Thailand remains appealing to residential condominium investors due for the relatively low prices of real estate and reasonably high rental yields.
That’s according to real estate firm CBRE, commenting on how Thailand-based developers should be taking advantage of the growth in Chinese tourism to the Kingdom.
It said purchasing conditions in Thailand are less complicated compared with other countries, with relatively inexpensive down payments and small transfer fees.
Several years ago, the majority of foreign condo buyers in Thailand were predominantly from Hong Kong or Singapore with minimal Chinese demand.
Due to weak domestic demand during the past two years, Thai developers have been expanding their customer base by holding overseas marketing campaigns. Consequently, there are more Chinese buyers purchasing condo units in Bangkok and major tourist destinations in Thailand.
CBRE reported that according to Baidu, China’s top search engine and web portal, Thailand ranked as the seventh country where Chinese searched for real estate investments during 2016, and second among Southeast Asian countries behind Malaysia.
Based on Baidu’s statistics approximately 50 percent of investment capital from Chinese property buyers was for investment.
Chinese often buy properties priced below THB 10 million, and located in downtown or midtown Bangkok with easy access to mass transit stations. They also purchase in Chiang Mai, Pattaya, and Phuket.
CBRE noted that Thailand is still a relatively new market for Chinese residential real estate investors compared with Malaysia.
To take advantage and to increase Thailand’s residential development exposure, developers should continue to improve construction quality, design and safety to be competitive with other investment destinations.
There are challenges in tapping the Chinese demand for overseas properties, with capital controls on how much money a Chinese national can bring out of China and restrictions on capital outflows for property investment.
To further attract Chinese demand in the long term, Thailand developers need to understand the demand criteria and produce the right products that suit Chinese buyers’ required specification, including Chinese promotion materials and Mandarin-speaking sales staff.
Another important area is to provide a high standard customer service throughout the transaction process, especially in providing transparent transaction terms, fee structures, taxation regulations, and transfer processes for foreigners.
It said this will help gaining trust with international buyers and increasing customer loyalty, as well as in making them recommend projects in Thailand to other buyers.