Analyst Expects “Baan Dee Mee Down” to Boost Property Developers’ Sales in 2019-20

Krungsri Securities (KSS) has stated in the analysis that it has positive view towards “Property Sector” in the Stock Exchange of Thailand (SET) as the stimulus package from the government has been approved by the cabinet to help with the down payment (Baan Dee Mee Down or Good House with Down Payment Project).

The government has approved measure to support house buyers who earn below Bt100,000 a month by offering up to Bt50,000 cash rebate for down payment. Registration is limited to 100,000 persons and for transactions completed between Nov 27, 2019 and Mar 31, 2020. Applications can be submitted after Dec 11. This would help to offset the burden of tighter LTV regulation.

Based on the qualifying income criteria and estimated mortgage value, applicants would be able to afford residential units priced up to Bt7m each. If we include the measure to exempt transaction fees, they would benefit residential units priced below Bt3m each the most.

Based on AREA data, about 100,000 residential units are sold annually. Moreover, unsold inventory is reportedly 152,000 units at the end of 1H19, and 88% of those units are priced below Bt7m each. Hence, the qualifying number of applicants would be large enough to have an impact on the overall industry.

 

In this regard, developers that would benefit most from this measure are those with the largest share of finished inventory priced below Bt3m each, and between Bt3m and Bt7m each. The three largest beneficiaries listed companies which fall into this category are AP (Thailand) Public Company Limited (AP), Supalai Public Company Limited (SPALI) and Ananda Development Public Company Limited (ANAN).