SET-listed developer Golden Land Property Development (GOLD) is continuing to launch projects in Bangkok and the provinces as planned despite gloomy market prospects and several risks.
President Thanapol Sirithanachai said the company will launch 23 new residential projects worth a combined 22.7 billion baht the rest of the year.
"Demand for duplexes and townhouses is strong, but mortgage rejections from banks remains high," he said. "Despite the high rejections, we will try to sell as many units as possible."
Mr Thanapol said 30% of the company's customers were rejected for home loans because the company does not use pre-screening. A rejection rate of 30% is normal because of high local household debt, he said.
The 23 projects will include two single-detached house projects, three duplex projects and 12 townhouse projects in Greater Bangkok.
Six low-rise projects are planned in the provinces.
Mr Thanapol said the new loan-to-value (LTV) limits are a key challenge this year, but should not affect the high-end single detached house segment.
"The LTV limit is a major concern. We are monitoring the effect on our target customers this quarter," he said.
"But we support this policy as it helps build financial discipline in homebuyers."
Other challenges include an economic slowdown as the US-China trade war impacts exports in some sectors.
In the provinces, purchasing power is stagnant as the prices of agricultural goods are flat.
"The property tax incentives have become anti-climactic as they are insufficient to boost the market," said Mr Thanapol.
"With unfavourable overall sentiment, the new government's policies are key to driving the economy."
Golden Land aims to have 14% revenue growth to 19.8 billion baht by the end of the year, comprising 18 billion from residential and 1.8 billion from commercial.
In the first quarter of 2019, Golden Land posted 657 million baht net profit on revenue of 4.88 billion baht, up 42% and 38%, respectively.
Of the amount, 4.4 billion baht was from residential sales and 489 million baht from rental properties.
In September 2019, the company is scheduled to complete construction of Triple Y Residence, a leasehold condo at mixed-used project Samyan Mitrtown.
Unit prices will start from 140,000 baht per square metre for a 30-year lease contract.
After opening presales in March 2019, the project had 32% units booked. To boost sales, Golden Land will revise the marketing plan to seek additional real demand as a leasehold condo is less attractive for some.
"Location is the key. If leasehold condos are in locations where supply is rare, they will be more attractive as prices are 30-40% lower than freehold units," said Mr Thanapol.
GOLD shares closed yesterday on the SET at 8.40 baht, up five satang, in trade worth 7.11 million baht.