Despite the numerous outbreaks of diseases we have witnessed in recent times (such as bird flu, Ebola, etc.), none has had the same crippling effect that the COVID-19 pandemic has had on every sector of the economy – including Thailand’s real estate market. The effect of COVID-19 on Thailand’s real estate market is one without precedence in the history of Thailand. The negative effects recorded in Thailand’s real estate sector as a result of the coronavirus pandemic have caused real estate marketers to re-evaluate their business policies. But, what caused this decision? And what exactly were the effects?
Effects of Covid-19 on Thailand’s Real Estate
Upon the emergence of the coronavirus back in 2020, nations around the world had to take several stringent measures which affected all sectors of the economy, including real estate. Among the stringent measures taken by countries to prevent escalation of the pandemic is the restriction placed on traveling out or into the country. China and Thailand were two such countries. Thailand’s real estate market is greatly influenced by Chinese investors as they account for half of the total foreign investors in the real estate market.
1. On-going Real Estate Development Projects Couldn’t Be Completed
Because of the imposition of travel lockdown both in Thailand and in foreign investors’ countries such as China, several ongoing real estate projects couldn’t be completed within the scheduled time. Since restrictions were placed on mass gathering and certain work environments, proposed and ongoing real estate development projects couldn’t be completed within the initially planned timeframe. This delay in project completion is also partly caused by the next effect.
2. Investors Requested for Returns of Deposits
Owing to the uncertainty that pervaded the whole world and the general restrictions placed on traveling, many foreign investors especially, requested the return of their deposits. This further hampered the progress of ongoing development projects. Many Thai investors also couldn’t get bank loans and therefore their units were returned to the developer.
3. Developers Could Not Transfer Housing Units
It is only natural and plausible that since developers could not complete ongoing projects, they couldn’t complete the transfer of housing units to owners as well. Even housing projects that were already completed couldn’t be transferred since investors were stuck in their home countries.
4. Residential, Office, and Business Spaces Became Vacant
There was also the problem of occupants quitting their apartments and office building lease. Owing to the pandemic and the ensuing restrictions, several occupants of residential buildings quitted their hold on apartments. Also, some workers quit their various office spaces and buildings as many subscribed to the safer trend of working from home. Shopping malls, hotels, entertainment centers, and other such spaces became empty.
5. Things will get better
Real estate developers are planning to ramp things back up for Q3 in Thailand, they project the pandemic will become endemic. Thailand is already starting to see the number of tourists and ex-pats increasing. The government also plans to celebrate the Lunar New Year/Songkran. CBRE is projecting that the real estate market will bounce back nicely by Q3 2022 and improve even more in 2023.