COVID-19 is proving to have a long-lasting impact on a global scale. Some industries such as tourism were immediately hit in response to closed borders or people ceasing to travel, while other sectors will feel the pain later down the line. Inevitably countries hit hard will have a significant economic impact resulting in less tax revenue and money to reinvest in the country.
Property is often cited as a safe investment asset because everyone needs somewhere to live as opposed to a speculative asset. However, it becomes less lucrative when there is market oversupply driving prices down.
How COVID-19 Is Impacting The Property Market
One of the first impacts in Thailand with the arrival of COVID-19 was the lack of tourists and overseas investors that chose the Kingdom as their property investment destination thanks to its attractive price point compared to on home soil. Their lack of presence in the market has weakened demand and softened prices.
Domestic investors have also been deterred to part with their cash due to the global pandemic illustrated by DDproperty’s Thailand Consumer Sentiment Study that revealed that more than three in five Thai investors are hesitant to make a property investment now.
Thailand’s economy, like many other countries, has suffered from the pandemic due to people losing their jobs or incurring a salary reduction. This lack of security naturally encourages individuals to put their property purchase on the back burner until they are in a better financial position. Also, no one really knows the long term impact the pandemic will have on a global scale so many investors will want to see how it plays out.
COVID-19: Another Cog Impacting The Thai Property Market
At the other end of the spectrum, 15 percent of those interviewed have seen the outbreak as a good opportunity to invest. Many developers are desperately trying to offload inventory resulting in an abundance of offers and promotions to lure investors. Astute investors eye up weaker market conditions in the hope of making greater gains in the future. Developers should capitalise on these investors and secure them into purchasing their property.
Simultaneously since many people are now working from home, there is a real thirst for more living space. Many companies have identified that they can function without having their employees permanently in the office meaning that they might never go back to being based in the office full time.
Investors are taking note of these changing habits when looking for a property to buy whether it is for an investment or for themselves. Developers also need to adapt, and those Bangkok condominiums packed with lots of small units might become a thing of the past if demand weakens in favour of units with sufficient working from home space.
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