Early property development plans for this year, along with the latest research, are showing that the lower and middle sectors of the market will dominate the industry in 2007, following last year's high competition in the middle to upper market.

Preuksa Real Estate announced yesterday that it would launch 23 projects this year, worth up to Bt20 billion. Half will focus on the middle to lower market, offering both town-house and condominium units for less than Bt1 million.

Last week, LPN Development announced it would build 14 new condominiums worth Bt2.4 billion on Ramkhamhaeng 43 under the concept of a small-sized township called "Lumpini Condo Town". The project will offer condominium units priced at Bt600,000 and will target buyers who currently rent their homes in Bangkok.

According to research by Plus Property, the property market will grow by up to 5 per cent this year, representing 66,000 detached houses, town houses and condos.

Main demand will continue to come from the middle market, for residences priced from Bt1 million to Bt5 million. Highest demand will be for detached houses between Bt3 million and Bt5 million, town houses between Bt1.5 million and Bt3 million, and condominium units ranging in price from less than Bt1 million to Bt2 million.

Preuksa Real Estate chief executive Thongma Vijitpongpun said that although demand for new housing will continue to grow this year, the New Year bomb blasts in Bangkok were having an effect. "Home-buyers are now delaying their decisions to buy because of the Bangkok bomb blasts, and they'll wait and see during the first quarter of the year," he said.

However, he believes that if the situation soon becomes stable, buyers will be ready to make their decisions to purchase, particularly in the lower to middle market.

Having considered the market trends, Preuksa will launch 24 new residential projects this year. Plots have already been obtained for 13 of them, and they will be launched in the first half of the year.

Negotiations are already under way for plots for the remaining 11 projects, for which sales are expected to open later in the year.

Preuksa's 2007 projects will be smaller in size than its projects over recent years. Town-house projects will offer units for Bt1 million-Bt2 million, while condos close to mass-transit routes will go for as little as Bt500,000.

"We will focus on middle-income home-seekers because this is a large, emerging market segment with high potential. Our business repositioning illustrates how flexible we are in adapting ourselves to cope with ever-changing market demand, especially in the current economic situation," Thongma said.

Preuksa expects sales of Bt10 billion this year after recording total sales of Bt8.15 billion in 2006.

LPN Development managing director Opas Sripratak said his company's research suggested demand for residences priced below Bt1 million would be strong this year, particularly from provincial workers moving to work in the capital. To rent a place to live in Bangkok will cost them about Bt3,000 per month, so LPN plans to launch its Lumpini Condo Town on Ramkhamhaeng 43 to focus on this market by offering condos priced at Bt600,000.

LPN also plans to diversify by launching town-house projects focused on the middle market. The first, on Ratchadaphisek Road, will cost Bt400 million. It will be managed by a subsidiary to be formed by LPN this quarter.

LPN will also launch three new condominium projects this year on Phaholyothin Road, Ratchada-Thapra and Narathiwat Road, offering prices between Bt1 million and Bt2 million per unit. It expects sales of Bt6.3 billion this year, up 26 per cent from its estimated sales of Bt5 billion in 2006.

Somluck Srimalee

The Nation