Houses priced from B5m back in favour

       Houses priced higher than 5 million baht will dominate the homebuilding market next year as demand rises and purchasing power improves, said Suratchai Kuenghakit, vice-president of the Home Builder Association.
       More housing designs in the upper price range will also attract buyers, he said yesterday.
       From data the association collected at its last fair held in August, units priced above 5 million baht were more popular than other ranges. Sales in this segment doubled from 68 units in each of 2007 and 2008 to 138 units in 2009.
       At the same time, sales of units priced from 3-4 million baht baht increased to 94 units from 57 and 70 units in 2007 and 2008 respectively. Units priced at 2-3 million baht grew from 72 and 107 to 121 units in the latest fair.
       Mr Suratchai said the competition in the segment of more than 5 million baht would be focused on design with fewer wasteful materials. Usable area will have to meet consumer demand.
       The association yesterday projected an estimated homebuilding value of about 11 billion baht in 2009, up 12%from 2008 and higher than a previous target of 10.5 billion baht.
       But the number of units will decrease as average prices rise. From the fair, the average price rose from 4.2 million baht in 2008 to 4.7 million baht as brisk sales shifted from lower prices to higher ranges.
       The association also found that about 40% of 10,000 respondents in the fair plan to build a house in 2010. It targets 20% of these potential customers or about 2,000 units, and expects the homebuilding business will grow by 9-10% in 2010 due to an improving economy.
       The association's president, Panthep Thanchitikul, says opportunities are brighter as middle-income earners have more income, interest rates are low and buyers have more access to mortgage loans.
       "Financial institutions are more confident in homebuilding customers as they rarely become non-performing loans," he says.
       However, obstacles facing the business are consumers' higher expectations,negative impact from fraudulent home builders, volatile construction prices, lack of skilled labour and the political situation.
       Homebuilders should improve management systems and construction technology such as prefabrication, he said.They should compete on service and get together to help each other, says Mr Panthep whose term as president will expire on Nov 27.