Sena Development Plc, a leading residential developer, is scaling back its ambitions for new projects this year, as mortgage curbs and a weaker economy dim the outlook for Bangkok’s once-booming condominium market.
The company expects to start marketing 13 residential projects worth about 10 billion baht in 2019, but would have preferred to launch more, deputy CEO Kessara Thanyalakpark said in an interview Friday.
"All the negative news about property and the economy led us to be more cautious," Mrs Kessara said. "There’s been a shift to focus more on the quality of new buyers rather than quantity, to avoid people who abandon purchases or struggle to get mortgages."
Parts of Bangkok's home market have already started slowing, with builders forced to rely more on foreigners for business, according to CBRE Group Inc. State-owned Government Housing Bank sees sales of new houses and condominiums in the capital dropping 13% this year. Property markets have cooled around Asia, from Sydney to Mumbai.
The Bank of Thailand, which raised its benchmark interest rate for the first time since 2011 in December, will impose stricter mortgage-lending rules from April to tame speculation. The economy slowed in the third quarter and the US-China trade war threatens to sap the expansion this year too.
Sena Development still expects earnings growth of about 20% this year, as sales of older projects complete. A partnership with Japan’s Hankyu Hanshin Properties Corp to develop condominiums in Bangkok will be the major contributor to earnings growth in the next few years, said Mrs Kessara.
Sena’s shares have dropped 6% in the past three months, versus the 11% decline in the Thai Property Development Index.