Thai condo market dominated by Chinese and Russian investors

[webfact]

 

Foreign buyers from China and Russia dominated the Thai condominium market in 2023, as per data from the Real Estate Information Center (REIC). The report disclosed a total of 14,449 units, valued at 73.2 billion baht, were purchased by international buyers, marking a 25% increase from 2022.

 

Chinese investors led the way, acquiring 6,614 units, approximately 46% of the total sales, amounting to 34.1 billion baht. Russian buyers followed, purchasing 1,260 units. Myanmar and the United States buyers trailed in the third and fourth positions, respectively.

 

Interestingly, the highest average price per unit, at 6.6 million baht, was paid by buyers from Myanmar. The majority of these sales, about 41%, were recorded in Chon Buri, known for the resort city of Pattaya and numerous industrial estates.

Bangkok’s condominium sales to foreigners accounted for 38% of the total, with units priced below 3 billion baht making up nearly half of these purchases. It is noteworthy that in 2023, condominiums bought by foreign investors constituted approximately 13.4% of all transferred condos. The law stipulates that foreigners can own up to 49% of a condominium development’s usable space.

The surge in sales was attributed to temporary visa waivers granted to tourists from China and other countries last year, along with a permanent bilateral waiver with Beijing from March 1, the REIC reported. Geopolitical conflicts such as Russia’s war with Ukraine and political instability in Myanmar were also factors.

 

REIC acting director Wichai Wiratkaphan believes the foreign condominium purchases are improving and returning to normal.

 

Foreign condominium sales in 2023 were 13% higher than the 12,798 units sold for a total of 50.6 billion baht in 2019, as per REIC data.

 

Tourism, a sector directly responsible for about 12% of the country’s gross domestic product and nearly a fifth of jobs, is viewed by Prime Minister Srettha Thavisin as a key driver to boost the country’s sluggish economic growth. Along this line, last year, the government waived visas for travellers from China, Russia, Kazakhstan, India and Taiwan. Additionally, airlines were instructed to add more routes and streamline airport operations to reduce waiting times.

 

The Tourism Authority of Thailand anticipates a further recovery to between 35 million and 40 million visitors this year, including 8.2 million from China. This projection brings the country closer to the record of almost 40 million visitors set in 2019, before the pandemic, reported Bangkok Post.

 

Picture courtesy of Stay in Thailand

 

by Alex Morgan

Picture courtesy of Bangkok Expats

 

Source: The Thaiger 2024-04-05

 

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[Mike Lister]

Hmm, doesn't look like the threat of new tax laws has put a dent in that market after all!

[impulse]

10 minutes ago, Mike Lister said:

Hmm, doesn't look like the threat of new tax laws has put a dent in that market after all!

 

I doubt many of the people hiding their dirty money in Thai real estate are going to be tax residents.

 

[Mike Lister]

1 minute ago, impulse said:

 

I doubt many of the people hiding their dirty money in Thai real estate are going to be tax residents.

 

"sales to foreigners accounted for 38% of the total, with units priced below 3 billion baht making up nearly half of these purchases".

 

I'm sure the article intends to read, 3 million and not 3 billion, which doesn't sound like dirty money territory to me. 

[redwood1]

This just proves my point the Russians Chinese and Indians dont plan on pay a 35% tax on anything now or EVER in the future, not one baht....The 35% tax is only for retired western expats worry wart hand ringers.....lol

[impulse]

4 hours ago, Mike Lister said:

I'm sure the article intends to read, 3 million and not 3 billion, which doesn't sound like dirty money territory to me.

 

Depends on how many they buy.

 

[Mavideol]

4 hours ago, webfact said:

political instability in Myanmar were also factors.

and yet they came 4th on the buyer's list, one has to wonder where the money came from

[spidermike007]

A Russian person that I know told me that for a fact very very few Russians earning over $60,000 a year are NOT involved in crime. I wonder if the same applies to the Burmese, how many wealthy Burmese that are earning their money legally, are buying condos here in Thailand? 

[Zack61]

Yikes. There goes the neighbourhood. A bit of due diligence will be required if one is buying into a condo down the track sometime. 

[goldenbrwn1]

Most will stand empty . There was a similar thing in the UK years back until the City got put in its place by geo politics . Now the Russians and Chinese are spreading out . I have met around 10 Russians who I now know very well  in my time coming to Thailand . All are involved in crime in one way or another and some more than others , nice fellas though and I still meet up with some of them for drinks. 
 

I will add that I’m not a magnet for Russians but I know a few phrases and can do small talk in Russian , esp when I’m drunk . My Thai is also exceptional when drunk 😂 

[Hardcastle P]

So much for sanctions on Russians and the blocking of Swift transfers. 

Well done Thailand.you are obviously not concerned with Putins invasion of Ukraine 

[CFC Jomtien]

I suspect that many of the condos would have been purchased for investments or the rental market. And many will remain empty for years to come. 

[hotchilli]

5 hours ago, webfact said:

Foreign buyers from China and Russia dominated the Thai condominium market in 2023, as per data from the Real Estate Information Center (REIC). The report disclosed a total of 14,449 units, valued at 73.2 billion baht, were purchased by international buyers, marking a 25% increase from 2022.

