Seacon sees potential to build more homes priced below B2m

Business News - Friday December 14, 2007

PROPERTY / REGULATION AND DEVELOPMENT

Seacon sees potential to build more homes priced below B2m

The home builder Seacon Group still foresees growth in the home-building market next year, with units under two million baht having strong potential, according to general manager Supitcha Chaipipat. The company estimated the total home-building market next year at 8.5 billion baht, up 6.25% from eight billion baht expected this year. The third quarter was successful, with 1.5 billion baht in sales recorded by members of the Home Builder Association.

Ms Supitcha said the overall market would improve next year after the Dec 23 election, especially in provincial markets, where over 90% of customers build their own units. However, a 3-10% rise in costs will force home builders to increase their prices next year by 5-10%.

Seacon Group believes the market for units below two million baht will expand the most. Price competition will likely ease next year, as consumers are well aware of the details on construction costs and designs and realise that their houses might never be completed if the prices are unrealistically low.

Ms Supitcha believes that builders will use more direct-marketing strategies as each company wants to build confidence among its customers.

According to the Home Builder Association's survey of 9,000 respondents, half plan to build houses within one to two years.

For the first 11 months of this year, Seacon recorded sales of 260 units worth around 700 million baht, up from 650 million baht last year. Its subsidiary, Compact Home, which targets the segment below two million baht, recorded sales of 80 units worth 110 million baht in its five-month operation.

The company will try to stimulate the market with services and value-added products in order to maintain its market share.

Bangkok Post