During the second quarter of 2017, Thailand rose from sixth place to become the third most popular property investment destination for Chinese buyers, according to Chinese overseas property portal Juwai.com.
But just what is behind this recent surge in popularity that has seen Thailand become one of the top playgrounds for both middle-class and high-net-worth Chinese?
Why is the Land of Smiles attracting so many Chinese property buyers – whether as tourists, investors, retirees migrants or expatriates?
Here are some of the main reasons:
Thailand is just six hours from China, and that makes it a pretty perfect location for Chinese property buyers to move to, as it is far enough for them to enjoy a more liberated and desirable lifestyle, yet close enough for frequent trips back to visit friends and family.
Compared with the red-hot property prices in China, Thailand’s CBD condominiums and resort properties are an absolute bargain for homebuyers from mainland China. For example, house prices for resort homes in Sanya – the top luxury local travel destination for affluent Chinese often touted as ‘China’s Florida’ – are around RMB 25,743 (THB 128,715 / US$ 3,859) per sqm on average. However, house prices in the beach paradise of Pattaya – the most popular Thai city for Chinese buyers according to Juwai.com – costs just THB 81,500 (RMB 16,380 / US$ 2,455) on average. Along with a less complicated sales purchase plus lower down payment rates and property transfer fees, this poses an extremely alluring investment opportunity. The cost of living in Thailand is enviably low as well, making for an extremely comfortable lifestyle that most Chinese would be unable to afford in China.
Thailand allows foreign buyers direct freehold ownership of condominiums, as well as common property co-ownership. This is incredibly enticing for Chinese buying property and real estate, as it is impossible for mainland Chinese to own freehold property in China, whose residential land lease policy only allows Chinese to own their China property for up to 70 years.
Large Chinese presence
Thailand is already home to one of the world’s largest Chinese population outside China, so its culture and cuisine already offers enough similarity that would be easier for mainland Chinese to adapt to. However, it’s the recent surge in Chinese migration to Thailand – approximately 400,000 of them over the past decade – that is drawing more Chinese property investors to the Land of Smiles.
Besides relatively inexpensive housing prices, less complicated sales-purchase conditions, as well as lower down payments rates and property transfer fees, real estate in Thailand offers good rental yields too. Steady rental demand from holiday homes and expatriates in Thailand means great rentability and impressive returns, which is always a draw for Chinese real estate investors. Bangkok alone offers rental yields of up to 7 percent on average, which is particularly attractive if you put it up against China’s current rental yields which have slipped below 2 percent in 13 major cities, including Beijing, Shanghai, Guangzhou, and Shenzhen.
Have your say. Are you seeing more Chinese buyers, and do you think Thailand’s property sector can survive without them? If you have tips for dealing with Chinese buyers feel free to comment.