80% of condos in Thailand sold to foreigners, 50% China

[reader]

From The Thaiger / Asean Now

A real estate firm is predicting that the market for condos in Thailand hot spots like Bangkok, Phuket, and Pattaya will be rebounding soon with the continued trend of foreign investment, a majority of which are Chinese. China has long been a driving force in purchasing condos in Thailand.

The business development manager of Saensiri is predicting the uptick once Covid-19 outbreaks are wrangled and brought under more control and general vaccinations across the Thai population increases. The manager said that foreigners make up the vast majority of those purchasing condos throughout Thailand, with 80% of the 325 billion baht industry being driven by international buyers.

Of those international buyers, Chinese investors are by far the most dominant purchasers, with 50% of all acquisitions of condos in the last 2 years coming from China and another 30% coming from Hong Kong. The last 20% of buyers also include Taiwanese clients, some American customers, and then mostly buyers from European countries, especially those in the United Kingdom, France, and Germany making purchases of condos.

While statistics show that the majority of westerners look towards purchasing condos in Thailand as a destination for a holiday home, they are still keen on renting out their home when they are not residing in Thailand. On the other hand, the majority of buyers from Hong Kong and China seek to purchase condos in Thailand as an investment and aim to make them purely rental properties.

https://thethaiger.com/hot-news/economy/80-of-condos-in-thailand-sold-to-foreigners-50-china

[vinapu]

that means , like in many other countries locals are being priced out of market

[caeron]

 

I think It isn't generally good when lots of a place's housing is only occupied part time. It prices out the locals as vinapu says, and those people are only spending money in the economy when they're in town (though probably a fair bit more spend than a local while they're in town).

[Guest]

I'd imagine many wealthy Chinese might not trust their government 100%, so they want some money outside the country.  If the Thai government adds in an Elite Visa scheme, with residency rights for an extended period, that's an even better backup plan.  So no wonder there is overseas interest.

 

[spoon]

I believe 50% or more of any condo has to be own by thai is still in effect. So if 80% of the sales were bought by foreigners, i assumed there are plenty of unsold thai quota condos out there as well? 

[PeterRS]

2 hours ago, spoon said:

I believe 50% or more of any condo has to be own by thai is still in effect. So if 80% of the sales were bought by foreigners, i assumed there are plenty of unsold thai quota condos out there as well? 

I can't see anything in the quote about these being new condos. So Thais may already own a large number of condos in existing blocks.

But I recall reading not so long ago that Chinese are purchasing as it is a way of getting cash out of the country.legally. Not sure what the limit is now, but it used to be US$50K per annum for individuals. That is one reason why Thai developers, especially in Bangkok, have been putting up lots of condo blocks with units of only around 25-30 sq. meters near the end of BTS and subway lines. Before the new Chinese law in Hong Kong, many young people were also buying in Thailand, and also as an investment. Housing in Hong Kong was  -and I assume still is - amongst the most expensive in the world. It was estimated that a young couple in their 20s would take until retirement to pay off the mortgage on a very small apartment well out of the city. So many were parking cash in Bangkok condos in the expectation that after about ten years they would have risen sufficiently in value that the couple could get a more affordable home in Hong Kong.

But the concern for Thais surely is that so many condos will remain empty - unless there is sufficient rental demand from those moving in to the city from the provinces.

6 hours ago, z909 said:

I'd imagine many wealthy Chinese might not trust their government 100%, so they want some money outside the country.  If the Thai government adds in an Elite Visa scheme, with residency rights for an extended period, that's an even better backup plan.  So no wonder there is overseas interest.

Partly, yes. But most Chinese wealthy enough to park money overseas are very unlikely to want to emigrate for even part of a year. They live well and they actually trust their government to continue its policy of economic development. Odd though it may seem, Shanghai has for several years been a more advanced city than Hong Kong in terms of quality of life and what that life offers. I doubt if any believe the government will start interfering with those advances because it is perfectly well aware that its very existence depends on making life better for the Chinese people.

Very sadly that does not apply to the Uyghurs or the Tibetans. But I know it will surprise many that the vast majority of Chinese are perfectly happy living in China. They just want added protection for their spare cash since they know their banking system is not strong and their stock markets too volatile.

