions because they were not confident in the political situation. But if the conflict ends quickly, they are ready to resume,” Mr Poomipak said yesterday.
However, the resale condo market is on an upward trend due to the large number of new condo projects launched over the past four years.
In 2011, Plus Property recorded sales of 2.5 billion baht in the resale condo segment.
The figure rose to 3.1 billion baht from 580 units and 3.6 billion baht from 650 units in 2012 and 2013, respectively.
Most of the units sold were those aged 1-3 years old.
The company expects sales of 3.8 billion baht from 700 resale condo units this year.
Currently, it has about 8,000 resale condo units in stock, with 3,000 units active in the market.
Of the total stock, the largest number was from its parent firm Sansiri’s projects, which accounted for 40%.
Of the active resale condo supply, 60% were units priced 1-3 million baht, followed by 3-5 million baht (30%) and higher than 7 million baht (10%).
With an upward trend in the resale condo market, the company will launch an aggressive marketing strategy to boost resale condo units including through online channels, posting adverts in front of projects and coordinating with overseas property agents.
The large number of completed condo units launched in recent years also puts pressure on gross rental yield, which has dropped from 6% to 5% a year while the rental rate has stayed the same.
According to the company’s research, half of condo buyers at a project when construction is completed got units transferred for their own residence. About 30% rented them out and 20% left them vacant for either resale or renting.
Most of the units used by buyers as their own residence were priced 1-3 million baht a unit, while the majority of units for investment were priced 3-5 million baht.