News Forum - 80% of condos in Thailand sold to foreigners, 50% China

[Thaiger]

A real estate firm is predicting that the market for condos in Thailand hot spots like Bangkok, Phuket, and Pattaya will be rebounding soon with the continued trend of foreign investment, a majority of which are Chinese. China has long been a driving force in purchasing condos in Thailand. The business development manager of Saensiri is predicting the uptick once Covid-19 outbreaks are wrangled and brought under more control and general vaccinations across the Thai population increases. The manager said that foreigners make up the vast majority of those purchasing condos throughout Thailand, with 80% of the 325 billion baht […]

The post 80% of condos in Thailand sold to foreigners, 50% China appeared first on Thaiger News.

Read the full story

[Jannot]

I was under the impression that any Housing complex could only have 49% foreign ownership, rest must be Thai. Perhaps Chinese are not considered foreign.

[DoUKnowWhoIAm]

"The real estate firm believes that once Covid-19 is not an issue dominating travel and entry into Thailand, the market will recover swiftly."

 

A very unanticipated commentary by a real estate firm. 

[Bob20]

19 minutes ago, Jannot said:

I was under the impression that any Housing complex could only have 49% foreign ownership, rest must be Thai. Perhaps Chinese are not considered foreign.

80% of the sales value, not the number of condos. Foreigners apparently paying far higher prices...

[9S_]

And when traveling restarts the Chinese will turn around and use their condos as Airbnb listings. 

[TheDirtyDurian]

So if 80% of the market is reliant on Chinese, that's a pretty narrow market. 

Prospective purchases based on prospective renters, but there won't be large numbers of people coming to Thailand for some time IMO.

 

[Stonker]

30 minutes ago, Jannot said:

I was under the impression that any Housing complex could only have 49% foreign ownership, rest must be Thai. Perhaps Chinese are not considered foreign.

The other 51% can be leased or owned by nominee companies.

[HolyCowCm]

Sad really. No one wants to see too much of any one nationality outnumbering all the rest.

[Fluke]

46 minutes ago, Jannot said:

I was under the impression that any Housing complex could only have 49% foreign ownership, rest must be Thai. Perhaps Chinese are not considered foreign.

Those were the figures for all Condos combined , rather than individual complexes .

[oldcpu]

17 minutes ago, Stonker said:

The other 51% can be leased or owned by nominee companies.

IMHO its a risky business for a foreigner to be part of the 51% allocated to Thais.

Typically after 30-years, a leasehold will return to the original Thai owner. I guess if the condo value has depreciated in value in those 30-years (which is entirely possible for condos - if underlying land value does not go up) then a further lease is possible. However I see that is a risk.   While there are (or there were) advertisements for 30+30+30 year leases, court cases have typically proven after 30-years, regardless of any signed lease, if the Thai owner wants the property back, they get the property back, and the remaining 60-years worthless.

Thai nominee companies need to be 51% Thai owned.   I have read there is a practice that foreigners setup Thai companies (where the foreigners own 49%) and ensure that the 51% Thai owned, is in fact still controlled by the foreigner, and then the foreigner uses the Thai company to buy the Thai land & property, and let the foreigner live in the property (or in the case of a condo, buy the Thai freehold property).  The Thai politicians know of this 'work around' technique and every now and then, a Thai politicians claims they will shut down and stop this practice once and for all.  ... To the best of my knowledge that has NOT happened - but there is always a risk.

My recommendation for any foreigner looking at buying that they stick to buying one of the designated 49% Foreign freehold - unless of course (for a leasehold) one wishes to give the condo back to the Thai owner in 30-years, or take the risk of politicians in the future putting a stop to foreigners setting up a Thai company to buy a Thai foreign freehold (for the foreigner to indirectly own).

Edited September 3, 2021 by oldcpu

[Stonker]

2 hours ago, oldcpu said:

The Thai politicians know of this 'work around' technique and every now and then, a Thai politicians claims they will shut down and stop this practice once and for all.  ... To the best of my knowledge that has NOT happened - but there is always a risk.

I think everyone knows of the work around technique!

Like all things that are illegal, it's a risk - and probably now a much higher risk than it was 25 years ago.

[Bob20]

2 hours ago, HolyCowCm said:

Sad really. No one wants to see too much of any one nationality outnumbering all the rest.

 

2 hours ago, TheDirtyDurian said:

So if 80% of the market is reliant on Chinese, that's a pretty narrow market. 

Prospective purchases based on prospective renters, but there won't be large numbers of people coming to Thailand for some time IMO.

How I read it: 80% of the condo property -value- is owned by foreigners. And 50% of that owned by Chinese. Again value.

If 80% of the value represents 49%  proportion of condos you can work out how much more foreigners pay...

[oldcpu]

15 minutes ago, Bob20 said:

How I read it: 80% of the condo property -value- is owned by foreigners. And 50% of that owned by Chinese. Again value.

If 80% of the value represents 49%  proportion of condos you can work out how much more foreigners pay...

I suspect that 80% includes Thai freehold owned by foreigners through Thai companies that the foreigners control. If so that changes the math.

[HolyCowCm]

28 minutes ago, Bob20 said:

How I read it: 80% of the condo property -value- is owned by foreigners. And 50% of that owned by Chinese. Again value.

If 80% of the value represents 49%  proportion of condos you can work out how much more foreigners pay...

And the proxies for the whom?

