In the real estate sector, the first half of the year saw several market leaders adapting, along with special promotions and campaigns to stimulate purchasing power, which received an unexpectedly positive response, as reflected in the sales and transfer figures announced. It is expected that this trend will continue, as evidenced by the number of customers visiting projects consistently.
However, a concern for many is whether financial institutions will make it more difficult for individuals to obtain loan approvals. Additionally, the Bank of Thailand's LTV measures are still in place, and recently, several real estate developers have expressed their views urging regulatory agencies to consider adjusting these regulations to suit the current situation, in order to prevent a stagnation of purchasing power in the real estate sector.
Despite reports of many developers delaying project launches or needing to sell off land to increase liquidity, the real estate sector is not entirely without hope.
Recently, we have seen news of a new record for land prices in the CBD area on Sarasin Road, priced at 3.9 million baht per square wah, under plans to develop high-end condominium projects. This indicates that the real estate business still has a path forward, provided that developers understand their target market well and can develop projects aimed at buyers with purchasing power in desirable locations. There are always opportunities to move forward, even in times of crisis.
Moreover, this is seen as an opportunity for the Real Demand group, who are buying for personal use and long-term investment. Recent survey data from Plus shows that rental yield in Bangkok and surrounding areas averages 4-5%, which is quite high compared to current interest rates. Therefore, during this time when operators are eager to clear stock, it presents a golden opportunity for those ready to buy and invest for future profits.
Even though many sectors have commented that the COVID-19 crisis has had a broader and more severe impact than the crisis of 1997, the Thai real estate sector believes that many companies have adapted quickly, especially larger firms that have managed well and should be able to weather this crisis together, as most real estate companies today have previously experienced the 1997 crisis and learned valuable lessons.
It can be seen that the debt-to-equity ratio of various companies is not at a high level and does not involve foreign loans like before, thus it can be assessed that the direction of the real estate market will likely improve due to positive factors such as historically low interest rates, as well as measures to reduce transfer fees and mortgage fees for residential properties under 3 million baht, which will end at the end of 2020.
Additionally, the special promotions and campaigns that have never been seen before will help restore purchasing power and consumer confidence. However, we believe that the government and financial institutions may consider relaxing certain criteria to assist those looking to purchase housing at this time.
SOURCE: www.bangkokbiznews.com/news/detail/890591?utm_source=category&utm_medium=internal_referral&utm_campaign=business
