Trinity Securities Company Limited stated in the analysis that It is expected that the performance of the real estate sector in the 4th quarter of 2022 can still grow compared to the previous quarter. And compared to the same period last year from the high backlog, both low-rise projects that were gradually launched during the 11 months of 2022 and newly completed condominiums ready to transfer. It is expected that AP, SIRI, LH and SPALI will continue to perform well.
Presales and transfers in Q4/2022 are expected to come from higher demand following various measures will end on December 31, 2022, for example, the cancellation of the LTV relaxation measures as the BOT views that the Thai economy has slowed down. The trend of recovery is clearer and more comprehensive. while the real estate sector tends to continue to improve both sides of supply and demand which will return to use the original lending criteria
Therefore, the cancellation of such measures It is expected to have a positive effect on sales and transfers in the fourth quarter of 2022 in order to keep up with the same criteria. But it will be negative for the sentiment of the real estate market from 2023 onwards, since during the period from 20 Oct. 21 to 31 Dec. 22, the LTV measure is relaxed, allowing 100% housing loans for all levels. price and all contracts And when returning to the same measures, it will affect sales and transfers from the year 23 onwards.
Because the buyer must be ready in more financial position. Because it can borrow at a ratio from 100% to 70%-90% for housing prices higher than 10 million baht and groups with more than 1 mortgage contract by developers with houses priced at 2-5 million. The baht is expected to be more affected due to high credit-dependent and high-denial groups (including LPN and PSH).
However, we believe developers with a high proportion of cash customers and high-end customers will have lower rejection rates and be less affected by the cancellation of the LTV waiver. We expect around 7 new project launches in 4Q22. Ten billion baht, the proportion of low-rise projects at 75% and condos at 25%
for the launch of a new project in 2022 According to the latest AREA report during the month of Nov. ’22 There were 382 new real estate projects launched, an increase of 3% compared to the same period last year. The total number of units sold was 116,701 units, an increase of 25% compared to the same period last year. And the project value increased by 58,238 million baht, a 21% growth compared to the same period last year.
by launching a new project in November 2022 have the main proportion (From the number of units) in the price range of 1-2 million baht, there are 6,635 units (40%), and the second is in the price range of 2-3 million baht, with 4,506 units (27%), but the group with the opening sale value. The highest was the group with a price over 5 million baht with a project value of 15,504 million baht or 31% of the total value of new properties launched this month. But there is a sales rate or Take Up rate that has weakened from October ’22
However, information from REIC expects that in 2022 there will be new housing launches only in the metropolitan area of regarding 96,803 units worth 508,264 million baht, an increase of 87.9% compared to the same period last year and 132.1% compared to the same period last year according to respectively, divided into horizontal residential projects of 49,492 units worth 336,008 million baht and condo projects of 47,311 units worth 172,256 million baht and it is expected that there will be regarding 373,253 residential ownership transfers worth 997,471 million baht, an increase of 8.59% compared to the period and 5.61% compared to the same period last year, respectively, representing the transfer of 279,447 units of horizontal projects and the transfer of condo ownership of 93,806 units.
As for the year 66, the positive and negative factors were mixed. Transfers and net profits of the real estate sector are expected to grow continuously. But it is growing at a lower rate than in 2022 due to several factors depressing the overall market, including:
1. Cancellation of LTV relief measures that are expected to affect loan decision Since the second loan contract onwards can be borrowed at 70-90% from the original that might borrow 100% during the relief measures.
2. According to the cabinet resolution on December 20, 2022, the property transfer registration fee was reduced from 2% to 1%, which was previously reduced to 0.01%, resulting in developers and customers having a burden. The expenses slightly increased, however, the real estate mortgage registration fee was still reduced from 1 percent to 0.01 percent (only for the transfer and mortgage at the same time).
For residential purchases, including single houses, twin houses, row houses, commercial buildings and condominiums (both first-hand and second-hand houses), only with the purchase price and the appraisal price not exceeding 3 million baht and the mortgage amount not exceeding 3 million baht per contract This does not include the case of selling only parts from the date the law comes into force until December 31, 2023.
3. The increase in interest rates Affecting the interest burden from housing loans, putting pressure on Purchasing Power and Demand for housing purchases and higher Cost of Debt, affecting Developer’s profitability.
4. Inflation and higher minimum wages Resulting in higher construction costs, putting pressure on Gross Margin.
5.Backlog of condo projects decreased compared to the same period last year Because in the past 3 years, each developer has launched less new condo projects than the historical average, while ANAN and QH have not launched new condo projects. As a result, condos are newly completed and ready to be transferred in 2023.
Positive Factors Promote Growth
1. According to the resolution of the cabinet on December 20, 2022, the tax rate was reduced by 15 percent of the calculated tax amount. For the land tax collection of the tax year 2023 that will help reduce the cost burden of both buyers and developers who have a land bank waiting to be developed.
2. The return of foreigners will help boost purchases in condo groups whose demand has disappeared for 3 years.
3. The launch of new projects in 2023 is expected to grow with Single Digit. It is expected that AP, SIRI and SPALI will launch new projects that are more aggressive than the group because they have been able to increase market share in the past 3 years.
4. It is expected that the use of pricing and promotion to increase sales and transfers will decrease compared to 64-65 years, resulting in higher margins.
Real estate stocks are currently trading at an average P/E of 8.5x, which is 10x lower than the impartial average. Selective Buy is recommended from developers with profit growth. And continue to do new highs, namely AP (Thailand) Public Company Limited or AP, Sansiri Public Company Limited or SIRI, and developers with good dividend payments, namely Land and Houses Public Company Limited. ) or LH and Supalai Public Company Limited or SPALI