Even as its clients face a lower loan-rejection rate than the industry's average, the listed developer Supalai Plc remains concerned about tighter lending criteria for mortgage loans, which it views would weaken the residential market. The ailing economy and concerns about rising unemployment have prompted local financial institutions to become stricter in screening the qualifications of loan applicants, according to Supalai's deputy managing director Atip Bijanonda.

Some of the lending institutions have also taken into account the industries in which the applicants are serving or whether they are at risk of being laid off.

''Many homebuyers who fail to acquire mortgage-loan approvals from banks need to seek financial support from other sources,'' suggested Mr Atip.

Supalai last year recorded a mortgage-loan rejection rate of only 7% compared to the industry's average of 20%.

''Some of the developers whose clients face higher rejection rates generally misrepresent their marketing campaigns such as one-year free-stay programmes to draw customers' attention, despite the fact that they have never consulted the banks,'' he said.

However, Mr Atip added the government's new incentives would help boost the property sector, particularly among the middle-priced segment.

''The higher-priced segment will be difficult to sell, as most target buyers are foreigners who are currently reeling under negative impacts from the economic slowdown,'' he said.

Last year, the company recorded 9.3 billion baht in revenue from housing sales, rising by 26% from the year before. It generated another 100 million baht from rent from an office building on Rama III Road and a hotel in Phuket.

The company now has 1,500 complete units worth three billion baht for sale over the next three months. New units worth nine billion baht are under construction.

This year, the company planned to launch nine new residential projects worth a combined 15 billion baht. Seven projects would be located in the Greater Bangkok and two in Phuket. It would spend two billion baht for acquisition of new land plots this year to be developed in the future.

Mr Atip said its new development this year would be mainly mid-sized projects covering every Bangkok zone.

The company expected sales to grow by 7.5% this year.

''We need to be more cautious about spending on new land plots in face of the current economic uncertainties. Last year, we invested only two billion baht in new land plots despite an allocated budget of three billion baht,'' he said.

Supalai is scheduled to launch Supalai Park

source : www.bangkokpost.com