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[ 2015-03-23 ]

BOT's lower GDP growth forecast unlikely to affect property sector, companies say

The Bank of Thailand's Monetary Policy Committee (MPC) now expects gross domestic product this year to grow by 3.8 per cent, lower than its previous forecast of 4 per cent. But it stuck with its growth forecast of 3.9 per cent for 2016.

Chainid Adhyanasakul, chief executive of Property Perfect, said the downward revision was not outside his earlier expectation of GDP growth this year of between 3.5 and 4 per cent.

"What the government should do to boost the economy is to solve the problem of high household debts, which is a major cause of the decline in purchasing power. The government should also rapidly raise the salaries for civil servants, as already approved by the Cabinet," he said.

He added that on the demand side, the government should increase the tax deductions given to low-income earners.

Siam City Cement adviser Chantana Sukhumanont said the MPC's lower growth forecast would not have a significant impact on the company's business. She said the company's early estimation of this year's GDP growth was only 3 per cent, so the MPC's new figure of 3.8 per cent was still optimistic in comparison.

Pruksa not affected by rate cut

Pruksa Real Estate managing director Prasert Taedullayasatit, who is also president of the Thai Condominium Association, said Pruksa's revenue-growth target of 15-20 per cent had been based on a GDP growth forecast of 3.5-4 per cent. Therefore, the MPC's revised prediction is still within Pruksa's estimation, is not a surprise and will have no impact on its business plan.

Issara Boonyoung, honorary president of the Housing Business Association, said the MPC revision would have no significant direct impact on overall business. However, this is one of the things businesses consider when they make or adjust their investment plans.

"Our firm will continue to follow our existing business plan because real demand for homes is still growing, as proved from our sales in the first two months of this year," said Issara, who is also CEO of Kanda Group.

However, Thanawat Poonsilp, adviser to the Songkhla Real Estate Association, said residential sales in Hat Yai this year were so far not as good as they were three years ago. Real-estate firms have been delaying the launch of new projects since last year because of waning purchasing power.

He estimated that purchasing power had dropped by 50 per cent, and sales in Hat Yai had dropped accordingly. He believes this is due to ebbing confidence in the economy and declining incomes. The falling rubber price has had an impact on the incomes of people in Songkhla province. Banks are also being much more cautious in providing mortgages.

According to a survey by the Real Estate Information Centre conducted from September to December last year in seven northern provinces, there were 6,200 unsold units out of 14,900 in 145 housing projects in eight major districts of Chiang Mai. The value of the unsold units was Bt24 billion.

There were 3,100 unsold condominium unites in the province out of a total of 8,400 units in 59 projects. The value of the unsold units was Bt10.1 billion.
 
THE NATION March 23, 2015 1:00 am
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