Homebuyers can shop around at their leisure as residential prices should remain stable for the rest of this year, since building material suppliers are facing weak consumer purchasing power and high market competition.
Most suppliers say that although oil prices and interest rates are going up, they still have to shoulder the higher costs because they cannot pass them onto their customers. Housing demand in the market is flat or growing only slightly in some segments while competition is ruthless.
Jatuphat Tangkaravakoon, managing director of TOA Paint (Thailand) Co, said yesterday that the company has had to leave its painting product prices unchanged although rising oil prices have driven its production costs up by 5-10 per cent.
“We revised up our prices on average 10 per cent early this year. That has to continue to cover our rising costs,” he said.
The company would not consider any more price hikes till the fourth quarter of this year, he said.
The company’s sales in the first five months were on track to achieving the target of 10 per cent for the whole year even though demand in the overall market was soft, he said.
Tanasak Sakrikanont, marketing manager of Siam Sanitaryware Industry, a subsidiary of SCG, which produces under the Cotto brand, said the company’s sales in the first five months still expanded 15 per cent on year.
The company’s production costs have continued to rise along with the increases in oil prices but the company did not lift its prices because of the stiff competition from imports, especially from China, which undercut domestic products by 10-20 per cent.
The company has to maintain its product prices to compete in the market and ensure that its business keeps growing at 15-20 per cent. About 35 per cent of its total sales comes from exports, he added.
Pramote Theerakul, managing director of Fourpattana Co, a homebuilder, said the company did not revise its pricing even though the construction raw material price index edged up 2.2 per cent in the first five months.
“We cannot increase our home prices even though our costs are inflating because the market faces high competition and demand to build homes priced at Bt5 million-Bt10 million, which is the our main customer target, dropped slightly by 5 per cent. That forces us to maintain our prices,” he said.
However, the company has tried to drive the market by launching a home series under the concept of green house. It will also hold a marketing campaign called “Fourpattana Golden Week” from June 22-27 at CentralWorld in the hope to seal contracts worth Bt200 million from this event.
These efforts are expected to boost its sales to Bt605 million this year after it booke sales of Bt200 million in the first five months.
The campaign will offer gold, discounts, free furniture and other rewards depending on the residential type for visitors who sign a contract to build a residence at the event, he added.