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Property market in tourism areas relying on vaccines for recovery

Maya Taylor

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An abandoned condo development in Phuket. PHOTO: Flickr/Phuket@photographer.net

Tourism destinations in Thailand are pinning their hopes on Covid-19 vaccines to revive their decimated economies, including in the real estate sector. Vichai Viratkapan from the Real Estate Information Centre says the property sector’s recovery will be driven by the rollout of vaccines, particularly in tourist destinations that have borne the brunt of the economic devastation.

“Tourism destinations like Phuket, Hua Hin in Prachuap Khiri Khan, and Cha-am in Phetchaburi saw a sharp contraction in the residential market in the second half of 2020 as the pandemic ravaged the tourism industry.”

According to a Bangkok Post report, demand for residential property in Phuket has plummeted, with just 443 units sold in the second half of 2020. By contrast, the number of units sold in 2018 peaked at 3,800. New residential developments were also affected, with only 423 units launched in the second half of 2020. In 2018, 3,900 new units were launched in the first half of the year.

Phattanan Phisutvimol from the Phuket Real Estate Association blames poor sales on the pandemic, which has resulted in many people losing their jobs or having their salaries cut.

“Most people in Phuket had lower incomes, while banks took a cautious approach to approving loans for mortgages. This led to a phenomenon of a scramble for customers.”

In terms of the revival of the tourism sector, Phattanan is not very hopeful that Phuket’s re-opening on July 1 will make much of a difference. He points out that Thai tourists may be put off visiting the island, as vaccinated foreign tourists can still spread Covid-19.

“When Phuket welcomes foreign tourists, we are not confident that Thai travellers will remain as everybody knows that vaccinated people can still get infected.”

But he admits that as Thailand is considered an at-risk destination by many other countries, the demand from international tourists remains uncertain.

SOURCE: Bangkok Post

 

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14 Comments

14 Comments

  1. Avatar

    Kim

    Friday, June 11, 2021 at 9:36 am

    At least a somewhat realistic picture of how dire the situation is. Plenty of Thais and foreigners proclaim that the housing market is minimally affected by the current situation. Phuket is the Island of Greed. On a positive note, then it is nice to experience fresh air, cleaner beaches and much less traffic.

  2. Avatar

    321BOOM

    Friday, June 11, 2021 at 9:51 am

    What a tosser. The property market in LOScam especially on Phuket was dead before covid.

    We ourselves luckily never invested in property in LOScam at all but we know many people who did and about 90percent of them would never do it again.

    m2 prices are high and not justified by the crap building quality, high management fees and low rental revenues etc. etc.
    Resale is a huge problem and many units are on the market for sale since years without any chance to be sold in near future at all.

  3. Avatar

    J West

    Friday, June 11, 2021 at 9:53 am

    Note to Thai: It is you, Thai citizens, spreading Covid, not foreign visitors, tourists or otherwise.

    Next: Thai immigration blundering killed foreigner purchasing real estate prospects , not Covid. We won’t buy what we can’t occupy.

    And: Thai buyers being greedy and borrowing more than they can afford to pay back is a Thai problem which neither Covid or Farang has any fault in. Thai got greedy, Thai get slapped, this isn’t caused by farang.

    And: Thai developers are insane, gotten rich on graft not on acumen ( some say the drug, booze and whoring)…building for vanity more than for market. Every greedy HISO in the country has a residential tower of pocket sized condos on the build and there’s no prospect of ever filling them. You might want to fall back on ‘ recency bias’ but look at the facts, Thailand is not coming back any time soon….years likely . The reality is when the other shoe drops on the Non Performing Loans….during and after the real estate market will crash.

    Non of Thailand’s current problems are because of foreigners…it’s Thai’s in charge and failing badly. Did foreigners drag their heels on vaccine distribution? No…that was a small group of Thai HISO.

    Is the drug trade expanding as quickly as it is with HISO replacing booze and whore graft income with drug money? That’s another huge problem being reported on.

    Internationally law says Thai drug trade is growing exponentially. When a ‘ Generals Stars” are paid for, we wonder where the money comes from.

    Thai needs to look in the mirror and stop pointing fingers at scape goats.

  4. Avatar

    Alex

    Friday, June 11, 2021 at 10:13 am

    i think it’s too early to pin hopes, real estate market will be affected by the fact that Thai population lost so much money in this pandemic and so deep in borrowing and credits, they will not spend anything on real estate and will not be able to finance as before. Foreigner’s quota of 49% will not be possible to fill with no “Thai” units sold.

  5. Avatar

    not surprised

    Friday, June 11, 2021 at 10:36 am

    Stupid is as stupid does……Thailand is dying and bleeding out while there are no vaccines available from a failed vaccine response.
    Time for change and time to pull their heads out of their backsides and hoping for tourists.

  6. Avatar

    Simon Small

    Friday, June 11, 2021 at 12:16 pm

    Phattanan seems to be one of the few on Phuket talking any sense, unlike the short-sighted tourism sector who can’t see the risks they’re taking for minimal potential return.

