Bangkok has 100,000 empty flats and coronavirus will make oversupply even worse
- Chinese buyers previously accounted for much of the foreign investment but that has been affected by the travel curbs and economic havoc
- Even before the outbreak of the coronavirus, foreign interest flagged as the Thai economy, reliant on trade and tourism, slowed down
“The demand from foreigners may disappear in the first half following the outbreak,” said Sopon Pornchokchai, the consultancy’s president, adding that there are 100,000 vacant condominiums in and around Bangkok. “We’ll need to rely on local buyers, but that won’t be easy.”
The Bank of Thailand has relaxed mortgage-lending rules to encourage domestic purchasers but developers remain wary. For instance, Naporn Sunthornchitcharoen, the chief executive of major Thai developer Land & Houses, last month said the firm was “afraid” of the condominium segment.
Even before the coronavirus spread from China, foreign interest was flagging as the outlook for an economy reliant on trade and tourism deteriorated amid currency strength in 2019 and the US-China trade war.
Land & Houses doesn’t plan to open any new condominium projects this year. Another developer, Singha Estate, is “very cautious” about buying land for residential offerings because of concerns about an oversupply of property in certain locations, Head of Investor Relations Maysenee Ratnavijarn said.
The real estate sector slowdown is among the many challenges ahead for the Thai economy in 2020. Gross domestic product growth may slow to as little as 1.5 per cent this year, a six-year low, a government agency forecast last week.