Despite the Thai real estate market being affected by the COVID-19 pandemic for more than a year, foreigners are still interested in buying real estate in Thailand for living and investment.
The demand for buying real estate assets is quite slow due to the COVID-19 situation, with foreigners unable to come to Thailand due to travel restrictions. However, once Thailand can vaccinate against COVID-19 thoroughly and be able to open the country again, demand from foreigners who have confidence in the public health system and Thai medicine, will come back to buy Thai real estate as a second home or for investment. Ananda Development PLC, leading Thai real estate developer, is ready to move forward into this lucrative international market valued at over 100 billion baht
As international trading continues to slow down as a result of the pandemic, the pending demand for real estate in Thailand has increased, ensuring a boom in the market after the country opens in the future.
However, according to the real estate information center, The Government Housing Bank, which collected data on foreign ownership conveyance in 2018-2020, found that in 2018 13,568 units of condominium ownership were transferred by foreigners, with a total value of over 57 billion baht.
In 2019, there were 12,798 units of foreign ownership conveyance, or a total value of more than 50 billion baht. However, the Covid-19 outbreak, which started at the end of 2019, resulted in the conveyance of foreign ownership of apartments in 2020 decreasing by about 35%, to 8,285 units, totaling 37 billion baht.
The Real Estate Information Center estimates the average of the conveyance of foreign ownership is 11,550 units per year, with a total value of 48,526 million baht. The key reason for the decrease in the number of conveyances in 2020 was due to people being unable to travel to Thailand and this will also be the case in 2021.
Meanwhile, Bank of Thailand indicates that the value of foreign remittances for down payment and purchase of condominiums in Thailand from 2013-2016 averaged about 50 billion baht per year and increased to 71 billion baht in 2017. In 2018, the value of foreign conveyances for down payments and to buy condominiums was as high as 92 billion baht before starting to decline in 2019 to 68 billion baht.
Therefore, when Thailand can vaccinate against COVID-19 thoroughly and be able to open the country again, the pending demand that disappeared in 2020 and 2021, along with new demand from foreigners who have confidence in the public health system and Thai medicine, will come back to buy Thai real estate as a second home or for investment. It is expected to increase enormously, valued no less than 100 billion baht.
Currently, foreigners are still unable to travel to Thailand easily, however, the demand for buying real estate in Thailand remains. DDproperty.com reports that the number of people visiting their website to buy and rent real estate during the COVID-19 outbreak is around 3 -3.5 million people per month. These visitor numbers include 30% foreigners, the majority of which are Chinese investors seeking information for buying real estate in Bangkok, Phuket, Chiang Mai, Pattaya and Rayong, while other groups of foreigners, Japanese and European, are looking to rent real estate rather than buy.
With hundreds of millions of opportunities in front of them, Ananda Development Public Company Limited has put an emphasis on this market, with a ratio of over 60% of foreigners transferring condominiums in 2020, especially Chinese, which is the main market for Thailand.
China economic growth has increased quickly since the outbreak of Covid-19. In the first quarter, China’s GDP reached 18.3%, with Chinese authorities projecting full-year growth of 6%.
Mr. Chanon Ruangkritaya, Chief Executive Officer, Ananda Development Public Company Limited said “China has the largest population in the world with more than 1.4 billion people and strong economic growth, making them a significant influence in global markets. Our real estate business needs to embrace this enormous opportunity”
Thailand remains as a world class destination that foreigners would like to visit, whether it is for the beautiful natural attractions, culture and friendly service, or the health system which is recognized worldwide as the number 1 in Asia. As a result, there is always an increasing demand from foreigners wishing to live in Thailand.
Mr. Prasert Taewdulyasathit, Chief Executive Officer Real Estate Business Division, Ananda Development Public Company Limited added, “Even though the turnover of foreigners decreased by 89% in 2020, it can be estimated that if we open the country and travelling resumes, Thailand’s condominium market will grow exponentially.”
Moreover, he insists that the demand from foreigners for Thailand real estate, especially Chinese customers, is still high. Even with the COVID-19 situation stopping travel into Thailand the amount of company’s transfers in the past year is over 18,340 million baht, with 21%, around 4,000 million baht, being attributed to online strategies.
In addition, there is a group of foreign customers, totaling almost 1,000 million baht, who are willing to transfer 100% of the room fee without receiving the transfer of ownership due to the inability to be in Thailand to for the document process, this further proves the demand from international investors.
“The company believes that high net worth individual customers buy premium properties at reasonable prices for the quality of the projects. This group of customers are meticulous and take a long time to decide. But it would be easier for most of them to decide about a purchase if they could see the property in person,” said Mr. Prasert.
Ananda has partnerd with real estate agents such as Thai Way Property Company Limited and Shinyu Real Estate Company Limited to do international marketing for two leading ready-to-live condo projects, Ideo Q Sukhumvit 36 and Ashton Asoke, promoting them in China, Hong Kong, Taiwan, Japan and Singapore while waiting for the country to open in the future.
“We still believe that our business model of collaborating with partners who have expertise, and a good understanding of international customers will connect us to foreign investors looking to buy our company’s projects that offer quality lifestyle and the opportunity to live well in Thailand,” said Mr. Prasert.
This year, Ananda aims to meet sales targets of 18,570 million baht and a revenue target of 16,008 million baht, there is a backlog of transferring assets worth over 3,847 million baht this year, while there are ready-to-change condos in stock that can exchange to be income revenue of over 26 billion baht, along with 5 new condo projects, totaling 24,422 million baht in value that will be released for sale in the second half of the year.
If we can open the country, Ananda is prepared and ready to be competitive in a market worth hundreds of billions, ensuring the strength of the company in the future. “This year, the winner is developer who have stock ready to sell that are ready to turn into income. And we will be the winner for this year.” said Prasert.