Posted on 04 Feb 2009
The prices of most construction raw materials have begun to stabilise this year. The exception is steel, which is forecast to fall by 7.4 per cent this quarter from the end-2008 level, said Pramote Theerakul, managing director of home-builder Four Pattana.
He said the first indications of falling prices had come in the final quarter of last year, following average increases of 10.16 per cent in the first nine months of the year.
According to a survey by Four Pattana, construction materials fell by 3.4 per cent last month from the end-September level.
The price of construction steel, however, is predicted to drop by nearly 7.4 per cent in the first quarter of this year due to shrinking global demand.
Given this market trend, Pramote said the cost of building houses this year is likely to be about same as last year's level.
However, demand for newly built residences has continued to drop this year, with estimates of total market value at only Bt52.4 billion - 3.8 per cent lower than last year's estimated Bt54.5 billion.
However, the market share accounted for by members of the Homebuilder Association is expected to increase from 18 per cent (Bt9.8 billion) to 20 per cent (Bt10.4 billion). This is because the association promotes its members' quality and ability to deliver homes on time, compared with small and medium-sized contractors, he said.
One of the market leaders, Four Pattana targets revenue growth of 24 per cent to Bt610 million this year, from last year's Bt491 million.
Pramote said Bt365 million of the target would come from Four Pattana's operations, with the remaining Bt245 million coming from subsidiaries and its latest residential project, Baan Busaba, which will be launched next month.
The company has four subsidiaries: Four Develop House, which develops homes priced between Bt2.5 million and Bt5 million; Four Pattana Interior; Four Pattana Colour Line, which is in the advertising and print business: and its latest unit, Fourextra Build, which will construct commercial buildings, residences and serviced apartments following customer's designs.
"Our revenue from home-building this year will be nearly the same as last year, but our subsidiaries and the new residential project, Baan Busaba, will boost our sales growth to 24 per cent," Pramote said.
