Cost push and economic growth will drive up the housing market this year in the middle and higher-end segments, says SET-listed developer and lower-priced market leader Pruksa Real Estate Plc (PS).
Chief business officer Prasert Taedullayasatit said soaring land prices and higher development costs will raise housing costs 10% this year in the segments.
Higher costs will lift the proportion of PS's new projects in these segments this year from 10-20% previously to 30%. Prices in these segments start from 3 million baht.
In 2013, PS will launch 78 new projects worth a combined 55 billion baht, while it aims for 35 billion baht in presales and 34 billion in revenue.
Mr Prasert said housing demand, which had been dominated by the mid to lower-end for the past couple of years, will shift up to the mid to higher-end segment as business owners are more confident in the economy and not worried about floods.
"The mid- to lower-end segment drove housing market growth last year due to the government's spending policies such as the minimum wage hike and the rice pledging scheme," he said.
The residential market in Greater Bangkok increased 22% by units and 20% by value last year. However, all low-rise housing categories dropped in unit numbers. Only condos gained, increasing 48% by units and 38% by value.
PS plans to launch a more expensive condo project this year with eight storeys on three rai on Soi Kasemsant 3 near the National Stadium skytrain station. It spent 400 million baht to buy the land. The project will have 200 units worth 1.6 billion baht, with units priced starting at 140,000 baht per sq m.
PS reported revenue yesterday of 27.14 billion baht in 2012 with a net profit of 3.89 billion baht, up 16% and 37% respectively from 2011. It also recorded 29.39 billion baht in presales in 2012, up 15%.
About 15 billion baht of revenue was from townhouse sales and 9 billion from single houses, representing rising consumer confidence after the 2011 floods.
The revenue proportion from the provinces also rose from 2% in 2011 to 4% last year, while that from overseas was 2% in both years.
As of the end of 2012, it had a sales backlog of 35.39 billion baht, with 25 billion slated to be realised this year.
PS shares closed yesterday on the SET at 32 baht, down 2 baht, in trade worth 405.67 million baht.
About the author
- Writer: Kanana Katharangsiporn
Position: Business Reporter