Mr. Simon Lee, Chairman of Angel Real Estate Consultancy Co., Ltd. (ARE), a leading marketing and sales consultancy in Thailand, particularly for foreign quotas, stated that in 2020, the number of buyers from China is expected to continue declining from 2019 due to the China-U.S. trade war, which has impacted the global economy. This situation has been exacerbated by the outbreak of the "2019 Novel Coronavirus (COVID-19)," which has affected property transactions and ownership transfers in Thailand. Most foreign buyers of Thai real estate are Chinese, which has impacted business operations since approximately 50% of Angel's main customer base comes from China, followed by 40% from other Asian countries and 10% from Europe. The company has around 2,000 units valued at 14-15 billion baht scheduled for transfer this year, from a backlog of about 3,000 units worth a total of 20 billion baht.

          During the COVID-19 outbreak, Chinese clients have been unable to travel to Thailand and have faced issues transferring money out of the country, which may lead to delays in ownership transfers. The company has discussed with all property developers to extend the transfer period by 6 months to 1 year to assist clients during the COVID-19 outbreak. Clients who can transfer on time will receive additional special promotions. It is anticipated that Chinese clients will resume transfers once the virus situation improves around mid-year. Extending the transfer period is a better option than canceling purchase agreements, which would result in a loss of 30% down payments and help alleviate the issue of excess housing stock in the market. Currently, there are about 200,000 units of unsold supply in the market, which will take approximately 2 years to clear due to unfavorable market conditions and the economy.

        "We believe that Chinese clients will return to purchase condos more actively from mid-year to the end of the year, as many are planning to buy a second home to prepare for future uncertainties. Thailand remains an attractive destination, and this presents a good opportunity for the company to expand its market among foreign clients looking to own homes in Thailand through long-term leasehold agreements (30 years) in areas like Bangkapi, Bangna, Salaya, Pattaya, Chiang Mai, and Phuket."

      Additionally, the company is adjusting its strategy to expand its customer base and create business portfolios in other countries, such as Japan, Malaysia, Brunei, and Turkey, as well as neighboring countries like Cambodia and Myanmar, including Hong Kong and Taiwan, to replace the Chinese market. There are also plans to increase marketing efforts targeting Thai clients, as the overall condominium market in Bangkok and its vicinity is recovering slowly this year due to decreased demand and significantly higher condo prices. Therefore, price reductions will be necessary to stimulate sales among Thai customers. The company has also expanded its business to act as a broker negotiating with business owners or industrial factory owners from China, Japan, and Taiwan who have factories in China and are relocating their production bases to Thailand, which can accommodate a significant influx of production relocation from abroad.

 

        Nevertheless, the company aims to sell approximately 900-1,200 condominium units in Thailand, with a sales value of 4-5 billion baht, a decrease of 25% from the previous year. The average selling price is between 2-5 million baht, with projects located in areas such as Sukhumvit, Rama 9, and Charansanitwong 70. The company will focus on marketing in Bangkok, Chiang Mai, and Pattaya, Chonburi. The strategy to expand into new business markets has been successful both domestically and internationally, and it is expected that this year the group will achieve sales of 8-9 billion baht.

 

Source: Angel Real Estate Consultancy Co., Ltd. (ARE)