Property Firms Crunch Into Bitter Pill
Asia Plus Securities senior executive director Therdsak Thaveeteeratham said financial consequences in the third quarter of property firms programmed in the stock exchange will be well again compared to the same period in 2007. Though, the third quarter act will be lower than the second quarter in 2008 as homebuyers are holding up their resolution to purchase residential projects, worried about their upcoming earnings once the global economic calamity hits Thailand's financial system.
As per the research by Asia Plus Securities, 6 out of 12 property firms will declare lower net profits of about 12 %- 62 % in the third quarter of 2008 compared to the second quarter of 2008. Preuksa Real Estate will keep its net profit in the third quarter similar to that of the second quarter of 2008.
"We predict that their net earnings in the third quarter will be poorer than the second quarter as nearly all recorded presales in the third quarter of 2008 is lower than the second quarter of 2008. For the time being, demand for residential projects has decreased considerably, even though the government may choose to extend its tax incentive time limit for property from March 28, 2009 to March 28, 2010," he said.
He further declared that 31 property firms had confirmed presales of Bt28.12 billion in the second quarter of 2008, a decrease from Bt30 billion in the first quarter of 2008.
The company also predicts that their presales in the third quarter will be approximately Bt25.8 billion, an 8% fall from the second quarter of 2008. That reveals the government tax incentive was not sufficient to encourage home purchasers if they were worried about their upcoming earnings. This will affect economic consequences in the third quarter of 2008 and may have an effect on the last quarter of 2008 when the country's ongoing political insecurity and the global economic hold back start to hit the Thai financial system.
Labels: Property Firms, real estate, residential projects
