If last year had started to unpick the threads of Thailand’s property market, the novel coronavirus has blown a hole right through its fabric.
The country was already reeling from oversupply, flagging sales, and dwindling Chinese demand when the pandemic hit— and things have taken a turn for the worse.
From mid-March to April, there have been no new condominium launches in Bangkok. Projects due to be launched are postponed to the last quarter of the year, while many sales offices have closed as staff work from home.
As Suphin Mechuchep, managing director of JLL Thailand, puts it: “All of the core property sectors have been affected by the outbreak in one way or another.”
“In March, the outbreak of Covid-19 was especially severe, resulting in a decrease in the number of people visiting projects,” reports Risinee Sarikaputra, director of research at Knight Frank Thailand.
From its initial forecast of 20,000 units, Knight Frank Thailand expects around 11,000 to 12,000 units to come on the market by the end of the year.
Beyond the decrease in new condominium sales, Risinee says “concerns remain about the number of condominium transfers for completed projects that are ready to be turned over this year amid the nationwide lockdown.”
A similar trend is playing out in secondary markets. The pandemic’s impact on travel and tourism has slashed both domestic and foreign demand for holiday homes—a key segment in coastal hotspots like Phuket and Hua Hin.
“Along with most expat agents here, I deal with foreign buyers. With no international flights coming in, there haven’t been any sales happening,” says Russ Downing, managing director of Hot Hua Hin, which does business in real estate and publishing.
The pandemic is accelerating a trend that already started last year, effectively putting an end to Thailand’s years of strong growth and brisk sales.
COMMUTERS GET A LIFELINE
Residents living to the west of the Chao Praya River in Bangkok need not feel isolated from the city centre anymore after the metro system completed its 28-kilometre extension of the Blue Line.
The extension will make the Blue Line the first circular line in Bangkok and is expected to make for a more connected city with new opportunities for development. Construction is underway on five other metro lines. Once completed by 2025, as expected, these will connect midtown and suburban areas of Bangkok to the Blue Line.
The metro’s development will create new business districts and other hubs of activity, especially at interchange stations, which will give valuable opportunities for property developments in the near future, says Pakapon Utaobin, an analyst at Research and Consulting, CBRE Thailand.
“The expansion of the mass transit network will change how Bangkokians live, work and play, and Bangkok will become a more defined city with each corner of the city connected to another by at least one mass transit line,” says Pakapon.
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