Real Estate Trends / Strategies to Cope with the COVID crisis

2250 Views  | 

Real Estate Trends / Strategies to Cope with the COVID crisis

 Real Estate Trends / Strategies to Cope with the COVID crisis


Challenging the public sector, the private real estate business is recovering during   COVID- 19. The economy has grown by 2.5-3.5+2. It will be speeding in 2023-2024. In the real estate business, the executives must be the role models of CSR. 

 

 


       Mr.Arkhom Termpittayapaisith, Minister of Finance, has clarified the monetary-fiscal policy in the public sector amid the spread of COVID-19 that the government has set a target of GDP growth at 2.5-3.5 + 2.

          Slowly but surely, it will boom in 2023-2024 as government investment in many segments will have yielded by that time, a result from investments in infrastructure, transportation, public health and environment, technology and energy, and water management.

         This policy will be effective in the long run. On the other hand, the relief measures for the grassroot people, the majority group in the country, are the short-term measures to help the majority of people by stimulating the GDP, which has been growing approximately 50% of the total GDP, Rao Chana, Khon La Khrueng, Chim Shop Chai (Eat, Shop, Spend), Rao Tiew Duay Kan, for example.

          Regarding the total target GDP 2.5-3.5+ 2, especially this +2,  we might have a lot more opportunities to earn if we have a good plan by providing soft loans or long-term loans with low interest to business entrepreneurs under the operation of a state-owned bank called SME Bank. In addition, we are going to expand the scope of loans from the import – export businesses to the tourism industry and other businesses with the guarantee from Thai Credit Guarantee Corporation (TCG).

          The state banks will also have policies about assets pledging. If the private sector has problems, there will be no auction   but they may sell their assets to a state bank and the private company may rent their own assets.  This method is being considered as the state banks fully support private organizations

           Due to this situation, the real estate businesses should digitalize, modernize and technologize the organization and its technology to push the GDP to + 2% from 2.5-3.5% to 4.5-5.5% as a response to the government policies that inject money into every sector of the economy to stimulate the growth as follows:

          1. To help the unemployed and people with few hours of employment or low income.

           2. To circulate money in the country, resulting in the stimulation the intended economy growth

           3. People who have money in banks that have not spent it to spend during COVID.

         However, the liquidity in the banking sector's circulating system still covers 2-2.5 trillion baht but it must be controlled by the Bank of Thailand to prevent the inflation.

           

 

 

 

 

Buyer's Golden Age in Real Estate

Sellers Must Improve their Technology + Creative Design

           Mr.Arkhom Termpittayapaisith, Minister of Finance, said that, in the midst of the coronavirus crisis, real estate businesses have to adjust themselves in the following ways:

        1. Technology – Houses, condominiums or other buildings must be designed to cope well with technological changes at present.

         1.1 Look for new technologies in digital systems, such as using smart home technology via mobile phones.

         1.2 Be equipped with public utilities such as a waste water disposal system, garbage disposal system, cooling system and ventilation to ensure safety for residents. In the future, there will be laws and regulations related to these issues.

         2. Energy - The government focuses on, promotes, and invests in alternative energy, such as promote the use of sky trains and subways.  

         3. Medical care –  If a resident buys a unit at the age of 20, they will potentially stay there into their 50s or 60s so the building should be designed with older residents in mind as well.

          4.Transportation - The construction of various transport routes, interconnections for a faster commute for both Thais and foreigners, including the Eastern Economic Corridor (EEC)  has definitely affected the real estate business.

            5. Tourism and export policy – Tourists must be completely vaccinated and must hold a special visa (SPECIAL TOURIST VISA: STV). Regarding exports, the economic model needs restructuring from the original into other innovative products.

          6. Thai-foreign tax restructuring -  To stimulate purchasing power locally and internationally, the policy of reducing the transfer tax by 0.01% and the tax on land and buildings in 2021 has been adjusted again. The main points are:

         - A royal decree has been passed to allow foreigners to buy houses-condominium within these 3-5 years. With this privilege, foreigners can now buy at a price of 10-15 million baht or more, where previously they were only allowed to buy at a cost of 40 million baht or more or 1 rai of land. For condominium units, the limitation has been increased to be 70-80% of ownership, but they still have no right to vote in any juristic person meetings of the condominium.

          - Amend the Act on the Lease of Immovable Property for Commercial and Industrial Purposes B.E. 2542(1999), to increase the maximum lease period from a maximum of 30 years, to a 40-50 year maximum.

             Moreover, there will be some amendments in the law to facilitate foreign investors more, such as the laws about visas for retired foreigners, laws related that the public sector to providing services for international sectors which is in compliance with the concept of General Prayut Chan-o-cha, Prime Minister and Minister of Defense, who assigned related public sectors to study and analyze the limitations and obstacles of foreign investment in Thailand.

 

 

 

 

 

Real Estate Business is Ready to Adapt to All Conditions. 2022-2023 is expected to revive, Vaccination is the Hope of the Ease. Real Estate Executives should practise CSR. 

 

The real estate business is ready to adapt to all conditions as 2022-23 is expected to help revive the Thai economy with vaccinations helping to facilitate this as well as real estate executives practicing CSR(need to say what CSR is I think unless it should be understood?

           Mr. Chatchai Sirilai, the President of Government Housing Bank (GHB), talked about COVID-19 and how the GHB is a state bank and has always had policies about helping low income people, and example of which is the program of ‘A Million Houses: A Million Baht’ by constructing houses at a price of not more than 1.2 million baht, with an interest rate of 2.9%. This project has a budget of 10 billion baht.

          Mr. Pornnarit Chuanchaisit, president of the Thai Real Estate Association (TREA) has mentioned the adjustment of the private sector that as long as the price of land continues to rise, we, as housing and condominium development investors, must be determined and emphasize marketing policies, such as discounts, giveaways, joint promotion, buy1get1 free, etc. to encourage buyers. However, the sales volume has increased very slightly recently. The low-rise housing condominium that launched last year has an accumulative sales volume at only about 249,709 million baht with the pre-sale and sales of only 149,470 million baht. The government should help by loosening the LTV (Loan to Value) rate to help the private sector to survive.

 

Mr. Kromchet Wiphanpong, Chief Executive Officer of AssetWise Public Company Limited (AWS) ,a large real estate development company with 15 affiliates, said that executives must practice CSR (Corporate Social Responsibility). In other words, we should create a mindset of awareness towards the environment and social responsibility both inside and outside the organization. Therefore, each design must take the hygiene and heath of the residents into account. Besides installing a good air filtration system, the common area must be airy. There is new technology and various facilities for residents. 

 

         There are 4 factors for surviving in the current crisis as follows:

           1. The help and relief from the government, such as an LTV adjustment by the Bank of Thailand.

           2. Promotion from the private sectors

           3. Attractive interest rates

           4. Affordable prices of houses and high-rise condominiums,  to attract buyers.

 

            Mr. Woradej Rukkaphan, Chief Executive Officer of VBeyond Development Co., Ltd. said the government should relax various measures to attract foreigners to increase their purchasing power which is approximately 800,000 million baht. If we can attract foreign investors to be a new wave, it is expected that the real estate business overall may recover well in 2021 - 2022 and the market in tourist-centric cities such as Bangkok, Phuket, Pattaya, Chiang Mai are expected to increase.

 

        In conclusion, the real estate business has been given relief by the government in several aspects; however, it is up to the business sector to apply technology and CSR to comply with government policies to ensure survival.

 

Walai Chutamtut

This website uses cookies for best user experience, to find out more you can go to our Privacy Policy  and  Cookies Policy