The report on the situation of foreign ownership transfers of condominiums in Q2 2022 predicts that allowing foreigners to purchase homes and land could significantly increase the transfer value by up to 100 billion baht.

The Real Estate Information Center (REIC) of the Government Housing Bank reported on the overall situation of condominium ownership transfers to foreigners nationwide in Q2 2022. It was found that the number of condominium ownership transfers to foreigners nationwide was 2,326 units, an increase of 15.1% compared to the same period last year (YoY) and higher than the quarterly average during the two years of the COVID-19 pandemic (2020-2021). The transfers of new condominiums to foreigners were at a ratio of 62.9% for new units to 37.1% for second-hand units, with the latter continuously increasing for six consecutive quarters, reaching the highest proportion in 18 quarters. Meanwhile, approximately 81.9% of the transferred units had a value not exceeding 5 million baht, and about 83.5% of the transferred condominiums were sized at no more than 60 square meters. The highest transfers occurred in the top five areas: Bangkok, Chonburi, Samut Prakan, Phuket, and Chiang Mai.

Dr. Vichai Viratakphan, Inspector of the Government Housing Bank and Acting Director of the Real Estate Information Center, revealed the report on the situation of condominium ownership transfers to foreigners in Q2 2022, stating that the transfers have increased in terms of the number of units, value, and area compared to the same period last year (YoY) and are higher than the quarterly average during the two years of the COVID-19 pandemic. The total number of condominium ownership transfers to foreigners nationwide was 2,326 units, an increase of 15.1% from the same period last year (YoY), and this number is higher than the average quarterly figure during the COVID-19 period of 2,092 units/quarter (see charts 1-2). The total value of ownership transfers to foreigners nationwide was 12,114 million baht, an increase of 26.9% from the same period last year (YoY). This quarter's transfer value exceeded the average of 9,980 million baht/quarter during the COVID-19 period (see charts 3-4), and the area of condominium ownership transfers to foreigners nationwide was 109,486 square meters, an increase of 27.6% from the same period last year (YoY). The area transferred this quarter was higher than the average of 90,325 square meters/quarter during the COVID-19 period (see charts 5-6).

The ownership transfers of condominiums to foreigners have expanded compared to the same period last year in terms of the number of units, value, and area, marking the highest increase in the number of units in the past five quarters, and the highest value and area in the past six quarters. This reflects that the purchase of condominiums by foreigners has been continuously transferred, with new buying interest from foreigners other than Chinese buyers replacing the demand lost due to travel restrictions.

The current proportion of condominium ownership transfers to foreigners is less than 10%, with over 30% being second-hand units.

The proportion of units transferred to foreigners in Q2 2022 was 9.3% of all condominium ownership transfers, which is a slight increase from the same period last year (9.2%). The transfer value to foreigners accounted for 18.7%, and the area of condominiums transferred to foreigners accounted for 12.7%, up from 15.1% and 11.1% from the same period last year, respectively (see charts 7-9). This indicates that foreign buyers are purchasing condominiums at a higher average price per unit compared to the previous year.

REIC also found that the ownership transfers of second-hand condominiums to foreigners in Q2 2022 accounted for 37.1% of the total units, continuing to increase for six consecutive quarters, reaching the highest proportion in 18 quarters. In terms of value, second-hand condominiums accounted for 27.2%, and in terms of area, they accounted for 43.3%, with the area of second-hand condominiums continuously increasing for seven quarters, also reaching the highest proportion in 18 quarters (see charts 10-12).

“The increasing proportion of ownership transfers of second-hand condominiums to foreigners in terms of number of units, value, and area suggests that foreigners may prefer second-hand condominiums located in central areas or near business districts, where the supply is decreasing. Additionally, the prices of second-hand condominiums in these locations are lower than those of new projects, making them an attractive option for foreigners, especially buyers from Europe, the United States, Australia, Russia, and India.”

Chinese buyers remain the largest group of foreigners transferring condominium ownership in Q2 2022.

In Q2 2022, Chinese nationals accounted for the highest number of condominium ownership transfers nationwide with 2,072 units, or 25.3%. The next four nationalities with the highest number of transfers were Russia with 263 units (3.2%), the United States with 228 units (2.8%), the United Kingdom with 167 units (2.0%), and Germany with 160 units (2.0%). In terms of total transfer value, the top five nationalities were also led by Chinese nationals with 10,493 million baht (26.4%), followed by the United States with 976 million baht (2.5%), France with 933 million baht (2.3%), Russia with 850 million baht (2.1%), and Cambodia with 783 million baht (2.0%) (see chart 18).

