Kiatnakin Phatra Securities has likened the impact of the devastating March 28 Myanmar earthquake on the property sector to the disruptions caused by the Covid-19 lockdowns in early 2020.
The earthquake, which led to significant damage and loss of life, is expected to have a serious negative effect on presales in the first half of 2025, mirroring the Covid-19 crisis’ magnitude. Valuations are currently at a comparable level, with the residential property index price-to-earnings ratio (PER) at 6x, two standard deviations (SDs) below the historical mean.
The securities firm expects new launches and the Bank of Thailand temporary easing of Loan-to-Value (LTV) regulation to help in a gradual recovery of the sector in 2H25.
In the aftermath of the earthquake, aggregate new launch values from the top 10 listed developers are predicted to reach THB 36 billion for 2Q25, reflecting a 56% decline year-on-year and 21% quarter-on-quarter.
Presales sharply dropped around 40-80% in April, but bounced back somewhat in May, reaching levels between 25-50% below the first-quarter average. Forecasts suggest a gradual recovery, with estimated aggregate presales in June bringing the second-quarter total to THB 53 billion—a reduction of 18% YoY and 8% QoQ.
While YoY presales are broadly expected to weaken in 2Q25, Land and Houses PCL (SET: LH) and SC Asset Corporation PCL (SET: SC) are anticipated to show quarter-on-quarter growth, benefiting from low bases established in 1Q25. LH particularly may experience growth around 15-20%, and SC could see a 40% rise.
Despite these challenges, the risk to 2025 business plans remains moderate. Kiatnakin Phatra expects first-half 2025 aggregate presales to reach THB 110 billion, making up 42% of the companies’ full-year target of THB 264 billion, or 46% of the brokerage firm’s forecast at THB 261 billion. As such Kiatnakin Phatra the downside risk at a 10% of companies’ target.
Kiatnakin Phatra anticipated a total presale in 1H25 at around THB 110 billion, a decrease of 10% YoY, which seems to parallel the 10% YoY decline seen during the early Covid-19 lockdowns in 2020 (which saw aggregate presales of THB 109 billion during the period).
Looking to the second half of 2025, the presale recovery trajectory is expected to differ from that of 2020. During the pandemic overhang, new launches plunged by 19% YoY with aggregate presales slid 8% YoY. In 2H25 however, developers plan to launch THB 167 billion worth of projects, marking a 20% increase from the previous year despite risks of delay.
The property sector anticipates slight growth in aggregate presales, forecasting between THB 120-130 billion in the latter half of the year, with launch activities expected to exceed those of the first half.
With stable recovery expected in 2H25, Supalai PCL (SET: SPALI) remains a top pick due to its healthy balance sheet, standing out among developers poised to benefit from a gradual market rebound.
