It may not come as a surprise to say that the largest group of foreign investors or tourists investing in Thailand are from China. However, if we slightly rearrange the wording to say that 'Thailand' is the number one country in Asia where 'China' invests the most in real estate, this statement hides a lot of interesting insights. How is it interesting? TerraBKK has the answers in this article.

            As of 2018, China has a total population of 1.415 billion people, among which there are 'ultra-high-net-worth individuals' who possess assets exceeding $1 billion (approximately 30 billion Thai Baht) numbering 476 individuals. This makes China the second country in the world with the highest number of ultra-high-net-worth individuals, following the United States. Additionally, there are 1.13 million 'millionaires' with assets worth over $1 million! Just think about how significant it is that over 1.13 million Chinese people view 'Thailand' as the top destination for real estate investment in Asia. TerraBKK invites you to consider the interesting data and statistics regarding Chinese investments in foreign real estate.

According to the website juwai.com, in 2017, the investment behavior of Chinese individuals in foreign real estate indicated that the top three countries where Chinese people prefer to invest in real estate are the United States, Australia, and Thailand, surpassing Canada and the UK, which previously held the third position. Interestingly, that same year, the dark horse that gained the most momentum was 'Vietnam', signaling that Chinese investors are increasingly turning to invest in real estate in Asia. The main reasons for Chinese real estate investors' interest in Southeast Asia include:

Chinese tourists are increasingly visiting Southeast Asian countries

            It is well-known that nowadays, no matter where you go in Thailand's tourist spots, you will always encounter at least 3-4 Chinese tourists. This phenomenon of 'Chinese tour groups' is not only happening in Thailand but also in every country that is a Tourism Destination

worldwide. This demonstrates that the Chinese population is starting to have greater purchasing power and is expanding their travel globally. Each year, millions of Chinese travel abroad, making real estate investment in foreign countries, especially in Tourism Destinations, a prime target for Chinese real estate investors.

In Thailand, the purchase of real estate, particularly condominiums, for vacation purposes or for investment to rent to fellow Chinese tourists, is very popular among Chinese investors, especially in Thailand's leading tourist cities such as Bangkok, Phuket, Pattaya, and Chiang Mai.

Investing in real estate in Southeast Asia yields good returns (ROI)

            Naturally, with Chinese tourists everywhere, investing for rental purposes, especially to fellow Chinese, is bound to yield good returns. Chinese real estate investors primarily consider purchasing condominiums in popular tourist locations frequented by Chinese tourists. After that, they will look at the returns and other factors. Southeast Asia is the region that best meets the investment needs of Chinese investors.

            The countries offering the highest returns on real estate investments are Indonesia (8.6%), the Philippines (7.5%), Cambodia (5.3%), Thailand (5.1%), and Malaysia (4.6%), which yield more than investments in Japan, the UK, France, Hong Kong, or even in China itself.

Increasing demand from the aging population in China

            According to projections from Brookings Institute, China, by 2020, the elderly population in China will reach 240 million. For the elderly market, the search for retirement homes in Southeast Asia is growing steadily. When comparing the cost of living in cities, cities like Bangkok and Kuala Lumpur rank 172 and 194 in the world, while major cities in China like Beijing and Shanghai rank 18 and 20, respectively. Just think about where the elderly population in China would prefer to live.

 

'Thailand' is the number one country where 'China' invests in real estate in Southeast Asia

            Although Thailand may not offer the highest returns in Southeast Asia from the perspective of Chinese investors, it is the country where Chinese people prefer to invest in real estate the most due to its well-developed infrastructure, natural beauty, and greater economic stability compared to other countries. The cities that Chinese investors favor for real estate investment are primarily popular tourist destinations such as Pattaya, Phuket, Chiang Mai, Bangkok, and Koh Samui, respectively.

The main motivation for Chinese investors to invest in real estate in Thailand is the ability to own condominium units. Additionally, the demand for rentals in Thailand is high, yielding returns (cap gain) of up to 8-10% and rental yields of 5-7%. Furthermore, Thailand offers a diverse lifestyle and various tourist attractions. In 2017, the number of Chinese tourists visiting Thailand during long holidays increased by 30% compared to 2016. - เทอร์ร่า บีเคเค

Article by: TerraBKK Investment Tips

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