While the year hasn’t gotten off to a great start due to a second COVID-19 outbreak in Thailand, many experts believe 2021 will be better than the past 12 months. The timeline for widespread vaccine distribution in the Kingdom remains unclear but should begin sometime during the first half of the year.
For the Thailand property market, there is hope of a recovery, although 2020 wasn’t as disastrous as it could have been. Some developers pivoted to new residential segments where real demand existed allowing them to offset losses. There was also activity in resort locations like Phuket as people began reexamining their priorities in a post-pandemic world.
Uncertainty will hover over the Thailand property market in 2021. It is important to note that this isn’t negativity. Here are three questions that will need to be answered.
Key questions facing the Thailand property market in 2021
1) When can tourists return?
The entire Thai economy is tied to the tourism sector and the sooner international visitors can safely return, the faster the Thailand property market will recover. Unfortunately, no one really knows when this will happen or what exactly it will look like.
In December, the Tourism Authority of Thailand (TAT) unveiled plans for a special tourist visa scheme that would allow holders to stay in the country for up to 270 days. Holders would be required to undergo a 14-day quarantine upon arrival and have proof of their long-term accommodation or residence. However, tourism boards in both Phuket and Chiang Mai have complained that very little information about the TAT scheme is available.
Perhaps the best hope for tourism in Thailand comes in the form of a regional travel balloon. This would allow visitors to quarantine in one country and then travel freely elsewhere in the region. A travel balloon could start before a widespread rollout of the COVID-19 vaccine providing the tourism sector with a much-needed boost in 2021. Before this can happen, more work is required to get COVID-19 under control.
2) Will Bangkok developers learn their lesson?
Many developers in Bangkok moved away from the condominium sector and focused on low-rise housing in 2020. The move paid dividends as there was real demand for these properties. A number of homebuilders were able to save their year thanks to this shift. Several firms have already announced plans to ramp up efforts in this segment this year.
If this story seems familiar, well, it is. The Bangkok condo market boom between 2012 and 2018 essentially played out in a similar fashion. Some developers found early success, more followed suit and eventually there was a glut of units with many remaining empty today. This will be fascinating to watch in 2021 as there is a real risk Thai developers haven’t learned their lesson and will oversupply the low-rise housing market in search of short-term profits.
3) Can anything be done to attract foreign buyers?
While overseas buyers haven’t completely exited the Thailand property market, their numbers have been dwindling for a while. Throughout 2020, developers urged the government to do something that would allow them to attract more foreign buyers.
There was some movement on this in December when the Thailand Privilege Card announced a new scheme that provided overseas buyers with a five-year visa when buying THB10 million or more in Thailand property. This was a welcome development, but developers are hoping for the government to step in.
The Thailand Development Research Institute urged for a short-term loosening of foreign ownership quotas in specific locations to help ease oversupply. A number of other industry figures have called for similar measures, but it remains to be seen what, if any, action the Thai government will take.