The apartment market in Bangkok (Thailand) – one favored by Chinese investors – has become extremely gloomy due to the coronavirus epidemic.
According to Bloomberg, consulting agency Agency for Real Estate Affairs estimates that foreign customers have only accounted for 10% of all apartment purchases in Bangkok from the beginning of 2020, down 10% from the same period last year.
Chinese buyers were once the main customers of this market, however, the outbreak of Wuhan (China) has hindered tourism – trade activities between China and Thailand.
“The demand for foreign visitors can evaporate in the first half of the year due to the epidemic. There are up to 100,000 vacant apartments in Bangkok. We need to focus on local customers but it’s not easy.” , Bloomberg quoted Agency President Real for Affairs Sopon Pornchokchai lamented.
Bank of Thailand has loosened the rules of lending – mortgage to encourage domestic buyers. However, real estate developers are still bewildered. CEO Naporn Sunthornchitcharoen of Thai Developer Land & Housse admits the company is “very concerned” about the apartment segment.
Even before the outbreak of the corona virus in China, the appreciation of the baht and the US-China trade war has left Thailand, the economy dependent on tourism and trade, struggling.
Land & Houses does not plan to implement any apartment projects this year. Another investor, Singha Estate, is also “very cautious” with plans to buy land to develop apartment projects.
The coronavirus epidemic also seriously affects the Thai economy. Photo: Nikkei.
The real estate sector’s decline is one of many challenges for the Thai economy in 2020. The Thai government forecasts that its GDP growth may slow to 1.5% this year. .
Thailand’s Real Estate Development Index has also decreased by 19% in the past 12 months.
Investors are expected to bring about 6,000 new apartments to the market in Bangkok in the first quarter of 2020, down 40% from the same period last year, according to Phattarachai Taweewong, deputy director of Colliers International Group.
“It is a difficult situation. Hopefully, the market supply and demand will be balanced in the next 3 years,” he said.