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Pruksa Real Estate Control Speculation in Condo Projects

Pruksa Real Estate Control Speculation in Condo Projects Pruksa Real Estate Control Speculation in Condo Projects

Thailand Developer Pruksa Real Estate decide to taken steps to rein in speculative sales in its condominium projects by focusing on real demand for homes, the president and chief executive officer Thongma Vijitpongpun told the news. The developer's latest board meeting decided on a policy to restrict speculation by declining further sales when a customer has already signed up for five condo units, which means they almost certainly wish to sell the booking contracts on rather than have the units transferred in the future.

"Most home-buyers who purchase low-rise residences [detached and semi-detached houses, and townhouses] will buy to stay. But some condominium buyers, about 5 to 10 per cent, have bought to sell on quickly; this is higher than the 2011 level, as a result of which we now have a policy to manage speculation in the condominium market," he said.

When selling condos to speculators, if they cannot then find new buyers for the booking contracts, the company's business will be affected because it cannot transfer the property and generate sufficient income from the projects, he added.

This is why Pruksa has for the present decided to be selective about accepting customers when selling condo units.

"Although our projects will be sold out more slowly, the policy will make sure we sell our condominiums to real demand or investors with purchasing power to buy and transfer the units, rather than to speculators who only seek a profit from selling the booking contract. But this will mean some delay in getting money in the future," he said.

Last year's overall property market in Bangkok and its suburbs showed a volume of 110,876 units and a total value of Bt311.85 billion. Some 62 per cent of the volume, or 68,850 units, and 53 per cent of the value, was accounted for by condominiums.

HIGHER DIVIDEND

Pruksa recorded revenue of Bt27.14 billion and net profit of Bt3.89 billion for last year. Some 54 per cent or Bt14 billion of income was from townhouse projects, 32 per cent or Bt8.7 billion from detached housing, Bt2.8 billion or 10 per cent from condominiums, and 4 per cent from overseas investment.

After this impressive performance, the company will pay a dividend of Bt0.50 per share, compared with Bt0.40 in the previous year.

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