Virus pandemic puts Southeast Asian property market in crisis mode

Pool view from the Hyde Sukhumvit 11 prime development in Bangkok. Some condos there are now offered at a 25-per cent discount to clear stock.

Lockdowns and curfews all over Southeast Asia owing to the spread of the coronavirus are pushing the local property industry increasingly in crisis mode.

Oversupply in major cities across the region has put pressure on prices, and real estate agents are trying to continue doing their work by switching to virtual viewings, whenever they have the technical skill and equipment.

In hard-hit cities such as Bangkok, the first steep discounts are now being offered for prime real estate. For instance, developer Grande Asset has announced a 25-per cent discount for selected condominiums in its luxury development Hyde Sukhumvit 11 in the heart of Bangkok’s business district, bringing down the square meter price from previous heights of around $6,400 to $4,800, prices not seen in years for prime property at such a location.

Real estate experts are expecting that the discount spiral will go on as developers are desperately seeking to get rid of unsold stock as the market has literally evaporated in the course of the pandemic.

First study shows “devastating” effects on real estate agents’ work conditions and income

Meanwhile, a study on the effects of the coronavirus crisis on the work of real estate agents – the first survey of its kind in more than 60 countries including in Southeast Asia – by Juwai IQI Market Intelligence, a global property business research firm, has found partly “shocking” and partly “reassuring” results.

The survey shows that, as the nature of the agents’ work is putting them at risk to catch an infection, they are now taking sensible steps to protect themselves, for example by deploying virtual viewing options, using livestreams and video calls from the property instead of meeting clients in person and offering e-commerce channels to facilitate deals.

However, most agents expect their 2020 earnings to be negatively impacted, believe that real estate activity by all consumer groups is down and forecast the crisis will last at least three months. On the other hand, agents generally feel the current situation provided “an excellent buying opportunity.”

Pessimism prevails in the industry

For selected countries, the survey showed interesting details.

In the Philippines, 30 per cent of agents say foreign buyer activity has suffered a significant drop, while 26 per cent report a similar drop in local owner-occupier and investor buyers, and 18 per cent report a drop in renters.

In Malaysia, 31 per cent of agents say foreign buyer activity has suffered a significant drop, while 23 per cent report a similar drop in local owner-occupier activity, 27 per cent report a significant drop in investor buyers, and 18-per cent report a drop in renters.

In Thailand, 30 per cent of agents say foreign buyer activity has suffered a significant drop, while 22 per cent report a similar drop in local owner-occupier buyers, 26 per cent report a significant drop in investor buyers and 22 per cent report a drop in renters.

In Singapore, 47 per cent of agents report a significant fall in foreign buyer activity, while 18 per cent report a similar drop in local owner-occupier activity, 15 per cent report the same in local investor activity and 21 per cent report the same in renter activity.

Earnings for property agents dive

With regards to the financial impact on their job situation, real estate agents across all surveyed countries expect to earn less in the current situation. In Thailand, 74 per cent of agents expect to earn less in 2020, with 55 per cent planning to earn “significantly less” and 19 per cent expecting to earn “”a little less.”

Malaysian and Philippine agents are also rather pessimistic. In Malaysia, 74 per cent of agents expect to earn less in 2020, with 38 per cent expecting to earn “significantly less” and 33 per cent expecting to earn “a little less.” In the Philippines, 68 per cent of agents expect to earn less in 2020 due to the Coronavirus, with 38 per cent expecting to earn “significantly less” and 30 per cent expecting to earn “a little less.”

In Singapore, 88 per cent of agents expect to make less. The share of agents in the city state who expect to earn “a little less” is, at 47 per cent, larger than the 41 per cent who believe they will make “significantly less.”



