Condo developer Grand Unity Development Co, a subsidiary of SET-listed Univentures Plc (UV), plans to delay the launch of its mid-priced condominium project to the middle of next year, replacing it with a luxury building to tap into the growing high-end market.
Managing director Siripong Srisawangwong said the upper-end condo market is stronger than the mid- to lower-priced segments, with higher growth and greater demand.
"The condo market is growing for units priced higher than 100,000 baht per square metre," he said. "After next year's general elections, we will launch the mid-priced condo project we planned because economic sentiment is likely to be better."
Banks' mortgage lending rules for high-end condo buyers are also less strict than for lower-end buyers.
As most of the company's condo units were in the lower-end segment, priced below 100,000 baht per sq m or around 2-3 million baht a unit, the bank mortgage rejection rate surged to 15% from 6% two years ago.
The mid-priced project postponed until next year is Denim Chatuchak, worth 4 billion baht, to be located on Phahon Yothin Soi 18.
Unit prices will range from 80,000-90,000 baht per sq m, a price segment the company expects to resume next year.
Instead, a high-end condo project worth 2.8 billion baht will be launched, with units priced over 250,000 baht per sq m, a segment where purchasing power is stronger.
This project will be located on a plot slightly larger than one rai on Sathon Road near Sathon Soi 12 where Double A Book Tower is located.
As a result, total sales value of new condo projects Grand Unity plans to launch this year will reduce from 11.9 billion baht estimated earlier to 10.7 billion baht. The presales target has also been cut from 10 billion baht to 7 billion.
During the first eight months this year, Grand Unity posted 5.8 billion baht in presales, compared with 2.9 billion for the whole of 2017.
Presales for the first eight months were 2.8 billion baht from two new condo projects worth a combined 5 billion launched in the first half. About 3 billion baht was from completed, unsold condo units, said Mr Siripong.
The company had less than 1,000 completed condo units worth around 3 billion baht remaining for sale, down from a peak of 5.7 billion baht a year ago.
Of this amount, 400-500 units worth 1.5 billion baht are at five projects completed more than two years ago.
Next month Grand Unity will launch a new condo project, Mazarine Ratchayothin, worth 2.9 billion baht.
The project is located on a plot sized almost four rai near a future skytrain system at Ratchayothin, comprising 476 units priced from 4.2 million baht.