The flooding which has swamped large parts of Thailand is likely to have a substantial and long-lasting impact on property purchase decisions, according to one industry expert.
Aliwassa Pathnadabutr, Managing Director of CBRE Thailand, told PropertyGuru: “The flooding will result in changes to demand patterns in the residential sector in terms of preferred locations and products,” she said.
“Purchasers considering buying residential properties in the future will pay more attention to the product, design features and flood protection measures of individual developments. Housing developers will also need to ensure flood prevention measures and features are incorporated when launching new developments. Demand for high-rise condominiums in the inner city will likely rise, while those considering housing will also be more selective in terms of location and move to less flood-prone areas,” she added.
In response to the mass exodus from Bangkok this week, Pathnadabutr said: “The second home markets in Pattaya, Chonburi, Hua Hin, Cha Am and nearby provinces will benefit from this crisis. Bangkok residents with disposable income will be inclined to purchase holiday homes out of Bangkok, as many residents are now evacuating to Pattaya and Hua-Hin.”
The Thai government announced a five-day public holiday, from October 27-31, to encourage Bangkokians to take refuge away from flood prone districts, and this is having an effect on the commercial property sector.
“The office and retail sectors will have minimal short-term impact,” said Pathnadabutr. “The office sector is experiencing a short-term slow down as businesses are delaying decisions, while the retail business is experiencing a slow down or closure in some areas which are directly affected by the flooding. In the long-term, retailers may re-think their distribution strategy and consider a wider geographical dispersion of their distribution centres in order to minimise the impact from future crisis. However, we believe the retail sector will experience a quick recovery.”
The industrial sector is undoubtedly the most impacted at present, with several key industrial estates under several metres of water.
“It is difficult to predict how long the recovery process will take, but in the short-term the impact is severe with widespread disruption in the manufacturing and distribution chain,” said Pathnadabutr. “The recovery process will be strongly underpinned by the government’s effectiveness in implementing supporting measures, as well as the individual industrial estate operators to bring factories back into operation. Going forward, whilst existing operations will re-open, it is critical for the government to re-build confidence and take effective measures to prevent similar disasters from occurring again in the future, if not, Thailand is at risk of losing its credibility and foreign direct investment.”
With evacuation orders in place for much of the Thai capital, many Bangkokians have relocated to other parts of the kingdom. The towns of Cha Am and Hua Hin are favoured destinations for Thais, according to Knight Frank Thailand, while expatriates have opted for Pattaya. Budget hotels and serviced apartment in the Gulf of Thailand resort city are reported to be fully booked.
Risinee Sarikaputra, Associate Director, Research and Valuation, Knight Frank Thailand, said: “Bangkokians are making the decision to evacuate due to the worsening flood situation. Some families have sent their children and elderly family members upcountry. The favourite places are Cha Am and Hua Hin because many Bangkokians have their second homes there.”
Many countries, including Singapore, have advised against all but essential travel to Thailand, however cancelled hotel bookings from overseas tourists are more than being compensated by residents fleeing the Bangkok floods – albeit with lower revenue due to the reduced spending power of local guests versus foreigners.
For those who have opted to stay in Bangkok, finding a secure temporary home is proving to be a challenge. Occupancy rates at serviced apartments, especially those with above-ground parking, are high. Company bookings are also significantly up as organisations rent rooms for their staff close to their offices.
To contact the journalist, you may send your message to email@example.com