Pruksa aims for 10% hike in revenue

Pruksa aims for 10% hike in revenue

Relaxed loan rules lift market sentiment

Residential developer Pruksa Real Estate aims for a 10% growth in revenue this year and 20% in 2022 as the relaxation of lending curbs will improve market sentiment.

Piya Prayong, chief executive of Pruksa Real Estate, a subsidiary of SET-listed Pruksa Holding Plc, said the relaxation had a psychological effect on homebuyers' sentiment as the number of visitors to project sites rose and mortgage rejection rates declined.

"After it was announced last month, many financial institutions relaxed their mortgage loan criterion," he said. "This can help revive the housing market in the fourth quarter and in 2022."

Pruksa expected to transfer residential units worth a combined 12 billion baht in the fourth quarter of 2021 despite challenges like the weak economy, low purchasing power in the middle-to low-end segment and high household debt.

In the first nine months, it recorded 19.2 billion baht in revenue, down 2% from the same period last year.

Third quarter revenue dropped 6% to 5.97 billion baht due largely to the third wave of the pandemic while first half revenue rose 16%.

It aimed to have 32 billion baht in revenue by the end of 2021, up 9.4% from 2021, before growing nearly 20% in 2022 to 35.2 billion baht, driven by low-rise houses.

Presales in the first nine months of the year grew by 24% to 20 billion baht, while 28 billion baht is projected by the end of 2021, up 27% from 21.9 billion baht last year.

From January to September, overall residential presales in Greater Bangkok totalled 223.6 billion baht, up 7% year-on-year.

The key driver was the single detached house segment which recorded growth of 30% to 97.14 billion baht.

Townhouses saw a decline of 3% to 50.98 billion baht and condos dropped 7% to 72.5 billion baht, according to Pruksa's market research.

Inventory of single detached houses faced the largest drop with a 10% year-on-year decrease to 49,136 units, as of September. Those for condos and townhouses declined by 8% and 7% to 81,886 and 69,577 units, respectively.

Housing transfers in Greater Bangkok totalled 247.97 billion baht, down 10% year-on-year.

Single detached houses had a 3% increase to 88.65 billion baht, while townhouses and condos dropped 10% and 18% to 48.73 billion baht and 105.8 billion baht, respectively.

"Low-rise houses continue to be robust, particularly single detached houses targeting those earning 40,000-200,000 baht per month," said Mr Piya. "We revised up new project launches this year from 29 to 31 projects."

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