Pruksa urges income boost for residents
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Pruksa urges income boost for residents

Move would increase property purchases

Uten Lohachitpitaks
Uten Lohachitpitaks

The new government should enhance people's income to make home purchases more accessible, though property measures may be unnecessary, says SET-listed developer Pruksa Holding.

Uten Lohachitpitaks, the group chief executive of Pruksa, said the company is concerned about the relatively high level of household debt in Thailand, with tackling it proving to be a challenge.

"High household debt cannot be easily resolved. It requires a boost of income and reduction of expenses," he said.

Mr Uten said measures from the new government such as lowering electricity bills would help to reduce expenses, while higher salaries and daily wages would increase income.

"Home demand continues to be impacted by negative factors including rising interest rates, standard loan-to-value limits, and stricter debt service ratio regulations. These factors have collectively diminished purchasing power for homes," Mr Uten said.

However, property incentives should not be applied as they were generally unfavourable for the market. They only accelerated growth to a certain level, said Mr Uten.

"Property incentives do not contribute to long-term industry strengthening. In reality, allowing the market to follow its own mechanisms and meet the demand for quality purchases would be a better approach," he added.

To minimise risks, Pruksa will diversify its portfolio, with one-third focusing on the premium market or upper-end segment, and two-thirds continuing to leverage the company's strength in the low-income segment.

In the second half of 2023, Pruksa will launch 17 new residential projects worth a combined 19 billion baht, of which 15 projects worth 13.5 billion baht will be low-rise houses and two sites worth 5.5 billion baht will be condos.

The company maintained its annual target of achieving 24 billion baht in presales and 28 billion baht in revenue from housing sales, even though it recorded 9.1 billion baht in presales and 11.7 billion baht in revenue from housing sales in the first half.

"We haven't revised the annual target since the majority of presales and revenue in the housing industry typically occur in the second half, accounting for about 60% of the annual total," Mr Uten said.

In the second quarter of 2023, Pruska's net profit grew by 141% year-on-year to 1.03 billion baht on revenue of 7.1 billion baht, which rose 32% from the same period of 2022.

It posted net profit of 1.69 billion baht and total revenue of 13.7 billion baht in the first half of the year, up 72% and 20%, respectively.

Excluding extra income of around 700 million baht from a stock swap of Inno Precast, one of the company's subsidiaries, to invest in the shares of General Engineering Plc, revenue in the second quarter grew by 19%.

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