Good news for the developers, maybe not such good news for Thailand in the future.

[Guderian]

Yes, I can just see all the draft-dodging Ivans living it up like this.... lol

 

[newnative]

5 hours ago, Mike Lister said:

Hmm, doesn't look like the threat of new tax laws has put a dent in that market after all!

Sales figures are for 2023.  2024 sales will be more of an indicator of the effect of the new tax laws on property sales by foreigners.

[frank83628]

37 minutes ago, Hardcastle P said:

So much for sanctions on Russians and the blocking of Swift transfers. 

Well done Thailand.you are obviously not concerned with Putins invasion of Ukraine 

why should Thailand be?  sanctioned have all but failed or backfired!

[CANSIAM]

Tourism 12% of GDP ? Come on spit it out…..more like 40-50%. 

[Montnoveau]

1 hour ago, Hardcastle P said:

So much for sanctions on Russians and the blocking of Swift transfers. 

Well done Thailand.you are obviously not concerned with Putins invasion of Ukraine 

Yes... I don't understand Thailand's craze for these rogue states.

[Frankie baby]

Financially, some turbulent times a-head for all. Everything seems a gamble at the present. Keep your cash for safer times.  

[Marco51]

6 hours ago, webfact said:

 

Foreign buyers from China and Russia dominated the Thai condominium market in 2023, as per data from the Real Estate Information Center (REIC). The report disclosed a total of 14,449 units, valued at 73.2 billion baht, were purchased by international buyers, marking a 25% increase from 2022.

 

Chinese investors led the way, acquiring 6,614 units, approximately 46% of the total sales, amounting to 34.1 billion baht. Russian buyers followed, purchasing 1,260 units. Myanmar and the United States buyers trailed in the third and fourth positions, respectively.

 

Interestingly, the highest average price per unit, at 6.6 million baht, was paid by buyers from Myanmar. The majority of these sales, about 41%, were recorded in Chon Buri, known for the resort city of Pattaya and numerous industrial estates.

Bangkok’s condominium sales to foreigners accounted for 38% of the total, with units priced below 3 billion baht making up nearly half of these purchases. It is noteworthy that in 2023, condominiums bought by foreign investors constituted approximately 13.4% of all transferred condos. The law stipulates that foreigners can own up to 49% of a condominium development’s usable space.

The surge in sales was attributed to temporary visa waivers granted to tourists from China and other countries last year, along with a permanent bilateral waiver with Beijing from March 1, the REIC reported. Geopolitical conflicts such as Russia’s war with Ukraine and political instability in Myanmar were also factors.

 

REIC acting director Wichai Wiratkaphan believes the foreign condominium purchases are improving and returning to normal.

 

Foreign condominium sales in 2023 were 13% higher than the 12,798 units sold for a total of 50.6 billion baht in 2019, as per REIC data.

 

Tourism, a sector directly responsible for about 12% of the country’s gross domestic product and nearly a fifth of jobs, is viewed by Prime Minister Srettha Thavisin as a key driver to boost the country’s sluggish economic growth. Along this line, last year, the government waived visas for travellers from China, Russia, Kazakhstan, India and Taiwan. Additionally, airlines were instructed to add more routes and streamline airport operations to reduce waiting times.

 

The Tourism Authority of Thailand anticipates a further recovery to between 35 million and 40 million visitors this year, including 8.2 million from China. This projection brings the country closer to the record of almost 40 million visitors set in 2019, before the pandemic, reported Bangkok Post.

 

Picture courtesy of Stay in Thailand

 

by Alex Morgan

Picture courtesy of Bangkok Expats

 

Source: The Thaiger 2024-04-05

 

Get our Daily Newsletter - Click HERE to subscribe
 

The problem for many expat apartment owners or interested parties who actually intend to live in one will be that most of at least the chinese owners buy these as investment using them as Air BnB apartments with constant in and out and party and noise and and and. This in Thailand completely unregulated market is already fact in almost all apartment buildings in the low and medium priced section in Chiang Mai and even Thai owners being not so touchy about their peace and quiet are completely unnerved meanwhile. And the question is here : making money in this way in Thailand, then Air BnB transfering it out to a Bank, probably in Hongkong or Cyprus or Malta: no tax, ey? Not like the petty pensions of the unshowered farang, right ? Those Must be taxed 1 way or another.

[Cabradelmar]

Chinese repression and stagnant economy, as well as Putin's warmonger is good for business. In an oversupplied condo market it's really interesting to see how people choose to invest. 

[LALes]

When I bought my condo 17 years ago, There was not a chinese, russian or indian in sight.  This is the brave new world.  I wouldn't buy anything in Thailand now without first living in the building for 6 months.

[rudi49jr]

Anyone want to hazard a guess as to how much ‘black money’ is being laundered this way? I wouldn’t be surprised at all if it’s a huge percentage.

[Dogmatix]

Generally the hookers do very well in casinos. It's lucky that Thailand has copious capacity and won't need to import any, except for specialties like Russians etc.  Places like Sri Lanka need to import hookers for their casinos and guess what country to they turn to - the LOS of course.  The girls will be happy to work the casino gig at home in stead.