[Bob20]

2 minutes ago, oldcpu said:

I suspect that 80% includes Thai freehold owned by foreigners through Thai companies that the foreigners control. If so that changes the math.

Hi oldcpu, I'm more into medical. Can you explain please? I've bought a condo and will own the freehold, as with a condo that's the only way I can.

The actual land is owned by the developer and/or later the management company. But that value has obviously been included in sales price calculations.

They can sell 49% to foreigners and 51% to Thai. Foreigners with Thai companies might legally be able to buy on the Thai 51% side, but I doubt they would. They usually buy land and house, not condo. 

Also, with the new regulations (I think since May 2019)  you can't do short term rent or lease anymore. Int new one it's even in the sales contract.

I thought the 49/51 was pretty much a solid division.

[DiggR]

Couldn't be any correlation between the government love affair with Sinovac and Chinese investments, l am sure it is just a coincidence.

[KaptainRob]

3 hours ago, HolyCowCm said:

Sad really. No one wants to see too much of any one nationality outnumbering all the rest.

Fact of life though. Chiang Mai is a magnet for Cn investment due to BRI rules and our proximity to the homeland.

Virtually every new development in our mooban is Cn sponsored or the target market.  Getting money out of China is sweetened by Airbnb income and the rates they ask are crazy.

[Stardust]

It seams they not follow the news and about the big crackdown on invest and techfirms in China. They cannot anymore legal invest in foreign countries or bring their money out of China. The party is over! I am really surprised what they are anouncing! China party is over!

[EdwardV]

35 minutes ago, Stardust said:

It seams they not follow the news and about the big crackdown on invest and techfirms in China. They cannot anymore legal invest in foreign countries or bring their money out of China. The party is over! I am really surprised what they are anouncing! China party is over!

The crackdown only going to get worse too. The CCP has been trying to plug the various holes that allow Chinese nationals to get money out of the country for several years now. They loose about $1T USD worth every year. Foreign real estate being the favorite parking spot for all that cash. The CCP is determined to cut off that flow, by any and all means. Besides buying a condo to retire and live in, I can't imagine the purchase of Thai real estate being a quality investment.  

[Stardust]

3 minutes ago, EdwardV said:

The crackdown only going to get worse too. The CCP has been trying to plug the various holes that allow Chinese nationals to get money out of the country for several years now. They loose about $1T USD worth every year. Foreign real estate being the favorite parking spot for all that cash. The CCP is determined to cut off that flow, by any and all means. Besides buying a condo to retire and live in, I can't imagine the purchase of Thai real estate being a quality investment.  

And they even don't kniw that they will shut all loop holes, that is what XI anounced. So thats why I was really wondering what nonsense they anounce there about future chinese real estate investors. The party is already over and crackdowns already happened.

[Poolie]

The Chinese will keep buying, despite all the grim warnings otherwise.

How do you think, for instance, in better times, they pay for their kids to study abroad?

[HiuMak]

13 hours ago, Bob20 said:

How I read it: 80% of the condo property -value- is owned by foreigners. And 50% of that owned by Chinese. Again value.

If 80% of the value represents 49%  proportion of condos you can work out how much more foreigners pay...

Could be that foreigners are buying up all the penthouses and big units which drives up the value?

Chinese sure makes up a big portion of property investment in Thailand.

 

[JamesE]

21 minutes ago, HiuMak said:

Could be that foreigners are buying up all the penthouses and big units which drives up the value?

Chinese sure makes up a big portion of property investment in Thailand.

It's got to be something like this as foreign ownership within a condo development is restricted by percentage.

[KaptainRob]

9 hours ago, Stardust said:

And they even don't kniw that they will shut all loop holes, that is what XI anounced. So thats why I was really wondering what nonsense they anounce there about future chinese real estate investors. The party is already over and crackdowns already happened.

There's plenty of loopholes remaining.  One Beijing citizen I've met, I call him Jimmy, bought 5 properties here @ 75m THB in one week.  The one next door is an old house on 3 rai (4800 m2) , another 3 door away similar, the balance were all small new homes.  My understanding is he is (or will after travel resumes), market 4 of them to Cn investors at a BIG mark-up profit to himself.

Jimmy is one of many hi-so Chinese who can get money out and I know of others who've been approved to purchase a 'holiday home' (read airbnb) here as is supposedly permitted in BIR member countries.  Funds are certainly flowing as some massive contracts continue under construction at this time while those already completed sit empty. 

[Stardust]

26 minutes ago, KaptainRob said:

There's plenty of loopholes remaining.  One Beijing citizen I've met, I call him Jimmy, bought 5 properties here @ 75m THB in one week.  The one next door is an old house on 3 rai (4800 m2) , another 3 door away similar, the balance were all small new homes.  My understanding is he is (or will after travel resumes), market 4 of them to Cn investors at a BIG mark-up profit to himself.

Jimmy is one of many hi-so Chinese who can get money out and I know of others who've been approved to purchase a 'holiday home' (read airbnb) here as is supposedly permitted in BIR member countries.  Funds are certainly flowing as some massive contracts continue under construction at this time while those already completed sit empty. 

They did yes before but the are making crackdowns at the moment in China on that. Firms who want to open companies and want to invest abroad had raids and had to close and it is illegal to bring their money outside China. I think the companies and investors were surprised too that it would that strict and hard. Big tech firms lost billions of usd over night or completly shut down. I was surprised too that XI do this on a real radical way. They not hesitate to lock hisos like Jimmy they do that on the biggest hisos already. The big ones just dissapear , thats it.