Coronavirus outbreak shakes up Thai property sector

[webfact]

Coronavirus outbreak shakes up Thai property sector

By The Nation

 

 

The real estate market has become lethargic since the outbreak of the new coronavirus in China, taking a toll on the purchasing powers of Thais and Chinese buyers, industry experts said.

 

Property businesses were banking on the Chinese government successfully containing the epidemic in February or March and had hoped closing the country would not be an option.

 

However, the prolonging of the crisis into February has shaken up the Thai real estate market since Chinese customers were the main target group for property developers.

 

Apa Ataboonwongse, CEO at Richy Place 2002 Pcl and president of Thai Condominium Association, said that the members need to focus on Thai customers whose real demand is more than before. They should launch promotions in coordination with the government’s support measures including transaction fee reduction and lessening the strictness of the Loan to Value (LTV) stipulation.

 

Besides, the government has to extend the measures for the long term, seek more measures to help the real estate sector and propose new tax measures to stimulate the business to help the entrepreneurs move forward.

 

Although the baht has become weaker, the Bank of Thailand still has to invest Bt20 billion to keep the baht at Bt32 to the US dollar.

 

Meanwhile, entrepreneurs also have to resolve the situation by themselves by slowing down the launch of new condominium projects and looking for new markets, targeting Thai customers, focusing on low-rise development projects and keeping cash in hand.

 

However, if the location is good (near BTS Skytrain stations), a deal with around 10 per cent of Chinese customers -- down from 20 per cent at the beginning of 2020 -- would still be possible, Apa said.

 

In the future, there is a possibility that China would close the whole country, which might reduce to zero the number of Chinese customers, she said.

 

Surachet Kongcheep, managing director of Phoenix Property Development & Consultancy Co Ltd, said the solution would be to depend on national customers.

 

He said the most affected districts are Rama IX, Ratchadaphisek, Huai Khwang and Ramkhamhaeng where Chinese people live in Thailand.

 

Source: https://www.nationthailand.com/news/30381629

 

-- © Copyright The Nation Thailand 2020-02-05

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[hrrecruiter]

The perfect storm is forming to burst the RE bubble... Get your monies ready to buy at some deep discount. I feel really bad for people who paid full price and w the THB at 30/USD

[DrTuner]

Oh, nobody's buying condos to be used as illegal short time rentals for the Chinese, by the Chinese? Tough.

[Amber53]

Buyers will wait for the prices to sink !

[RotBenz8888]

55 minutes ago, webfact said:

zero the number of Chinese customers, she said.

Looooove it!????

[Titan1962]

I was renting a condo Kata phuket about 4 yrs ago

Before I moved out and headed to Chiang Mai,the owner asked if I wanted to purchase the condo less my 12 months rent.

I declined,but kept an eye on the property,4 yrs later he is still trying to sell the condo at 700,000 baht cheaper than the price he offered me.

Buying a condo in Thailand is a very long term proposition,not for making a few baht in the near future. I personally thought the property was a about 2 to 2.5 million baht overpriced.

One has to take into consideration the time left in one’s life,compared to the amount of money spent. Plus the uncertainty of Thai law regarding foreigners ability to stay here for that amount of time. If for some unforeseen circumstance and you needed to seek,you could lose a lot of cash.

 

[RichardColeman]

Up in Soi Khoa Noi they are building a gazillion new Choc Chai condos - they even built a three storey sales building catering to the Chinese. They were trafficking in the Chinese by the coachload a few weeks ago - now the odd taxi turns up. 

[Assurancetourix]

16 hours ago, webfact said:

The real estate market has become lethargic since the outbreak of the new coronavirus in China,

It is totally false;
too easy to put this on the back of the coronavirus;
but it's typical thai: always the fault of others, never its.
a few weeks ago there were posts on this forum on this subject;
Like what 25% of new housing built in Bangkok had not found buyers and that this magnifying bubble would soon explode ...

[RotBenz8888]

18 hours ago, Titan1962 said:

I was renting a condo Kata phuket about 4 yrs ago

Before I moved out and headed to Chiang Mai,the owner asked if I wanted to purchase the condo less my 12 months rent.

I declined,but kept an eye on the property,4 yrs later he is still trying to sell the condo at 700,000 baht cheaper than the price he offered me.

Buying a condo in Thailand is a very long term proposition,not for making a few baht in the near future. I personally thought the property was a about 2 to 2.5 million baht overpriced.

One has to take into consideration the time left in one’s life,compared to the amount of money spent. Plus the uncertainty of Thai law regarding foreigners ability to stay here for that amount of time. If for some unforeseen circumstance and you needed to seek,you could lose a lot of cash.

 

Don't forget potential lunatic neighbors, of which there are plenty. Noisy Chinese etc. It's a gamble.

