Two Thailand property developers have reported what could be seen as worrying news, while another has sounded notes of caution in a media interview.
Stock Exchange of Thailand (SET) listed developers Pruksa and LPN Development both reported declines in earnings during 2017 citing poor market demand.
At the same time both have said they expect the market to pick up in 2018.
Pruksa’s revenue was down 6.5 percent year-on-year, with net profits declining by 8.1 percent over the same period.
This was the company’s second year of declines for both revenue and profit.
LPN’s revenue dropped by 34.17 percent in 2017, and net profit by a worrying 51.19 percent.
In its statement to the SET, LPN attributed its declines to a “slump in demand from buyers.”
Both Thailand property developers were reported to have adjusted their business models to focus on new market segments.
Despite these declines, both companies reported increased growth in presales. Pruksa saw a 7 percent growth in its presales while those at LPN rose by 50 percent.
It’s important to note the most of these presales will not be full-and-final sales, and buyers who have signed sales and purchase agreements will still be able to pull out of the sales process, for example if they are unable to obtain finance.
Elsewhere Tanyatip Chearavanont, the Chief Executive of 1.6 Development, the company behind a planned ultra-luxury project in Thonglor, said: “I think there is an oversupply of condominiums, but the ultra-luxury market is still growing.”
We agree the facts say there is oversupply in some markets, and in some locations throughout Bangkok.
But we respectfully disagree with the assertion that the ultra-luxury market is still growing. The facts published in recent research reports would suggest that the market is static at best.
This view is based on recent research reports seen by ThailandProperty.News.