Thailand is still an appealing destination for residential condo investors due to low prices and high rental yields, according to a new CBRE report. Another reason the country is attractive is that it has relatively low down payments and small transfer fees when compared to other countries.
The demographics of foreign condo buyers in Thailand is changing, however. In the past, most buyers came from Hong Kong and Singapore but recently Chinese interest has picked up. Thai developers have always been looking at ways to expand their customer base by holding overseas road shows due to weak domestic demand in the past 2 years.
The increase in Chinese buyers purchasing condo units in Bangkok and other major tourist destinations in Thailand has coincided with an influx in tourist arrivals. With more Chinese tourists visiting Thailand, it is expected that more of them will want to purchase property, finds the CBRE Thailand Viewpoint report.
Thailand was ranked 7th in the world for Chinese searches for real estate investment in 2016 on Baidu, China’s top search engine and web portal. The bulk of investors want properties that are priced under THB10 million with Bangkok’s CBD the preferred area since it offers easy access to mass transit stations. Purchases in tourist hotspots such as Chiang Mai, Pattaya, and Phuket are also on the rise.
However, there are several challenges Thai developers face when trying to enter the Chinese market. The county has strict capital controls that limit how much money a citizen can bring out of China. There are also restrictions on capital outflows for property investment.
If developers want to attract long-term Chinese investment, it is important they understand the demands of Chinese buyers and build projects that suit these needs, notes CBRE. They will also need to provide high-quality customer service throughout the transaction process focusing on providing transparent transaction terms, fee structures, taxation regulations, and transfer processes. This applies to all foreign buyers, not just those from China.