[Guest]

6 hours ago, PeterRS said:

Partly, yes. But most Chinese wealthy enough to park money overseas are very unlikely to want to emigrate for even part of a year. They live well and they actually trust their government to continue its policy of economic development.

Whilst all is going well in China, I suspect most would want to continue to live in China and they live well.   However, in many parts of the world, there are a certain percentage of people who want backup plans, in case there is a change for the worse.     Ranging from offshore assets to second passports.

Portugal has a scheme where investors in property can eventually acquire a Portugese (EU) passport.    That is very popular with the Chinese.

Whether or not the Chinese trust the government is difficult to tell, as criticizing the government is again becoming more difficult with the current regime.

 

[PeterRS]

On 9/4/2021 at 4:54 PM, z909 said:

Whether or not the Chinese trust the government is difficult to tell, as criticizing the government is again becoming more difficult with the current regime.

I think it is important to realise that the Chinese have very long memories. Most families will still have older members who recall the supreme disaster of the Cultural Revolution which destroyed so much of the country and it culture with its education and judicial systems wiped out. China was till then an agrarian society with most of its population desperately poor. I can recall my first visit to Shanghai in 1986 barely ten years after that disastrous period in Chinese history when lamplighters still lit the streetlamps in the French quarter!

These grandparents still cannot believe how the country has changed out of all recognition. I know I have said it before but how many countries have ever in world history dragged 400 million or more out of poverty in the span of just one generation? How many countries have enjoyed massively increased and increasing incomes since then? How many could have possibly considered that Shanghai would become an even more cosmopolitan city than pre-coved Hong Kong?

From my Chinese and western friends who live in China, I know well that there are costs to such rapid growth. Those of us brought up in the west would probably find it difficult to live in any country where our freedom to think and say (within reason) what we want is curtailed. But we look at this country of 1.4 billion people from our own western experiences. The vast majority of those who live in the country have a different mindset borne of their history and society when for the entire millennia of their existence they have lived under a similar system. The average Chinese today puts up with its unelected government because they can compare what it has achieved in little over 40 years. My friends are perfectly happy living in China and none, not even the Americans with Chinese boyfriends, some wealthy in their own right, want to live anywhere else. 

The inevitable question then becomes: how long can any people live under a virtual dictatorship? My only answer is as long as the compact between government and people that people's lives continue to improve. 

[macaroni21]

On 9/10/2021 at 11:38 AM, PeterRS said:

But we look at this country of 1.4 billion people from our own western experiences.

Indeed, different cultures use different metrics to judge their rulers. Western societies with a long history of democratic development give strong weight to what is known as "representative legitimacy" -- a government is considered acceptable and legitimate when it is representative of the people. When seen through the centuries even of European history, this is actually a very recent way to see things. 

In many other parts of the world, the biggest weight is given to a different metric: "Performance legitimacy" -- a government is considered acceptable and legitimate when it delivers a better life. This better explains the persistence of authoritarian governments; they still have a bedrock of support and any resistance just does not catch fire so long as the rulers deliver progress.

We need to bear this distinction in mind whenever we read of protests against governments. Too often Western media might cast the grievance of the demonstrators as that of unrepresentativeness of the government, when in fact the impetus for protests has much more to do with the failure of the government to deliver a better life. Partly it has to do with the fact that it makes better copy for the protestors to shout slogans that mimic calls for democracy. Partly too, they see a nexus between the uncaring attitudes of an unrepresentative elite (particularly corrupt ones) and the daily grind of the poor. But again and again, we've seen in history how, after protests have succeeded, what followed was not necessariily a more "democratic" government. 

And they're OK with it. They see the messiness of Western democracies, and the very underwhelming performance of democratically elected governments in Latin America, and they say: "That's not for us".

I'll just mention Afghanistan -- but I won't go further. Too much of the effort in the last 20 years had been to ensure that the country had elections and a "democratic government". In the end the representative legitimacy of the the government counted for little when it had no performance legitimacy. Huge numbers of people in the countryside were agnostic about the Taliban taking over. The misplaced focus of the last 20 years all but guaranteed today's outcome.