[sambum]

"The Tourism Authority of Thailand anticipates a further recovery to between 35 million and 40 million visitors this year, including 8.2 million from China."

 

Just when I thought they'd gone to sleep, or on holiday, along they come with another of their "anticipations" - Yawn!

[Mike Lister]

1 hour ago, CANSIAM said:

Tourism 12% of GDP ? Come on spit it out…..more like 40-50%. 

Total exports are only 60% of GDP and international tourism is regarded as an export. If International Tourism was 40 or 50%, that would mean the country hardly exports anything!.

[newnative]

53 minutes ago, Marco51 said:

The problem for many expat apartment owners or interested parties who actually intend to live in one will be that most of at least the chinese owners buy these as investment using them as Air BnB apartments with constant in and out and party and noise and and and. This in Thailand completely unregulated market is already fact in almost all apartment buildings in the low and medium priced section in Chiang Mai and even Thai owners being not so touchy about their peace and quiet are completely unnerved meanwhile. And the question is here : making money in this way in Thailand, then Air BnB transfering it out to a Bank, probably in Hongkong or Cyprus or Malta: no tax, ey? Not like the petty pensions of the unshowered farang, right ? Those Must be taxed 1 way or another.

      At this point in time everyone knows, or should know, about the big problems that Airbnb and the like cause with some condo projects.  I say 'some' condo projects because it is not a big problem for every project.  Those that seem to have the most problems are: #1.  new or newer projects.  #2.  large projects with 500 units or more.  And #3, the trifecta:  new or newer large projects in popular tourist areas with most of the units in the 30 to 35 sqm range.

     Someone doing illegal daily rentals will love #3.  A new project in a tourist area with a large number of small units will allow this type of investor to easily purchase multiple new units all at one time, to maximize profits and staff economics.  And, the popular tourist area will, hopefully, provide a steady stream of illegal short-term tourist renters.  The small units now being built are cheaper to buy than larger units and work well as illegal hotel rooms.

      Speaking from experience, I owned condos at three different, new at the time, large projects in Pattaya in prime tourist areas.  All three projects had around 1000 units or more, with most of the units in the 30 to 35 sqm range.  All three projects became plagued with illegal short-term rentals.  I no longer own any of the condos.  On the plus side, the projects were popular and I was able to sell all at a profit--I just didn't want to live long-term at any of them.

      When I finally smartened up, the last condo I owned before moving to a house was at an older condo project with less than 100 units, with the smallest unit size at 64 sqm.  Quite a difference--I felt like I was living in a residence rather than a very busy,noisy, unpleasant hotel.  

     At this point, it's really a case of the old saying, buyer beware.   Check very carefully before buying.  What is the project's attitude towards illegal short-term rentals?  What specific measurements are in place to deter owners from doing illegal short-term rentals?  How effective are they and how is the enforcement--good or bad?   Spend time observing at a project you are interested in and talk with residents and staff.

    Although I no longer own there, I still get the newsletter of the last condo project I owned at.  Even though short-term rentals were not a big problem, the project is still being proactive by putting in facial recognition technology.  Each condo is limited to 6 facial scans and to be scanned into the system you need to show either condo ownership or a rental contract of at least 6 months.  This is the sort of thing to be looking for, technology that will make it more difficult to do the illegal rentals, and a project that is not ambivalent about cracking down, due to too many investment owners.

[sambum]

6 minutes ago, Mike Lister said:

Total exports are only 60% of GDP and international tourism is regarded as an export. If International Tourism was 40 or 50%, that would mean the country hardly exports anything!.

 

From Statista in 2022:-

"This statistic shows the share of economic sectors in the gross domestic product (GDP) in Thailand from 2012 to 2022. In 2022, the share of agriculture in Thailand's gross domestic product was 8.81 percent, industry contributed approximately 35 percent and the services sector contributed about 56.19 percent."

[Mike Lister]

4 minutes ago, sambum said:

 

From Statista in 2022:-

"This statistic shows the share of economic sectors in the gross domestic product (GDP) in Thailand from 2012 to 2022. In 2022, the share of agriculture in Thailand's gross domestic product was 8.81 percent, industry contributed approximately 35 percent and the services sector contributed about 56.19 percent."

Gosh, 65.78%-56.19%, hmm, that's tiny! I suppose that means Thailand really does only export almost next to nothing by way of Customs Exports goods, no agricultural produce, no cars, no electronics, no gold jewellery, wow, that's amazing. I wonder what they do with all the stuff they make, I suppose they must put them in a landfill somewhere and grow rice over it!

 

Exports of goods and services (% of GDP) in Thailand was reported at 65.78 % in 2022, according to the World Bank collection of development indicators, compiled from officially recognized sources. Thailand - Exports of goods and services (% of GDP) - actual values, historical data, forecasts and projections were sourced from the World Bank on April of 2024.

https://tradingeconomics.com/thailand/exports-of-goods-and-services-percent-of-gdp-wb-data.html

 

[siddv]

I'm shocked. The two countries most involved with world wide money laundering. Thailand the new Switzerland of  East Asia.