There are an estimated 100,00 vacant condominiums in and around Thailand’s capital as a plunge in Chinese demand hits the property sector.
Foreign buyers accounted for one-fifth of the Bangkok’s real estate purchases two years ago, according to estimate from local consultancy Agency for Real Estate Affairs, but the ongoing coronavirus outbreak is set to cut the figure in half. This is especially due to the fact that the majority of foreign demand is from Chinese buyers who are being hindered by travel curbs in addition to economic risks at home.
The projections if materialized will further exacerbate damage being felt in Bangkok’s real estate market especially in the condominium segment where the consultancy estimates up there are up to 100,000 vacant units.
In addition to the real estate sector, Thailand’s broader economy was already feeling the pressure in 2019 from a strengthening baht and an ongoing U.S.-China trade war. Gross domestic product growth is projected to grow as little as 1.5 percent in 2020 – a six-year low – according to the government.
Local authorities are already rolling out measures to support the property market including loosened mortgage lending rules from the Bank of Thailand to encourage domestic purchases. Still, the outlook remains gloomy and a report citing an estimate by global real estate consultant Collier places the number of newly developed condo units at 6,000 in the first quarter of 2020, a 40 percent year-on-year drop.
To date, the coronavirus outbreak has infected nearly 80,000 individuals with a kill count of 2,495.