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What lies behind this recent surge in popularity that has made Thailand one of the top playgrounds for both middle-class and high-net-worth Chinese?
We examine why the Land of Smiles has charmed so many Chinese – whether as a tourist, an investor, a retiree migrant, or an expatriate.
The US, Canada or Australia are all top picks for real estate buyers from China, but that also means long haul flights of over 10 to 13 hours.
Thailand, however, is just a short six hours away from China, and that makes it a pretty perfect location for Chinese buyers to move to, as it is far enough for them to savour a more liberated and desirable lifestyle, yet close enough for frequent trips back to visit friends and family.
Easy and convenient accessibility via plenty of flight options from different parts of China to Thailand is also a boon, such as Thai Lion Air that recently launched its new international route from Chiang Rai to Changsha.2
With more flight routes in the pipeline to connect Thailand and China, such connectivity and convenience hold great appeal to Chinese real estate investors.
Compared to the red-hot property prices in China right now, Thailand’s CBD condominiums and resort properties look like a downright bargain for homebuyers from mainland China.
For example, house prices for resort homes in Sanya – the top luxury local travel destination for affluent Chinese often touted as ‘China’s Florida’ – is around RMB 25,743 (THB 128,715 / $3,859) per sm on average.3
However, house prices in the beach paradise of Pattaya – the most popular Thai city for Chinese buyers on Juwai.com1 – merely costs around THB 81,500 (RMB 16,380 / $2,455) on average.3
This, along with less complicated sales-purchase conditions plus lower downpayment rates and property transfer fees8, pose an extremely alluring investment opportunity – one which is seeing more and more middle-class and upper-middle-class Chinese property hunters leaping at this chance to own a home in Thailand.
Furthermore, cost of living in Thailand is enviably low as well. Combined with Thailand’s attractive and laidback lifestyle thanks to its beautiful beaches, vibrant nightlife, friendly locals, and world-class yet affordable medical facilities…this makes for an extremely comfortable lifestyle that most Chinese would be unable to afford back in China.
Thailand allows foreign buyers direct freehold ownership of condominiums, as well as common property co-ownership.
This is incredibly enticing for Chinese buying real estate, as it is impossible for mainland Chinese to own freehold property in China, whose residential land lease policy only allows Chinese to own their China property for up to 70 years.4
With the recent clamour in China over the fate of these 70-year home leases upon expiry4, being able to own a condominium home in Thailand indefinitely is undoubtedly a powerful temptation for any Chinese buyers.
Thailand is already home to one of the world’s largest Chinese diaspora out of China, so its culture and cuisine already offers enough similarity that would be easier for mainland Chinese to adapt to.
However, it’s the recent surge in Chinese migration to Thailand migrants – approximately 400,000 of them over the past decade5 – that is drawing Chinese property investors to the Land of Smiles.
Beyond enjoying the comfort of familiar languages and a sense of community, it’s the economic opportunity that is proliferating along with the fourth wave of mainland Chinese to Thailand that holds great appeal to Chinese property buyers.5
After all, building a new life in Thailand will require a steady source of income, and launching a business in Thailand is comparatively easier, thanks to lesser red tape and its openness to foreign investors.5
Paired with Thailand’s deepening economic ties with China6, China’s increase in infrastructure projects in Thailand, and the fact that China has been Thailand’s largest trading partner each year since 20127, all these bodes well for Chinese migrants seeking to forge business opportunities and connections in Thailand.
Besides relatively inexpensive housing prices, less complicated sales-purchase conditions, as well as lower downpayment rates and property transfer fees, real estate in Thailand offers good rental yields too.8, 9
Steady rental demands from holiday homes and expatriates in Thailand mean great rentability and impressive returns, which is always a draw for Chinese real estate investors.
Bangkok alone offers rental yields of up to 7%10, which is particularly attractive if you put it up against China’s current rental yields, which has slipped below 2% in 13 major cities, including Beijing, Shanghai, Guangzhou, and Shenzhen, according to China R&D Institute.11
Thailand’s relatively gay-friendly culture and high tolerance for same-sex relationships has given birth to a vibrant and thriving lesbian, gay, bisexual or transgender (LGBT) community, and this had made Thailand highly enticing for many property buyers hailing from China’s LGBT population.12
This is because while China has advanced and progressed in so many aspects, it remains culturally conservative when it comes to embracing same-gender relationships, especially as China’s traditional family value hinges heavily on the belief that Chinese sons are responsible for carrying on the family name.13
So, while there are no laws against having a partner of the same gender in China, it is still very much frowned upon by many Chinese who generally are not accepting of such unconventional relationships, much less same-sex marriage.
Thailand’s Bangkok is the top ranked Asian city on Nestpick’s list of top 100 Best LGBT Cities 2017, while Beijing came in last.14
In fact, only 4% of 20,000 LGBT Chinese are openly gay – compared with over half in the US – according to WorkForLGBT, a non-profit network for LGBT employees in China.15
Hence, many LGBT Chinese remain stuck in the closet and lead double lives, even as they continue their struggle for acceptance and gay rights.
Faced with such discrimination and prejudice from loved ones and the authorities – including a most recent regulation by the China Netcasting Services Association (CNSA) that bans ‘abnormal sexual behaviours’ in online video and audio content16 – many same-sex couples from China are increasingly looking towards moving overseas to escape prying eyes.12
Their pick? Thailand, their dream destination to buy a second home to migrate to12, and their most viable option for a shot at living openly and being accepted for who they are.
There are plenty more factors that make Thailand such a dream investment destination, but the abovementioned factors already make it easy enough to see why Thailand has surged in popularity with homebuyers from China.
That said, which areas in Thailand are Chinese real estate buyers eyeing lately? Find out next week.