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News Release

Bangkok

Chinese buyers account for half of foreign demand for condos in Bangkok


Despite China's tight controls over capital outflows that limit Chinese individuals to exporting the equivalent of USD50,000 a year, buyers from mainland China have now become the top source of foreign demand for condominiums in Bangkok. Around 50% of the foreign buyers of condos in the city are Chinese, based on condo sales concluded and enquiries received so far this years by property services firm JLL.

 

According to JLL, many Chinese buyers of condos in Bangkok are expatriates working in the city. This is well in line with the firm's recent report, 'China12: China's Cities Go Global', which indicates that Bangkok is the 10th most popular destination in the world for mainland firms expanding overseas, and ranks 3rd in terms of the volume of Chinese corporate leasing activity over the last three years.

 

Ms. Nonraphat Pornsinkunanon, Head of Residential Sales and Leasing at JLL, says "Condos that are selling well to the Chinese expatriates are studios and one-bedroom units in the Ratchadapisek and Rama 9 areas, priced between THB 1.5 million and THB 3 million. Generally, these Chinese buyers have no issue with China's capital controls. In addition, some international banks and local financial institutions in Thailand offer home loans to foreigners that meet their qualification criteria such as the validity period of a work permit held and length of the employment contract in Thailand. These qualification criteria vary from bank to bank.

 

There are also many mainland Chinese buyers who have purchased condos in Thailand's capital city as an investment or a holiday home. This trend is well supported by Bangkok's strong position as one of the Chinese's most popular tourist destinations, and JLL's report where Bangkok is listed among the world's top 10 cities most connected with China in terms of capital, corporates, people, infrastructure and trade.

 

While most buyers from mainland China have purchased condos priced at around THB 6 million in the Sukhumvit area, there is a growing number of Chinese ultra high-net-worth individuals who have purchased luxury and ultra luxury condos in Bangkok's central business and riverside areas. "Some of these buyers are collectors of trophy assets – something that they can be proud of," Ms. Nonraphat remarks.

 

"Though the Chinese capital curbs are a big barrier for mainland Chinese purchasing property overseas, there remain a few ways to get around the restrictions. For example, some Chinese buyers have used offshore financing to fund their condo purchases in Bangkok," she adds.

 

Bangkok Condominium Market Snapshot

 

According to JLL's Thailand Property Intelligence Centre, the total stock of condominiums in Bangkok stood at 524,000 units at the end of the first quarter of 2018. Of this, 46,000 units are in the prime segment.

 

The market-wide average first-hand sale price for condos in Bangkok saw a year-on-year increase of 8.3% in the first quarter of 2018. Prices in the prime segment across Bangkok grew marginally by 0.4% over the same period as many developers have moved up market over the last few years, exerting downward pressure on prices.

 

The first quarter of the year saw both the most expensive land deal ever (on a per sqm basis) and the largest (total price) deal ever. SC Asset PCL reportedly acquired a development site on Langsuan Road for THB 3.1 million per square wah while a joint venture between Thailand's Central Group and Hong Kong Land acquired the site of the current UK Embassy for THB 18.7 billion. A number of other smaller / less expensive prime sites were acquired in the quarter by leading condo developers -- Raimon Land, MQDC, and Ananda Development.

 

JLL expects developers to launch new condo development projects on most of these sites, and some of these projects may achieve headline-grabbing prices.