Mr. Simon Lee, Chairman of Angel Real Estate Consultancy Co., Ltd. (ARE), a marketing and sales consultancy firm in Thailand, particularly for the foreign quota, stated that the foreign quota real estate market is expected to recover well in 2023 after a significant decline of over 80% in foreign customers during the COVID-19 pandemic.

Following China's announcement to reopen its borders, this has become a crucial factor in stimulating the Thai real estate market. However, it is anticipated that the reopening will not lead to a boom in the condo market like it did from 2017 to 2019, as wealthy Chinese buyers have previously opted for expensive properties in Singapore, Japan, and Europe. Most customers purchasing condos in Thailand for a second home are from the middle class, which has been significantly affected during the pandemic.

Meanwhile, it is expected that only 5% of buyers will be investors after the reopening, which is a very small proportion compared to over 60% before the pandemic. The main reason for the Chinese investors' withdrawal is the lower-than-expected returns of 2-3% against a target of 6%, and capital gains profits have also decreased below the estimated 7%.

During the lockdown, Chinese investors abandoned over 25% of their condo down payments in Thailand.

Reflecting on the period when China was closed, it is acknowledged that there was a turning point for the foreign quota group. According to the company's data, over 25% of Chinese investors abandoned their down payments on condos priced over 5 million baht, which accounts for approximately 750 units out of a total of 3,000 units sold. This was partly due to financial conditions and the inconvenience of traveling to transfer ownership. However, condos priced at 2-3 million baht are still being gradually transferred, and some customers have requested to postpone their transfers. Currently, it is observed that about 15% of Chinese buyers are gradually transferring ownership of condos in Thailand.

Chinese gray capital is believed not to affect the image of buying real estate in Thailand.

Regarding the issue of gray capital from China, agents in the foreign quota believe that this does not significantly impact Chinese buyers, as most Chinese prefer not to engage in gray businesses. The majority of customers purchasing real estate in Thailand are from the middle class, who still have a demand for second homes abroad, with Thailand remaining a popular destination. The preferred locations are familiar areas such as Sukhumvit, Sathorn, Silom, Ratchadapisek, Rama 9, Ramkhamhaeng, and Srinakarin (close to the city), with prices ranging from 5-7.5 million baht or approximately 1-1.5 million yuan. In tourist cities like Chiang Mai, Chonburi, and Phuket, properties priced over 10 million baht are selling well. However, areas along the Red and Pink Skytrain lines or in Nonthaburi are still slow to sell as Chinese buyers are not familiar with these locations and do not understand the transportation routes well enough.

Image from freepik

Chinese buyers prefer ready-to-move-in condos with 2 bedrooms.

The purchasing behavior of Chinese buyers has changed significantly. Currently, they are interested in buying ready-to-move-in condos (RTM). Those buying for personal residence pay attention to room size and location. For example, if a project is located further away, they may get a larger room, consider feng shui, or the direction that is auspicious and does not negatively impact their lives, as well as complete amenities and continuous project quality improvement. Customers are increasingly looking for 2-bedroom units with 2 bathrooms or sizes exceeding 50 square meters up to 70 square meters. The layout of the units must maximize utility, and they prefer not to have duplex units with high ceilings (Loft) as it can be difficult for the elderly to navigate. However, 1-bedroom units remain popular among young Chinese buyers.

Image from freepik

Proposing “Government to Increase Flights – Developers to Reduce Overpriced Properties” to Boost Tourism and Real Estate in 2023.

Nevertheless, it is believed that after China reopens, it may take 1-2 years for the economy to recover. Currently, direct flights from China to Thailand are only at 20-30%, which is still low and insufficient compared to pre-COVID levels. Therefore, it is suggested that the government increase direct flights from China to Thailand, as this will be crucial in bringing Chinese tourists to spend and stimulate the real estate business simultaneously.

The Thai real estate sector believes it needs to adapt quickly, especially regarding pricing. Developers are urged to adjust the prices of condos in the foreign quota to not exceed 7% over the prices for Thai buyers to enhance the attractiveness of Thai condos. In the past, developers have offered prices that were overpriced by 20-30%. If prices remain high, it is believed that this will increasingly affect the purchasing decisions of Chinese buyers, as customers can easily search for information online.

“Angel Real Estate” announces its Come Back, acquiring 20 ready-to-move-in condo projects, aiming for 7 billion baht in sales.

Overall, the agency business is believed to require time to adjust back to normal conditions, with little competition as currently, there are only 3-4 medium to large agents in the market, with a total market value of around 13,000 – 15,000 million baht per year.

In 2023, “Angel Real Estate” plans to re-enter the agency business, preparing to purchase 20 condo projects in both Bangkok and Chiang Mai, with a total value of over 7 billion baht to expand its portfolio this year. The sales target for this year is approximately 7 billion baht, with around 5 billion baht expected to be transferred, growing more than 10%, depending on whether the focus will be on selling ready-to-move-in units or pre-sales.

The key strategy this year is to understand customers by selecting quality products from trusted leading real estate developers such as Sansiri, Supalai, Sena, Siamese, Land and Houses, Ananda, and Orsirin, to deliver products with suitable common areas to meet the needs of real demand customers.

“The strength that customers still trust in the Angel brand is because we take responsibility, which has been our approach and policy all along, not something we just started today. Over the past 5-10 years, we have cared for and maintained contact with customers at all times. When customers have problems, our team steps in to resolve them. We have a Customer Relationship Management (CRM) system and a commitment to corporate social responsibility (CSR) that continues. We can reference our old customers. Angel has not gone anywhere,”Mr. Simon Lee concluded.