Condos face fierce Q4 competition

Condos face fierce Q4 competition

An artist's conception of Lumpini Selected Sutthisan-Saphan Khwai, scheduled to be completed in November, with 170 units remaining out of 389.
An artist's conception of Lumpini Selected Sutthisan-Saphan Khwai, scheduled to be completed in November, with 170 units remaining out of 389.

Condo buyers should shop around before making a decision because a large number of unsold completed units are being offered at below their presale prices, says SET-listed LPN Development Plc.

Chief executive Opas Sripayak said some projects are offering units at 15% less than their pre-sale level or prices during their launch period a few years ago, as developers are eager to clear supply.

Many condo projects launched earlier and completed this year have a lot of units unsold because they were overpriced or offered specifications buyers might not need, he said.

"Those projects wanted to draw buyers' interest and drive sales by adding features that were beyond basic needs," Mr Opas said. "But doing so came with higher prices target buyers were sometimes unable to afford."

In the lower-end segment of units priced 50,000 baht per square metre, for instance, some projects offered higher ceilings than the usual 2.4 m in units to tease buyers, he said.

Some features, like Olympic-size or infinity-edge swimming pools, hot tubs and waterfalls, may be unwanted by target buyers.

These extra features hike selling prices by up to 50%, compared with usual specs, said Mr Opas.

"Buyers should consider whether they have a chance to regularly use those extra features in weighing the price," he said. "They should not rely on their emotions to make a decision as there are a lot of choices on offer."

Condos may be overpriced because of high land prices, which rose more than 10% per year in some locations.

Increases in people's income and economic growth cannot keep up with the rate of land price hikes, said Mr Opas.

He said competition in the condo market in the fourth quarter will be very fierce.

Many ready-to-transfer, completed projects with a large number of unsold units are offering heavy discounts.

LPN has about 4,000 completed condo units remaining unsold, worth a combined 8 billion baht. Of this amount, 500 units worth 1 billion baht will be offered with discounts by the end of this month.

It expects those units to sell out by the year-end and aims to have 5 billion baht in revenue in the last quarter.

Revenue in 2019 will total 11 billion baht, comprising 7.5 billion from condos, 2.5 billion from single houses and townhouses, and 1 billion from services and rents.

The company plans to spend 150 million baht to introduce a new concept -- better balance -- to educate consumers on choosing a dream home that fits their lifestyle.

LPN shares closed unchanged on Thursday on the SET at 5.05 baht in trade worth 20.1 million baht.

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