Property market in tourism areas relying on vaccines for recovery

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