Bangkok’s condominium market, slowing even before the pandemic, has hit its lowest point in a decade.
According to Knight Frank Thailand, the volume of new supply launched in in the second quarter (Q2) of 2020 was down by 73.2 per cent compared to the same period last year. From that, a sales rate of just 14 per cent was achieved, representing a 26 per cent decline year-on-year, and a 16 per cent drop compared with the previous quarter.That’s largely down to Covid-19, of course, a factor that has also decimated the country’s enormous tourism industry, leaving many to ask whether Thailand needs to seize the chance to move to a more sustainable development model.
Risinee Sarikaputra, director of research and consultancy at Knight Frank, says the property market started its decline in April last year as presales were affected by more stringent loan-to-value (LTV) rules, the global trade war and the appreciation of the baht. “Condo sales dropped sharply from the slowdown in demand from both domestic and foreign buyers,” she said.
Although the Covid-19 pandemic may not directly affect the industry, Sarikaputra points out that it is causing severe damage to the overall Thai economy, which is “already fragile and heavily reliant on tourism and exports”.
With Chinese and Hong Kong buyers typically accounting for as much as 49 per cent of units in new projects, their exodus this year due to travel restrictions has exacerbated the situation.
Yet every down cycle presents opportunity, and Tim Skevington, managing director at Richmont’s, the Bangkok affiliate of Christie’s International Real Estate, says buyers who have committed to deals during the pandemic have benefited from the high discounts and promotions offered in many projects.
