(CTN NEWS) – Thailand continues to captivate foreign property buyers as an enticing destination, especially for those in search of a second home, despite certain limitations on property ownership.
As the post-Covid era unfolds and the situation gradually stabilizes, the allure of Thailand’s real estate market is becoming increasingly irresistible.
Notably, property developers have witnessed a remarkable surge in sales figures from foreign customers in the first quarter, even in the absence of Chinese buyers who played a prominent role during the 2018-19 period.
With the eventual resumption of international trips by Chinese nationals, the market is poised to grow even stronger, heralding a promising future for foreign property investment in Thailand.
Factors Driving Foreigners to Invest in Residential Property in Thailand
The Appeal of Thailand: Why Foreigners Choose to Invest in Residential Property
Foreigners purchasing residential property in Thailand are driven by a range of factors that contribute to the country’s overall appeal.
These reasons align closely with the motivations behind tourists visiting Thailand.
Notably, the affordable cost of living, delectable cuisine, warm hospitality, convenient travel options, and unique culture all play a significant role in attracting foreigners to the country.
Tourist Experience: Many foreign buyers have previously experienced Thailand as tourists, which influences their decision to invest in real estate in the country.
They are drawn to the captivating aspects of Thailand that they have already encountered during their visits.
Relocation and Education: In recent years, additional factors have emerged to attract foreign buyers, such as the desire to relocate from their home countries, provide quality education for their children, and explore investment opportunities.
Thailand’s thriving real estate market offers a diverse range of properties to cater to these needs.
Changing Market Dynamics: The Phuket Real Estate Association highlights a shift in the market, with Russian nationals emerging as the largest group of foreign visitors to Phuket.
Russian buyers have also become the primary market for condo transfers, surpassing Chinese buyers. This trend has been observed since the onset of the Russian-Ukraine war in February 2022.
Appealing Property Options: Russian buyers, in particular, show a preference for pool villas with 2-5 bedrooms, as they seek spacious accommodations for their families.
These villas typically fall within the price range of 20 to 60 million baht, making them an attractive choice for Russian buyers.
Education and Serene Environment: Phuket’s appeal extends to its educational offerings, with 13 international schools providing British, American, and French curriculums.
This has prompted parents from Hong Kong and Singapore to relocate their children to Phuket for education.
Additionally, the less crowded environment of Phuket appeals to families seeking a safer and more serene location for their children’s education.
Culinary Delights: Phuket’s recognition as the “City of Gastronomy” by Unesco in 2015 adds another dimension to its appeal.
The variety of culinary options, including traditional Thai cuisine and international flavors, contributes to the overall allure of the region.
Rising Trend: The increasing number of students enrolled in top international schools and the growing interest in Phuket’s culinary offerings and healthcare services are expected to drive property purchases in the area.
Sales of luxury villas, particularly those with contemporary Thai designs priced between 10 and 50 million baht, have risen by 30%, with Westerners residing in Singapore as key buyers.
By understanding the underlying factors that drive foreigners to purchase residential property in Thailand, one can gain insights into the attractiveness of the country’s real estate market and its appeal to international buyers.
Chinese Buyers Dominate the Real Estate Market in Thailand
The Dominance of Chinese Buyers in Thailand’s Real Estate Market
In terms of buyers, the largest market in Thailand’s real estate sector is consistently led by purchasers from China.
Over the past five years, Chinese nationals have accounted for a significant share of condo transfers, ranging from 49% to 63% of the total, as reported by the Real Estate Information Center (REIC).
Despite challenges related to outbound travel, Chinese buyers maintained their position as the largest group receiving condo transfers in Thailand in the previous year.
They represented nearly 50% of both volume and value of transfers, according to Vichai Viratkapan, the acting director-general of REIC.
The primary motivation behind their purchases was investment, with Chinese buyers opting for smaller-sized units compared to other foreign buyers.
In 2022, the average preferred unit size for Chinese buyers was 39.2 square meters, while the overall average size stood at 45.9 square meters.
Additionally, the average unit price for Chinese buyers was 5.1 million baht, equivalent to 1 million yuan, making it an affordable choice for middle-income buyers.
Chinese buyers also held the top position in seven out of ten major tourist destinations in Thailand, including Bangkok, Chon Buri, Chiang Mai, Samut Prakan, Nonthaburi, Pathum Thani, and Rayong.
Kajonsit Singsansern, the chief executive of property developer Siamese Asset Plc, noted that Chinese buyers sought to acquire a second home in Thailand after visiting as tourists.
They were also attracted by the potential return on investment.
The majority of Chinese buyers belonged to the middle-income segment, typically spending around 1-2 million yuan or 5-10 million baht to purchase a condominium unit, with Bangkok being their primary destination.
Other popular locations for Chinese buyers included Phuket, Pattaya, and Chiang Mai.
Property developer Habitat Group’s chief executive, Chanin Vanijwongse, highlighted the strong demand from Chinese and Russian buyers for condos and villas in Chon Buri since the beginning of the year.
With Chinese and Russian buyers returning, property agents targeting these markets have witnessed a resurgence in activity. Three-bedroom pool villas priced above 10 million baht are particularly popular among these buyers.
The dominance of Chinese buyers in Thailand’s real estate market underscores their strong interest in investment opportunities and the appeal of Thailand as a second home destination.
Emerging Market: Myanmar Buyers Invest in Second Homes in Thailand
Myanmar buyers are increasingly seeking to acquire second homes in more secure and stable countries like Thailand, according to Karlo Pobre, managing director of CIM Property Consultants, a property consultant based in Yangon.
Pobre stated that many affluent families from Myanmar are purchasing second homes in Thailand for three main reasons: wealth preservation, access to healthcare services, and educational opportunities for their children.
In 2022, Myanmar emerged as the sixth-largest market for condo transfers in Thailand, marking its first appearance in the top 10 ranking.
A total of 349 units were transferred, placing Myanmar buyers in third place in terms of transaction value, with 2.55 billion baht. They surpassed American, British, and French buyers in terms of the number of units transferred.
The average price per unit for condos transferred to Myanmar buyers was the second highest among foreigners, at 7.3 million baht, just behind Taiwanese buyers at 7.4 million baht. The overall average price per unit was 5.1 million baht.
Pobre noted that the average price per unit for condos in Yangon, Myanmar, was approximately $250,000 or 8.5 million baht, with an average size of 70-100 square meters and two bedrooms, catering to large families spanning two or three generations.
Comparatively, condos in Thailand within the same price range offer better quality and serve as more secure investment options.
When selecting a second home in Thailand, Myanmar buyers favor Bangkok as the top city, particularly in areas near mass transit lines such as Sukhumvit.
Proximity to healthcare services and educational institutions also plays a significant role in their decision-making process.
Apart from condo transfers, Myanmar nationals have continued to purchase new condos in Thailand, as reported by property developer Noble Development Plc.
In the first quarter of this year, buyers from Myanmar accounted for the second-largest share, with approximately 360 million baht in condo presales, representing 26% of the total presales of 1.4 billion baht recorded from overseas markets.
The growing interest of Myanmar buyers in acquiring second homes in Thailand highlights their desire for secure investments and access to essential services, further shaping the real estate landscape in the region.
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