Property units have seen a sharp decline in demand from customers amid the COVID-19 outbreak as it is currently too risky to make any moves in the housing market.
The price of new opening units from many developer companies dropped significantly in line with the lack of customer demand due to the impact of the coronavirus.
Ananda Development PCL, a leading company in the property market, is offering special prices on projects near BTS and MRT lines. The price reduction campaigns include a free transfer of ownership and five years of free common expenses.
Lumpini Development (L.P.N.) is another leading company offering special prices. Their campaign includes a special discount of up to 50 per cent on existing projects.
Supattra Kaewkwang, a property agent in the Bangkok area, told Thai Enquirer that she has been facing hardship since mid-February as both Thai and foreign customers are afraid of the travel restrictions throughout the country.
The border ban and the widespread economic recession have caused a decline in her sales of up to 50 per cent, compared to 2019.
“For those who have a secure job and stable financial status, I think it’s a good time to buy or invest in a property when the prices are coming down. However, all investors have to be mindful in the long term,” said Supattra.
As lockdowns are easing up, Supattra hopes that there won’t be a second wave of coronavirus infections for Thailand as she is gradually seeing a recovery in the property market since the end of 2020’s second quarter.
“The customers’ ability to buy relies on the economy which is already contracting. If a second wave hits Thailand, it would negatively affect the situation,” Supattra added.
Krungthai Bank (KTB) Research Center forecasted the value of residential property transfers in Bangkok and its vicinity in 2020 to slide by 27 per cent, from 570 to 420 billion baht due to the economic recession.
It is estimated that only 72,000 new units, a decrease of 40 per cent, will be offered. The housing market will take 4-5 years to rebound to its state pre-COVID-19 outbreak, according to Krungthai.
Phacharaphot Nuntramas, the senior vice president at KTB, revealed that the coronavirus outbreak has caused the housing demand to be heavily undermined, with an estimate of a deep economic recession of 8.8 per cent among Thai customers.
Meanwhile, foreign consumers, especially Chinese customers, have been affected by the lockdown measures which have stopped them from continuing business activities abroad. As a result, pre-sale prices dropped to 15 per cent in Q1/20 and possibly 12 per cent in Q2/20.
Even property developers have reduced the opening of new projects by 40 per cent from 2019.
The Bangkok housing market saw a 24 per cent negative on house property sales and 30 per cent negative on condominium unit sales.
Asia plus securities
Asia Plus securities reported that all property developers will encounter a profit slump in 2020 compared to 2019, mainly as a result of the COVID-19 impact.
The outbreak also caused a sudden contraction in housing sale growth and the developers’ strategy to offer a special promotion to persuade customers and clear unit stocks would cut the profit of every company.
Asia Plus added that many developers had to postpone their new project openings. Specifically, they have had to press pause on units with high demand from foreigners as they are still unable to travel to Thailand at this time.