Home builders expect recovery in second half

Home-builders expect to see a market recovery in the second half of this year, after enduring a 50-per-cent contraction in the second quarter, Home Builder Association president Vibul Chantradilokrat said in an interview with The Nation last week.

The new-home market grew by 10 per cent in the first quarter, Vibul said, but was hurt by the red-shirt demonstrations from early March to late May, which reduced confidence among those considering buying a newly built home. As a result, the overall market for new homes dropped by more than 50 per cent during the period.

“We are seeing demand return to the market in June, but that will not be enough to save the overall performance in the second quarter,” he said.

But with the good signs that are emerging this month – and provided the country’s political situation remains stable until the end of this year – Vibul believed that the home-builder market will recover and achieve its 2010 projection of 10-per-cent growth to Bt12 billion, from last year’s Bt11 billion.

To support market growth in the second half, the association will stage the Home Builder 2010 show on August 18-22 at Queen Sirikij National Convention Center.

“We expect to see sales growth as a result of this event,” he said.

Seacon Home Co general manager Supitcha Chaipipat said the company’s sales dropped nearly 50 per cent in and April and May due to the political violence, which prevented most customers from visited its premises on Surawong Road, not far from where much of the conflict unfolded. Most potential customers delayed their decisions to build residences during the period, Supitcha said.

The company was, however, able to meet its sales target of Bt550 million to Bt600 million for the first half of the year, thanks to unexpectedly high growth in the first quarter.

This month, the company has seen the return of many customers who delayed decisions to build, to sign contracts and visit its office. As a result, the group, which comprises units Seacon Home and Compact Home, has maintained its full-year sales target at Bt1.25 billion, Supitcha said.

Royal House Co managing director Sakda Kovisut said the company’s sales for the first half of the year have met its estimates. Strong growth in the first quarter have balanced out a drop of more than 70 per cent in the second quarter due to the political violence, Sakda said.

The company has maintained its sales target of nearly Bt1 billion for the year, he said.

Four Pattana Group’s managing director, Pramote Teerakul, said the firm’s sales dropped more than 70 per cent in April and May, but said the market has shown recovery signs in June. Revenue currently stands at about 40 per cent of its estimate for the year of Bt615 million, Pramote said.

However, company officials are confident of achieving the targeted total revenue of Bt615 million by the end of this year, banking on the firm’s Golden Week event to be held from July 1-18 at its head office on Lad Pra Klow Soi 10 and its participation in the Home Builder 2010 event in August.

“We expect sales of Bt200 million from the Golden Week event,” Pramote said.