Thai condo market should benefit from 'free visa' policy
The condo market is set to benefit from the "free visa" policy, which is part of the economic stimulus measures being introduced by Srettha Thavisin's government.
Surachet Kongcheep, managing director of real estate market research firm Property DNA Co Ltd, believes that this policy will be beneficial for the Thai tourism industry, especially in attracting Chinese tourists back to Thailand in larger numbers. There has been a notable increase in Chinese tourists visiting Thailand from January to July, totaling approximately 1.853 million and the number is expected to exceed 5 million by the end of the year.
While the real estate market may not be performing well in their own country, some Chinese investors are still interested in investing in Thai properties. However, convenience plays a crucial role for them, and Thailand needs to make it easier for Chinese investors to do business here. Their domestic issues are something they will need to address themselves, he said.
Foreigners continue to be a significant group of condo buyers in the Thai market. Each year, foreigners account for approximately 10-15% of condo unit transfers in Thailand, which is a substantial portion. This is one of the key factors driving developers to focus on increasing foreign ownership in the market, as Thai buyers alone might not be sufficient to sustain the condo market in the long run.
According to data from the Thai Bank for Agriculture and Agricultural Cooperatives' Real Estate Information Centre for the first half of this year, Chinese buyers still dominate the foreign condo buyer market in Thailand. They accounted for the highest number of condo unit transfers, totaling 3,448 units, with a combined value of 16.99 billion baht, representing approximately 47% of all foreign condo transfers in Thailand during the first half of this year.
The fact that Chinese individuals have been transferring condo ownership rights in Thailand during the first half of this year is not new nor surprising, as this has been happening continuously for several years and looks set to stay that way given the current situation at home.
When the Chinese government started regulating the real estate market, it became challenging to invest in condos in China. Additionally, since the Covid 19 pandemic began in 2020, many property developers in China faced financial difficulties, which affected buyers, some of whom paid but didn't receive their properties due to construction delays, while some developers halted construction projects.
A portion of Chinese investors still wants to invest in real estate and choose to do so abroad, with Thailand being one of their preferred destinations. There's also a group of Chinese individuals who come to work or do business in Thailand. Some buy property in Thailand as accommodation for their children who come to study at various educational levels.
As a result, the transfer of condo ownership rights by Chinese individuals in Thailand has been consistently high for many years. Even though the Chinese government has set limits on how much money Chinese citizens can transfer abroad, some find ways to use that money to purchase condos in Thailand.
The Chinese government had traditionally been strict in regulating various businesses, both large and small, particularly in areas related to grey or black markets. This led to the migration of Chinese individuals connected to these businesses to Southeast Asia, especially countries bordering Thailand.
They used Thailand as a base for travel and relaxation due to its convenience for travel. When the Chinese government intensified inspections and expanded them to overseas territories, cooperation between the Chinese and Thai governments became crucial for Chinese tourists who needed visas to enter Thailand, whether individually or in small groups, rather than group tours.
Various associations in the travel and tourism industry tried to appeal for the cancellation of this requirement because it led to a significant decrease in Chinese tourists. However, some argue that it's necessary to track information about Chinese people entering Thailand and for the PRC to monitor Chinese citizens who may be involved in illicit businesses in other countries. Nevertheless, many Chinese individuals with sufficient means to purchase condos have used passports from other countries to travel to Thailand, which they obtained through legitimate investments in those countries. This has been the case for many Chinese individuals, particularly those holding European passports.
The news that the new government may cancel the visa requirement for Chinese tourists or individuals who want to enter Thailand could have a positive impact on the Thai tourism industry and the condo market is expected to benefit from it.
