Asian housing markets vulnerable due to covid-19
Steve Randall
Canadian Real Estate Wealth
Real estate frequently follows trends but occasionally there will be a bolt from the blue that changes things fast.
The US saw it a decade ago when subprime mortgage lending buckled and the housing markets collapsed. Now, it is Asian housing markets that are especially vulnerable to circumstances due to the novel coronavirus or Covid-19.
Bangkok has long been a favourite market of international real estate buyers; the Chinese in particular but not exclusively.
But fears about the spread of the virus are likely to see these buyers pull back. Chinese real estate buyers have already been cutting back on international real estate purchases – including in Vancouver – due to tighter restrictions by the Beijing government.
Consultancy firm Agency for Real Estate Affairs is forecasting international buyers to account for just 10% of sales in 2020, down from 20% two years ago.
“The demand from foreigners may disappear in the first half following the outbreak,” Sopon Pornchokchai, the consultancy’s president told Bloomberg. “We’ll need to rely on local buyers, but that won’t be easy.”
Bangkok has 100,000 empty condos and local banks have cut mortgage rates to try to spark domestic demand.
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