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Pool view from the Hyde Sukhumvit 11 prime development in Bangkok. Some condos there are now offered at a 25-per cent discount to clear stock. Lockdowns and curfews all over Southeast Asia owing to the spread of the coronavirus are pushing the local property industry increasingly in crisis mode. Oversupply in major cities across the region has put pressure on prices, and real estate agents are trying to continue doing their work by switching to virtual viewings, whenever they have the technical skill and equipment. In hard-hit cities such as Bangkok, the first steep discounts are now being offered for...

Pool view from the Hyde Sukhumvit 11 prime development in Bangkok. Some condos there are now offered at a 25-per cent discount to clear stock.

Lockdowns and curfews all over Southeast Asia owing to the spread of the coronavirus are pushing the local property industry increasingly in crisis mode.

Oversupply in major cities across the region has put pressure on prices, and real estate agents are trying to continue doing their work by switching to virtual viewings, whenever they have the technical skill and equipment.

In hard-hit cities such as Bangkok, the first steep discounts are now being offered for prime real estate. For instance, developer Grande Asset has announced a 25-per cent discount for selected condominiums in its luxury development Hyde Sukhumvit 11 in the heart of Bangkok’s business district, bringing down the square meter price from previous heights of around $6,400 to $4,800, prices not seen in years for prime property at such a location.

Real estate experts are expecting that the discount spiral will go on as developers are desperately seeking to get rid of unsold stock as the market has literally evaporated in the course of the pandemic.

First study shows “devastating” effects on real estate agents’ work conditions and income

Meanwhile, a study on the effects of the coronavirus crisis on the work of real estate agents – the first survey of its kind in more than 60 countries including in Southeast Asia – by Juwai IQI Market Intelligence, a global property business research firm, has found partly “shocking” and partly “reassuring” results.

The survey shows that, as the nature of the agents’ work is putting them at risk to catch an infection, they are now taking sensible steps to protect themselves, for example by deploying virtual viewing options, using livestreams and video calls from the property instead of meeting clients in person and offering e-commerce channels to facilitate deals.

However, most agents expect their 2020 earnings to be negatively impacted, believe that real estate activity by all consumer groups is down and forecast the crisis will last at least three months. On the other hand, agents generally feel the current situation provided “an excellent buying opportunity.”

Pessimism prevails in the industry

For selected countries, the survey showed interesting details.

In the Philippines, 30 per cent of agents say foreign buyer activity has suffered a significant drop, while 26 per cent report a similar drop in local owner-occupier and investor buyers, and 18 per cent report a drop in renters.

In Malaysia, 31 per cent of agents say foreign buyer activity has suffered a significant drop, while 23 per cent report a similar drop in local owner-occupier activity, 27 per cent report a significant drop in investor buyers, and 18-per cent report a drop in renters.

In Thailand, 30 per cent of agents say foreign buyer activity has suffered a significant drop, while 22 per cent report a similar drop in local owner-occupier buyers, 26 per cent report a significant drop in investor buyers and 22 per cent report a drop in renters.

In Singapore, 47 per cent of agents report a significant fall in foreign buyer activity, while 18 per cent report a similar drop in local owner-occupier activity, 15 per cent report the same in local investor activity and 21 per cent report the same in renter activity.

Earnings for property agents dive

With regards to the financial impact on their job situation, real estate agents across all surveyed countries expect to earn less in the current situation. In Thailand, 74 per cent of agents expect to earn less in 2020, with 55 per cent planning to earn “significantly less” and 19 per cent expecting to earn “”a little less.”

Malaysian and Philippine agents are also rather pessimistic. In Malaysia, 74 per cent of agents expect to earn less in 2020, with 38 per cent expecting to earn “significantly less” and 33 per cent expecting to earn “a little less.” In the Philippines, 68 per cent of agents expect to earn less in 2020 due to the Coronavirus, with 38 per cent expecting to earn “significantly less” and 30 per cent expecting to earn “a little less.”

In Singapore, 88 per cent of agents expect to make less. The share of agents in the city state who expect to earn “a little less” is, at 47 per cent, larger than the 41 per cent who believe they will make “significantly less.”



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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