Residential developer Frasers Property Home (Thailand) (FPH) is focusing on high-priced segments for new launches and will adjust product prices at existing projects to cope with the market slowdown.
Somboon Wasinchutchawal, the company's acting chief executive, said the residential market in the first half had deteriorated from last year, largely attributed to high interest rates, which rose several times in 2023.
"The impact was evident in the performance of many large developers in the first quarter, with many recording a drop," he said. "This sentiment may carry over into the second half as there are no signs of imminent interest rate reductions."
High interest rates affect not only units priced 3-5 million baht, but also the 5 to 7-million-baht pool, which registered a bank mortgage rejection rate of 35%, said Mr Somboon.
"Some homebuyers changed their decision after being approved for a mortgage as they realised they could not afford the monthly instalment payments," he said.
In the second half, FPH will continue launching new projects of single detached houses priced at 20 million baht and above per unit. Mr Somboon said demand in this segment remains strong, despite the sluggish economy and residential market slowdown.
FPH will also expand price coverage at existing projects, both shifting up and down. At projects where units are priced between 10-17 million baht, it will introduce smaller unit sizes priced at 7-8 million baht and larger ones priced at 20 million baht.
Projects where it plans to implement the new strategy include those on Rama II Road and in the Rangsit area.
With this strategy, the company aims to increase sales growth from the current 150-200 million baht per project per year to 250-300 million baht.
While home demand in Greater Bangkok often fluctuates, demand in the provinces is more stable.
Among the nine provinces where FPH has low-rise housing projects, Udon Thani, Khon Kaen and Nakhon Ratchasima have shown the most robust sales.
Last weekend, it launched a low-rise housing project in Rayong, with units priced between 5-7 million baht.
This was its first project in the province and recorded 100 million baht in sales within the first seven days, which was a strong performance.
"We haven't launched any new townhouse projects with units priced 3-5 million baht for over a year as sales shrank by more than half," Mr Somboon said.
"We plan to resume new launches next year, but not because the market is improving. It's because our inventory is depleted."