Chinese real estate investors who once snapped up high-end condos and apartments in Thailand are cutting back due to an economic downturn and real estate crisis at home.
Many Chinese invest as much as 70% of their savings in real estate, a sensibility that has benefited Thailand’s luxury condo and apartment sector for several years.
Kashif Ansari, co-founder and CEO of Juwai IQI Group, a real estate marketing firm that helps connect Chinese buyers to properties in Southeast Asia from Kuala Lumpur and other offices, told VOA’s Korean Service that the trend is now leveling off.
“This year, Thailand is no longer the number one destination for Chinese buyers like it was in earlier years,” Ansari said via email. “Instead, it is fifth, and the top four destinations are all the traditional English-speaking countries with prestigious educational sectors.”
Thailand was the top location for Chinese to invest in residential properties from 2018 to 2021, according to the firm’s list of the 10 countries most desired by Chinese buyers. By 2022, Thailand was fourth, and now, in the first half of 2023, it’s fifth.
Thailand’s Real Estate Information Center also found Chinese buyers have been the largest cohort of foreigners buying condominium units in Thailand since 2018, purchasing 3,562 units worth more than $511 million in the first nine months of 2022.
The four most popular countries among Chinese buyers in the first half of 2023 were Australia, Canada, the U.K. and the U.S., according to Juwai IQI.
Ansari said Chinese are buying homes in Australia to move and live there permanently. Chinese purchasing residential properties in Thailand are mostly investors.
“Most Chinese buyers [in Australia] this year have been purchasing for their own use and are on the path to becoming new Australian citizens,” Ansari said. “Many of the buyers that we work with are either students studying in the destination country or are planning on moving to the country and purchasing a home to live in.”
Neighboring Vietnam ranked ninth in Ansari’s survey and, according to real estate agents, is less reliant on Chinese investors than Thailand.
Nguyen Thanh Nga, chairman of Ho Chi Minh City-based Global Green Real Estate property developer, told VOA’s Vietnamese Service that “Chinese investors are mainly interested in apartments in big cities like Hanoi and Ho Chi Minh.”
He said the crash in the Chinese property market has not affected Vietnam and that investment from Chinese investors there remains steady.
Su Ngoc Khuong, senior director of investment at Ho Chi Minh City-based real estate firm Savills Vietnam, told VOA’s Vietnamese Service that Vietnam does not heavily rely on Chinese buyers, adding the foreign buyers using his firm are from the U.S., Europe, Japan, South Korea, Hong Kong and Singapore.
China’s economic uncertainties
According to a study by Shanghai Jiaotong University’s Shanghai Advanced Institute of Finance and financial firm Charles Schwab, overall financial confidence among China’s growing numbers of affluent citizens fell slightly this year, leading them to hold back on high-end purchases.
China’s interwoven economic problems such as a youth unemployment rate so high Beijing stopped releasing the rate as of August, exports dropping 8.8% in August, shrinking household consumption fueling deflation, and a massive real estate crisis have led to speculation that the next step in its decades-long red-hot economic growth may be stagnation.
These financial difficulties at home mean Chinese buyers are hesitating with Thai investments.
Deals now take months
Xin Qui is a founder of Taiheju, a property agency in Thailand that mostly deals with Chinese customers intent on renting or investing in properties in the country.
“During the peak in 2018, it only took us a few weeks to close a deal, or within one week if a client came and saw the property,” she told VOA’s Thai Service in a telephone interview. “Now it takes a few months.”
Prashanth Parameswaran, a fellow at the Wilson Center and founder of the weekly ASEAN Wonk newsletter, told VOA’s Korean Service, “We are seeing a recalibration of post-pandemic economic realities, and that includes the current slowdown of China’s economy.”
“Whether or not this continues in the long run will depend on the actions of other Chinese investors moving forward and what Southeast Asian states can do to manage this fallout both with Beijing as well as with other potential investment sources,” he said.
Yiamyut Sutthichaya and Le Nguyen contributed to this report.
