Developers urged to shift to more affordable housing

Residential developers need to build housing units that are more affordable for the majority of homebuyers as their budget is smaller during the economic downturn, says SET-listed Sena Development Plc.

Deputy chief executive Kessara Thanyalakpark said one trend postpandemic will definitely be a decrease in consumer wealth.

“Demand for houses will remain, but their budget will fall as the sluggish economy hits everyone,” she said. “Developers should seek ways to develop units many homebuyers can afford.”

Ms Kessara said the property sector correlates to the economy. During poor sentiment, the market will see heavy discounts.

In the second half, the property market will depend on buyer confidence, which is taking less time than in the past to resume, attributed to the faster spread of information and news.

“Thailand ranked among the top five countries in dealing with the virus spread,” she said. “If we can continue controlling the spread as more economic activities reopen, priming the economy remains the only concern.”

Ms Kessara does not believe there will be a radical change in the residential sector, unlike the great floods of 2011 that abruptly changed many people’s thoughts about Pathum Thani.

“That year the province was inundated and many people thought it was no longer a good location to live in or buy a house,” she said. “One year later, everything resumed as normal. The housing market in Pathum Thani was active as usual.”

Ms Kessara said in the third quarter the company will revise its 2020 presales and revenue targets, following the delay of launching a few of its condo projects until next year.

In the first quarter, Sena’s presales dropped 17.7% to 1.5 billion baht. Sena will not launch new projects in the second quarter, shifting to the second half with a focus on low-rise houses.

She said the company will also boost sales of inventory worth 25 billion baht. Of this amount, 6 billion baht worth are units ready to transfer.

Work from home will continue as a normal activity, said Ms Kessara.

To deal with concern over higher electricity bills, Sena plans to introduce solar-rooftop townhouses priced 2-3 million baht, in addition to the single detached houses it currently sells, she said. The solar townhouse project will be in Lam Luk Ka Khlong 6, Pathum Thani, launched in mid-2020.

“Solar homes will become our standard to help boost sales in the second half,” said Ms Kessara.

She said the company can survive a struggling market for two years by maintaining liquidity and controlling costs.