 

[yokat]

Prices are still way too high, the market was already lethargic, let me know when things change.

[natway09]

Love it,,, now they have something to blame for putting all their eggs in one basket, encouraged by the present Government.

The glut of condos in Pattaya/Jomtiem is starting to show.

There are going to be some real bargains soon & cash will be king

[newnative]

       Perhaps the virus will serve as a wake-up call for some of the Bangkok developers who have gone insane with their pricing.  And, the insane pricing comes with a city that is heavily polluted some of the time, among other problems.  Examples are plenty to be found but here is one.

       My partner and I recently bought a 52 sqm 1 bedroom condo 150 meters from an MRT station in the center city.  We bought after selling our smaller 24 sqm Bangkok condo (at a profit) last year.  It's a nice unit, fully-furnished, on floor 37 with good views, and we paid 6MB.  The condo project was built in 2013 and is considered a luxury project--ample garage parking, sky library, sky lounge, sky garden, theater room, sauna, large pool, air-conditioned gym, big lobby, 5 elevators, putting green, yoga room, nice men's and women's locker rooms, etc.,  

      We looked at the 3 highrise projects that were closest to the MRT station that we wanted to be at and our project offered what we thought was the best value--and the room layout was the best, which is very important to us.  Our unit, for example, has 2 ways to get into the bathroom so guests don't need to go through the bedroom to get to the bath.  The bath also has a window, which is nice.  A separate laundry area off the kitchen and a larger than normal balcony were also pluses.  6MB seems very pricey to me for a smallish 1 bedroom, 1 bath condo but we wanted to be next to the MRT--our other Bangkok condo was 900 meters away and we found the walk too far after a long day out and about.

     Recently, a new 4th project adjacent to the MRT station has come on the market. It's definitely a bit closer to the MRT than our project--so they get to the MRT in maybe a minute vs. our 2 minute walk.  About the same bells and whistles as our project but with more glitz.  The pool is smaller but it's a sky pool vs. our larger pool on a lower floor; I'll take the bigger pool any day.  48 to 50 sqm units at the new project are going for around 14 to 15MB, with one listed at 17MB!

     When I saw the prices I was shocked.  I hope I am not the only one who thinks paying 15MB for a not very big 1 bedroom condo with only 1 bathroom is totally insane.  That's well over twice the price we paid for a similar size condo--which I thought was expensive at 6MB!  Yes, they are likely on high floors but our condo is on floor 37 and the new building is only 39 floors so they can't be very much higher.  Is being 1 minute closer to the MRT worth spending 7MB more?   As I said, insane pricing, in my opinion.  Maybe they will find buyers (include me out)  but it seems like they would be a hard sell even in booming economic times with no virus.  I guess we'll see.

[Redline]

They let every sector depend on Chinese ????

[scorecard]

13 hours ago, natway09 said:

Love it,,, now they have something to blame for putting all their eggs in one basket, encouraged by the present Government.

The glut of condos in Pattaya/Jomtiem is starting to show.

There are going to be some real bargains soon & cash will be king

Well yes but a friend in Pattaya put his luxury 2 bed condo on the market 12 months ago, price 22Million Baht, agreed by a number of agents at that time as a fair price. Excellent layout, great kitchen, nice views of the ocean and Pattaya bay, in excellent condition, excellent facilities and maintenance. 

 

Within the first few months of putting the unit on the market he had about 5 people (farang and Japanese) look at the unit and in the last 6 /8 months not one viewer.

 

He's dropped the price to 18Million and he keeps in contact with about 6 agents to try to keep them active.

 

About 2 weeks back one agent confirmed that the typical buyers for his unit would be farang or Japanese (not Chinese, I don't know why), and told him that given the big slow down in farang visitors who would typically buy in this price range and what's forecast for farang visitors in the high season late this year, he was very very doubtful of a sale even if the price was dropped by 50% down to 9Million. 

 

 

[Soikhaonoiken]

19 hours ago, Assurancetourix said:

It is totally false;
too easy to put this on the back of the coronavirus;
but it's typical thai: always the fault of others, never its.
a few weeks ago there were posts on this forum on this subject;
Like what 25% of new housing built in Bangkok had not found buyers and that this magnifying bubble would soon explode ...

Totally agree with your post, it's about 12 months ago there was a topic on the over supply of condos and houses as many new build had been empty for 2-3 years, but now they want to blame this virus and the loss of Chinese visitors.. 

[NeoDinosaw]

On 2/6/2020 at 7:36 AM, RichardColeman said:

Up in Soi Khoa Noi they are building a gazillion new Choc Chai condos - they even built a three storey sales building catering to the Chinese. They were trafficking in the Chinese by the coachload a few weeks ago - now the odd taxi turns up. 

where is Soi Khao Noi  ?  Is it the one in Hua Hin ?