Chinese buying up property
Relatively low prices, good returns big draws
Thai property continues to entice Chinese buyers with relatively low prices and good returns.
According to Wason Khongchantr, managing director of Modern Property Consultants Co, Chinese buyers, mostly from the middle class, prefer property in Thailand over China, as prices are lower.
Sales-purchase conditions in Thailand are also less complicated, with lower down payment rates and property transfer fees.
According to Mr Wason, investors who purchase rental properties in Thailand enjoy a return on investment within 219 months, compared with 470 months in Guangzhou, 623 months in central Beijing and 656 months in Shanghai.
"There are many Chinese banks facilitating Chinese buyers in many key destinations like Bangkok, Pattaya, Chiang Mai, Rayong, Phuket, Udon Thani and Ubon Ratchathani. They offer mortgage loans of up to 70% of property prices," he said.
About two-thirds of Chinese buyers are interested in condo unit prices of between 5-10 million baht, followed by 2.5-3.5 million baht (22%) and under 250,000 baht (15%), or within 50,000-100,000 baht per square metre, compared with 200,000 baht in Shanghai.
Most of the units are fully furnished with giveaway furniture, while buyers would have to spend an additional 20-30% of unit price to have interior decoration for a unit in China.
"Thailand was ranked the fifth top country where Chinese looked for property to buy after US, Australia, Canada and New Zealand," he said. "Last year some purchased entire condo towers to either convert into hotels or resell to buyers in China."
According to Juwai.com, a Chinese website for buyers of overseas property, Chinese demand for Thai properties rose by 180% in the second quarter last year from the same period in 2015, which saw only 37% growth.
Mr Wason said the yuan rose 19% against the baht, driving a number of Chinese buyers to take this advantage to buy a Thai property.
The website also reported that top destinations in Thailand where Chinese preferred to buy property were Bangkok (29.3%), followed by Chiang Mai (21.8%), Phuket (17.3%), Pattaya and others with 15.8% each.
"Bangkok is the most preferred as it is a large stable market where property prices tend to rise," he said in a seminar on property sales and marketing in China held yesterday by the Real Estate Sales and Marketing Association (Resam). "Chinese love Chiang Mai as property prices have remained low, with good medical services at affordable prices and a lot of international schools."
Only Hainan, the smallest and southernmost Chinese province, is situated in the tropical zone. As it is a key safe haven for Chinese in the winter, the beach town of Sanya in the province saw skyrocketing property prices last year.
He said strong demand in resort homes in Sanya made house prices rise close to the same level of those in major capitals like Shanghai and Beijing or around 25,743 yuan or 128,715 baht per sq m on average.
This shift has brought buyers' attention to Phuket and Pattaya, where prices remain lower than in Sanya. In Pattaya, prices range from 50,000-110,000 baht per sq m or 81,500 baht on average.
Resam honorary president Manop Bongsadadt said Thai property brokers should improve Chinese language marketing and sales strategies as well as legal knowledge if they want to profit from the booming demand.