As mortgage curbs and a weaker economy vague, the outlook for Bangkok’s once-booming condominium market, forcing leading Thai residential developer to scaling back its objectives for new projects this year.
Deputy Chief Executive Officer from Sena Development Pcl, Kessara Thanyalakpark said in an interview, Sena Development expects to start marketing 13 residential projects worth about 10 billion baht ($313 million) in 2019, but would have preferred to launch more if economy permits.
She also added that all the undesirable news about property and the economy steered us to be more cautious. There’s been a shift to focus more on the quality of new buyers rather than quantity, to avoid people who abandon purchases or struggle to get mortgages.
Sena Development still expects earnings growth of about 20 percent in 2019, as sales of older projects complete. A partnership with Japan’s Hankyu Hanshin Properties Corp, to develop condominiums in Bangkok will be the major contributor to earnings growth in the next few years, said Kessara.
Sena’s shares have dropped 6 percent in the past three months, versus the 11 percent decline in the Thai Property Development Index.
Government Housing Bank, Thailand’s top mortgage lender, sees sales of new houses and condominiums in the capital dropping 13 percent this year.
The Bank of Thailand, which raised its benchmark interest rate for the first time since 2011 in December, will also impose stricter mortgage-lending rules from April to tame speculation. Trade-dependent Thailand’s economic growth slowed in the third quarter and the U.S.-China trade war threatens to sap the expansion this year too.
Credit : Bloomberg