Property developer Asset Wise Co will focus on developing condos priced lower than 2 million baht a unit as the new loan-to-value (LTV) limits weaken the purchasing power of some buyers.
Chief executive Kromchet Vipanpong said some condo buyers will be required by the new lending curbs to make a higher down payment, making them consider cheaper units even though they could afford more.
"Buyers have the same budget to purchase a condo as before, but some must make a higher down payment as required by the new LTV limits," he said. "This means opportunity for lower-priced condos."
The company will continue launching condo projects with units priced below 2 million baht, which Asset Wise sees as the ceiling for the mass market.
Although many developers have bemoaned that buyers in this segment have a higher mortgage rejection rate than those in the upper end, Mr Kromchet said the new LTV limits will help screen buyers who are confident of their payment ability.
This condo segment should have fewer competitors as large developers shift to single-house and townhouse development this year to avoid the slowing condo market, which is suffering from a glut, he said.
"Some are busy clearing their condo inventory, which can be quite large," Mr Kromchet said.
This year Asset Wise plans to launch seven new projects worth a combined 8.8 billion baht, of which 60% will be units priced below 2 million baht.
Kromchet Vipanpong, chief executive of property developer Asset Wise Co,
The seven include five condo projects in the Rangsit area near Bangkok University, on Chaeng Watthana Road, on Ratchadaphisek Soi 32, in Bang Pho and at a new location.
Two projects have townhouses priced from 10 million baht a unit at two locations: Pattanakarn Soi 32 and Lat Phrao Soi 41. They will be joint ventures with Baan Puripuri Co, a townhouse developer in the Lat Phrao area.
Asset Wise aims to have 7.3 billion baht in presales and 4.2 billion baht in revenue, up from 6 billion baht and 4.1 billion baht in 2018.
The company is preparing to list on the Stock Exchange of Thailand and expects to file papers with the Securities and Exchange Commission later this year, with Asia Plus Securities as financial adviser.
"Our main objective in listing is not to raise funds," Mr Kromchet said. "We aim to set a standard and a system to improve our organisation and performance when the company grows."
But getting funds at a lower financial cost can boost the company's capacity to buy a large plot of land to develop a mixed-use project, he said.
Last year, Asset Wise spent more than 1 billion baht to acquire a 60-rai plot on Phahon Yothin Road in the Rangsit area near Bangkok University Rangsit Campus. The plan is to develop condo projects, a community mall, a sports village and residential projects on the plot.
Phase one of the condo with 1,073 units worth 2 billion baht was launched last November and recorded 70% of units sold so far.
Phase two with the same amount and sales value was launched earlier this month and had 10% of units sold.
"We are confident about the location where demand is from both investment buyers buying for rent and students, as our first project opposite the university sold out in a month and all units were transferred to buyers since its completion last November," Mr Kromchet said.
Units at that project had a rental yield of 8-10% per year with a rental rate of 10,000-17,000 baht per month. Unit price at the launch period was 1.5 million baht for 23 square metres.
"Room to develop condo supply in this location is large because there are about 20,000 students at Bangkok University Rangsit Campus each year," Mr Kromchet said. "Condo supply is around 3,000 units."
On the 60-rai Rangsit plot, the company will spend 50 million baht each to develop a three-storey community mall with a lettable area of 2,700 sq m on five rai in front of the condo projects and a sports village inside.