Wednesday, September 30, 2020

Coronavirus outbreak shakes up Thai property sector

Feb 05. 2020
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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.

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