Thailand Real Estate Investment for Chinese Nationals

Today we explore the growing popularity of Thailand Real Estate Investment for Chinese Nationals and some of the key reasons for the growth..

With China’s government sticking to its principles in recent years that houses and real-estate are intended for living, rather than investment with continued restrictions in place to limit the domestic real estate transactions – Thailand’s prospects for investment are flourishing for the Chinese buyer. With lower property tax and better prospect for investors, the country is an ideal place for investors looking to diversify from China into the region.

 

The Chinese investor has now shifted attention to the beautiful beaches and booming cities of Thailand, one of the many destinations that they are investing in, making the Chinese the world’s largest source of international real estate investments, according to the 2019 H1 Global Cross-Border Real Estate Investment Data Report released by uoolu.com.

Attractive Laws and Regulations for Chinese Investors

As opposed to what Chinese investors experience in their homeland, Thailand doesn’t impose restrictions on the number of units that a buyer can purchase. A key component to what has seen a surge in Chinese developers making the most of lower prices, reduced control over investment and higher yield potential – not to forget a picture perfect backdrop for any holiday maker. This merge of both the tourism and investment world only adds another positive for Thailand as a prospect for investors. By investing outside of China and into Thailand, Chinese nationals can enjoy a better living environment, some of the best educational resources in the region, a convenient visa policy for investors and access to some of the best medical care in the world.

This, all backed by the fact that developed markets such as the United Kingdom, US and Australia have become increasingly saturated, which has shifted focus back to South East Asia for key Chinese players in International Real Estate. Cross-border real estate investors with a budget of between 1M RMB and 3M RMB now accounts for close to 70% of the total population of China. This means that property prices in South East Asian countries such as Thailand, Malaysia and Myanmar offer a much more affordable price range when compared to other markets such as the UK or US.

Lifestyle Attraction Plus Ease of Access

The largest age demographic for international investors coming from China is between 30 and 49 years old, many of whom have already reaped the rewards from China’s previous real estate boom and are now looking to re-invest. The buyers, who are now far more affluent as a result of the previous Chinese boom now look past the initial investment returns, which Thailand most definitely offers, but also take into consideration the highly attractive lifestyle benefits. Not many countries offer a ‘best of both worlds’ bridging the gap between a relaxed holiday environment and bustling modern city. This, paired with the ‘Land of Smiles’ attitude makes the choice between a stiffer, traditional investment destination such as the UK and a laid back, high-potential for growth destination such as Thailand a fairly easy choice.

The multiple flight connections between China’s major cities and Thai destinations such as Phuket offers an ease of access for investors, who can treat their investment not only as a revenue generating asset, but an asset of pleasure too. Many Chinese investors reap the benefits of their investment by using it as a holiday home for key periods, and allowing it to generate revenue for the rest of the year.

Thailand Remains the Number 1 Investment Destination for Chinese Investors

According to Uoolu’s user inquiries, Thailand sits comfortably as the No.1 in cross-border real estate investment destination due to the currency advantages. Since 2015, the US Dollar depreciated by only 1.5% against the Thai baht. Thailand’s baht is exceptionally strong amongst the regional currencies and this looks to be financial trend which will continue and only grow stronger as the country’s economy continues to flourish.

In 2019 and according to studies by media reports, 1 in 5 new buyers in the capital of Bangkok comes from China. Thailand is considered the top international tourism destination in the world and this is the same for the Chinese tourist too. With Bangkok and Phuket showing such strong and sustained growth, they are ideal markets for rental property and hotel developments.

The GDP of Thailand’s construction industry has risen from 55 to 77 Billion Thai Baht since 2014 and experts forecast continued growth over the next 10 years. A promising sign for any investor and one of the many signals which highlights the benefits to those who are entering the market now. Over the past 2 years, Chinese giants such as Alibaba and JD have invested in Thailand and the country has become the go-to place for those looking outside of China for investment.

China – Thai Business Relations Grow

Recently, China’s Huawei was invited to assist Thailand in developing the infrastructure needed for 5G technology. Thailand looks to be continuing to grow its connection with China and will continue to do so over the coming years, proving a highly positive friendship for both Chinese and Thai people alike. The Washington-Beijing trade war has spurred Chinese investors to relocate their production bases to Southeast Asia, a trend that has particularly benefited Thailand.

Chinese direct investment in Thailand jumped nearly five times to 262 billion baht ($8.6 billion) in 2019 from the previous year, according to the Board of Investment, making China the kingdom’s biggest foreign investor for the first time.

 

We see now more than ever that Thailand offers great promise for Chinese investors and those looking to relocate and invest in Thai Real Estate are doing so at a time like no other.