PHUKET: The impact of the COVID-19 pandemic may continue to affect the Thai property market through to the third quarter next year (Q3 2021), a senior executive at Knight Frank Thailand has warned.
Frank Khan, Executive Director and Head of Residential, Knight Frank Thailand, noted his forecast in a release issued today (Oct 30).
Mr Khan explained that his prognosis followed discussion with a number of foreign real estate agents across China and Hong Kong towards the Thailand property market.
Thailand’s property market was hit by a drop in Chinese investors during the Covid-19 pandemic, due to the negative impacts of the disease and the global uncertainty surrounding it. Most buyers have been heavily concerned and slowed their transactions.
A number of Chinese and Hong Kong investors wanted to postpone their balance payments for residential deals for one to two years, and some even withdrew reservations for off-plan projects.
Normally, Hong Kong and Chinese investors tend to visit a site to see an actual residence before making their purchases; the fact that they have not been able to come into Thailand, given the travel restrictions, represents the main cause of deal postponements, Mr Khan explained.
Many new condominium projects have delayed their launches until next year or for a couple of years, and Thai developers are clearing their stocks by expediting balance settlements way before the projects are completed. This, combined with difficult transfer procedures and non-refundable booking deposits for reservation cancellations by some developers, often does not match the expectations of overseas buyers, many of whom have complained, he added.
“Such factors may ruin the market or contribute to lower investment-related confidence. On the other hand, some Chinese investors have turned towards the Chinese market itself as property prices are growing and the turnover rate is high,” Mr Khan said.
Some Chinese and Hong Kong investors expect the Bangkok condominium market to have significant adjustments. Some developers are cutting down the selling prices of remaining inventories by 20 to 30% from the usual prices; this is a good chance for investors to grab the opportunity for buying their own residences or for long term investment purposes, he noted.
“Most Hong Kong and Chinese people are interested in investing in ready-to-move projects or completed projects in prime areas, while some also consider townhouses in suburban areas for their own occupancy or retirement living. This could be an alternative choice to reduce investment risks, along with a focus on capital gains or high returns when the market recovers,” Mr Khan explained.
“Even if it is early to predict what the post-crisis market would look like, certain international agents believe that the slowdown may endure until the third quarter of 2021 due to the numerous negative impacts of the global economy,” he said.
It is interesting to point out what the criteria is for Chinese and Hong Kong buyers who consider purchasing a second home abroad. Not only does the government handle the Covid-19 situation well, with prevention measures and controls, but the country affords easy access to high-ranked healthcare services, quality children’s education and the ability to return home without relying on air travel, Mr Khan said.
“This could be a huge opportunity for the Thai property market. The result reveals that there are more Chinese willing to invest in Thailand’s residential market for the long term, due to the above mentioned reasons. The relatively low cost of living and friendly relationship between the Thai and Chinese government are important factors for those Chinese and Hong Kong investors to consider about Thailand, as well,” Mr Khan concluded.
Courtesy: Published at The Phuket News on October 30, 2020