Foreigners prefer to buy condominiums priced below 5 million baht and sized under 60 square meters.

The average price of condominiums transferred to foreigners in Q2 2022 was 5.0 million baht/unit (see table 1). Transfers in the price range of up to 3.00 million baht accounted for 46.4%, followed by the price range of 3.01 - 5.00 million baht at 25.5%, and 5.01 - 7.50 million baht at 12.9%. The price range above 10.00 million baht accounted for 8.7%, and the range of 7.51 - 10.00 million baht accounted for 6.5% (see chart 13). However, when considering the value of ownership transfers to foreigners, those priced above 10.00 million baht accounted for 38.9%, followed by the price range of 3.01 - 5.00 million baht at 19.3%, up to 3.00 million baht at 15.7%, 5.01 - 7.50 million baht at 15.1%, and 7.51 - 10.00 million baht at 11.0% (see chart 14). It was found that the nationality with the highest average price/unit for ownership transfers in the first six months of 2022 was Taiwanese, with an average value of 7.1 million baht/unit, while Russians and Germans had the lowest average price/unit at 3.2 million baht.

The average size of condominiums transferred to foreigners in Q2 2022 was 46.6 square meters/unit (see table 1). Transfers in the size range of 31 - 60 square meters accounted for 51.0%, followed by units sized up to 30 square meters at 32.5%, units sized 61-100 square meters at 10.1%, and units larger than 100 square meters at 6.5%. Looking back to 2018, it was found that units sized up to 30 square meters and 31 - 60 square meters were the most popular among foreigners, with a combined proportion of over 80% of total transfers each quarter (see chart 15).

 

In terms of value, the size of condominiums with the highest proportion was in the range of 31 - 60 square meters at 42.3%, followed by units larger than 100 square meters at 28.7%, units sized up to 30 square meters at 14.5%, and units sized 61-100 square meters at 14.5%. Looking back to 2018, it was found that units sized 31 - 60 square meters and those larger than 100 square meters generated the highest purchase value from foreigners, with a proportion of 71.0% each quarter (see chart 16).

It was also found that the nationality with the highest average size/unit for ownership transfers in the first six months of 2022 was Indian, with an average size of 73.2 square meters/unit, while Russians had the lowest average size/unit at 37.0 square meters/unit.

Additionally, the average price per square meter was 108,133 baht/square meter. The nationality that purchased condominiums at the highest average price per square meter was Taiwanese, with an average price of 155,085 baht/square meter, followed by Chinese buyers at 129,353 baht/square meter.

Condominiums in Bangkok and major provinces as well as tourist provinces remain the most sought-after by foreigners.

REIC found that the top five provinces with the highest number of condominium ownership transfers to foreigners in the first six months were Bangkok, Chonburi, Samut Prakan, Phuket, and Chiang Mai. Most of these were in the first two provinces: Bangkok accounted for 43.8% and Chonburi accounted for 31.0%, respectively. Together, these two provinces accounted for 80.7% of the total nationwide. Looking back to 2018, it was found that Bangkok and Chonburi continued to have the highest number of condominium ownership transfers to foreigners. The next provinces were some in the metropolitan area and key tourist destinations, such as Samut Prakan and Phuket (see chart 19). These five provinces also had the highest accumulated transfer values for condominiums to foreigners, with Bangkok accounting for 64.4% and Chonburi for 16.0%, together making up 80.4% of the total nationwide. The next provinces were Samut Prakan and Phuket as well (see chart 20).

From the overall picture of condominium ownership transfers to foreigners, it can be seen that the volume in terms of the number of units, value, and area has started to recover, but remains below the levels before the COVID-19 pandemic. However, it is noteworthy that these transfer figures reflect transactions that have occurred over the past 1-2 years, indicating that condominium sales have been able to continue transferring ownership, with more than 30% of the transferred condominiums being second-hand units, which have been continuously expanding.

The reopening of the country and the resumption of various international activities are returning to normal, and the tourism industry in Thailand is beginning to recover, which is a significant positive factor that may help stabilize or slightly increase the number of units, value, and area in the purchase and transfer of condominium ownership to foreigners. This is partly due to China's continued Zero-Covid policy, which still imposes restrictions on Chinese nationals wishing to travel and invest in real estate in Thailand. Although there has been an increase in other foreign groups purchasing condominiums in Thailand recently, they will likely only partially replace the Chinese buyers, as the volume of buyers from other nationalities remains very low compared to that of Chinese buyers.

Dr. Vichai further stated, “The Cabinet's approval in principle for allowing foreigners to purchase homes with land or land for residential development is a measure to stimulate the economy and investment that will attract foreign buyers.”