  7. Avatar

    Jesus Monroe

    Friday, June 11, 2021 at 1:58 pm

    Every market relies on vaccines ever the dead one at the end of the street and 150000 bar girls working the farms……

  8. Avatar

    Charles Wall

    Friday, June 11, 2021 at 2:09 pm

    Pointless buying property when you can’t occupy it. Last year retiree farang property owners were prevented from returning home for 8 months effectively stranded abroad, often inhumanly separated from lfamily members. I had one such person staying with me for 8 months … Retirement Visa of 9 years, B800,000 in the bank, willing to undergo the 15 day quarantine but prevented from returning to his home, a flagrant abuse of human rights. Many foreign property owners need to travel in and out 3-4 times a year. Supposing another
    virus/mutation occurs in the future, if the Thais react in the same draconian way anyone, caught abroad will
    be barred from returning to their homes. What’s the point of buying property and not being guaranteed occupation ? that’s what make the Thais elite visas and residency schemes a complete crock of s**t.

  9. Avatar

    Khunplastic

    Friday, June 11, 2021 at 2:23 pm

    A faultering property market is always a very visible sign of serious underlying problems in the economy in general.a huge correction has been overdue in the for a least a decade now.this was coming anyway and covid has just speeded up the whole process.they could use the situation to sort out the property sector but I’m pretty certain they won’t.

  10. Avatar

    Charles Wall

    Saturday, June 12, 2021 at 4:15 am

    Several of my friends have sold their properties back home in Western countries and bought properties in Thailand, in some cases for over B25M. If they sold up several years ago they are sitting on massive losses
    because Thai properties have fallen in the last year and most Western properties have increased by around 10% in the same period. Not only will they never be able to get back on the property ladder in their home countries (rendering themselves virtually stateless) but should their Thai wives/girlfriends ever agree to sell the Thai homes (unlikely),they will have a hell of a job sending the money out of Thailand. I understand if the Thai wife dies the grieving widower is forced to sell the property within 3 months and I can’t see his in laws letting him keep much of the money.
    How anyone would consider trusting the Thai Govt with their schemes for attracting retirees tied to property purchases, govt bond investments etc beggars belief. Over the next few years I predict large numbers of impoverished westerners returning home completely skint living on government assistance.

  11. Avatar

    Simon Small

    Saturday, June 12, 2021 at 7:42 am

    “What’s the point of buying property and not being guaranteed occupation ?”

    The same “point” as in any country as very, very few give right of residency if you buy property unless it is over a minimum limit – AFAIK, none do.

    Happy to be corrected if you can name any …

  12. Avatar

    Simon Small

    Saturday, June 12, 2021 at 7:47 am

    “…Thai needs to look in the mirror and stop pointing fingers at scape goats.”

    Just a minor flaw in your rant.

    Who is “pointing fingers at scapegoats”, apart from in your dreams?

  13. Avatar

    Simon Small

    Saturday, June 12, 2021 at 8:31 am

    What a pile of absolute balls, @Charles Wall.

    “… often inhumanly separated from lfamily members”

    Generally, totally untrue.

    If you had “family members” in Thailand you were allowed to join them. If you had a “friend” you weren’t.

    The only ones penalised unfairly were gays whose same-sex marriages / civil partnerships aren’t recognised in Thailand.

    “If they sold up several years ago they are sitting on massive losses because Thai properties have fallen in the last year and most Western properties have increased by around 10% in the same period”

    They’re only “sitting on massive losses” if they want to sell up and move back now, and expected to be able to just be able to take up where they left off at any time.

    Many have also made tidy profits – I’m in my fourth and last house here, and I made 20, 30 and 90% profit on mine.

    “they [will] never be able to get back on the property ladder in their home countries (rendering themselves virtually stateless)”

    Absolute balls! Not being “on the property ladder” doesn’t make you “virtually stateless” – the two are completely unconnected.

    “… but should their Thai wives/girlfriends ever agree to sell the Thai homes (unlikely),they will have a hell of a job sending the money out of Thailand.”

    Absolute rubbish on both counts. There are easy legal options to the former if you don’t trust your “wives / girlfriends” (although I’ve never used them and I’ve never had a problem) and the latter is just uninformed rubbish as they don’t have a “hell of a job” at all.

    “I understand if the Thai wife dies the grieving widower is forced to sell the property within 3 months and I can’t see his in laws letting him keep much of the money.”

    Unsurprisingly, your understanding is wrong.

    If a foreigner inherits land from anyone they have a year to sell the property (up to one rai) and if they are the beneficiary of the will the “in laws” have no say over the proceeds at all.

    I’m not pretending Thailand’s a paradise or that the system’s perfect, far from it, but if people are stupid enough not to see the disadvantages as well as the advantages before they make an informed, balanced decision to move here they have only themselves to blame, however much they may want to blame “Thais” for their own stupidity.

  14. Avatar

    Mr cynic

    Saturday, June 12, 2021 at 10:23 pm

    I think the hardest properties to sell in thailand are big fancy expensive ones especially when built in odd places however that’s the case pretty much anywhere else also.
    The condo market outside of downtown bangkok however has been oversupplied for at least a decade yet still they build more!
    Been told more than once many are thrown up and the buyer is looking at the guaranteed rent return over a few years normally to ahem, cleanse a bit of money,may or may not be true,i’m not sure.
    running costs however are heaps cheaper in thailand than the west and if you want a real nasty shock look at the total running costs of a condo in singapore for a year.

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