The property market in Phuket and Thailand, in general, is on a downward slide, due to the on-going global pandemic. However, the situation will not last forever, investors are ready and are preparing their investment in one of the most promising market in South East Asia.
The assets of the real estate market in Thailand
The global pandemic has caused serious concern among global and local real estate investors in Thailand, who were banking on a 5-7% growth this year.
The popularity of Thailand as a tourist hub and growing center of manufacturing activity makes it a popular real estate investment. Additionally, its proximity to China and historical ties as an important port for western nations also makes it a strong real estate destination.
According to CBRE, one of the world’s largest real estate consultancy firms, the prospect of real estate in Thailand in 2020 was promising. The firm, in its annual report noted that the rising investment in lifestyle real estate, and growing emphasis on advanced facilities like automation, and large-sized apartments, the real estate in Thailand was in a phase of transition.
Additionally, burgeoning land prices and a slowdown in the sales also forced investors to cut down apartment prices making this year a noteworthy year for global real estate investors in Thailand.
Impacts of the coronavirus pandemic
The coronavirus epidemic has resulted in a profound impact on the real estate market in Thailand, especially on the short-term since many foreign tourists like Chinese are left stranded in their home countries, making the current environment ideal for long-term investments.
Additionally, many foreigners who owned apartments and cottages for tourists in Thailand are finding it difficult to maintain these. This has resulted in many pulling out of the real estate market. This could be good news for potential investors. As many foreign operators in Thailand tended to see Thailand real estate as a seasonal opportunity. Many of these have decided to close shops quickly, and even at the cost of potential losses.
Experts predict that the economy will recover by the end of summer. The investment flux from European and Chinese investors will also be in full-flow by that time. Foreigners who are looking to buy a property in Koh Samui, Bangkok, or Pattaya in Thailand, will find many interesting opportunities to make the right investment.
An Ideal Opportunity on the Horizon
The global nature of the pandemic, and high reliance on Chinese investors, will make the tourism industry a less attractive proposition. This may result in heavy investments in the lifestyle condominium apartment segments, which can also be used as permanent housing.
The Thai government is taking pre-emptive measures to help the economy rebound. For example, the Bank of Thailand announced a 1% cut in monetary policy to ensure stability.
Despite the tremendous promise for long-term investments, the worst of Coronavirus pandemic is far from over in Thailand. However, due to strict measures by the government, and the low number of infections in the country, the market will likely recover by end of summer.
Many economists describe the current situation as the ‘pause button effect’ for the global economy. The real estate industry in Thailand is no exception either. Economic calamities simply don’t go back to the way things were. Soon, we will see more diversification in the local real estate, thanks to rising uncertainty created by the tourism industry.
Phuket recently witnessed a major outflow of investors, thanks to on-going restrictions on travel, and slew of other measures around the world. The city continues to witness large discount hoardings to attract real-estate investors from around the globe.
- The void created by uncertainties in China will likely create significant opportunities in Thailand’s real estate market.
These opportunities will likely benefit long-term investors most. The real estate sector had already been moving towards long-term projects like facility-laden residential complexes.
The recent coronavirus outbreak has created more incentives for long-term investors with repo cuts announced by the Bank of Thailand.
The future of the real estate sector holds uncertainties as the global economy is in a paused mode. However, this could also be the best time for long-term investments in Thailand.