Bangkok property market takes $4.7 billion hit ‘with worse to come’

The Nation/Asia News Network

BANGKOK — The virus crisis has wiped a whopping Bt150 billion ($4.7 billion) off the value of the residential market in Bangkok and surrounding provinces, Krungthai Bank research revealed Thursday.

Meanwhile, the reservation rate for new apartments and houses fell from 20 percent in the fourth quarter of 2019 to 15 percent in the first quarter of 2020 before falling again in the second quarter to 12 percent.

Phacharaphot Nuntramas, director of the bank’s Compass research centre, said the property business has been hit hard by the Covid-19 crisis, with demand for new residences still falling.

Domestic consumers have been affected by an economy expected to shrink by up to 8.8 percent this year, while foreigners – especially the Chinese – were hit by lockdown measures that hindered purchase or transfer of ownership, he added.

The research center estimates the value of the residence market in Bangkok and nearby provinces has dropped by 27 percent from Bt570 billion ($18 billion) to Bt420 billion ($13.2 billion).

The director said that businesses may have to suspend construction of new projects until the economy recovers.

“Unsold stock could expand by 5 percent this year to reach 185,000 units, although developers have cut new projects by 40 percent compared to the last year,” he added.

He estimates the residential market will take four or five years to return to levels seen before the virus outbreak.

Phacharaphot also expressed concern over the trend of non-performing loans in the property and business sectors, saying it needed to be monitored.