Beautiful sea view, affordable prices. With the tourism boom in Thailand, Thailand’s popular resorts such as Bangkok and Pattaya have surpassed Japan, Australia and the United States to become the most popular overseas homebuying cities for Chinese buyers. So, has the Thai property market become a new outlet for pension and investment?
Real estate in Thailand is not like the decades-old property rights in the mainland, but freehold property rights, and there is no inheritance tax, which can be passed on from generation to generation. Since 2008, apartment prices in Thailand have been rising. In the first quarter of 2016, apartment prices have increased by about 60% compared to the first quarter of 2008, with an annual growth rate of over 6%.
According to the 2017 Global House Price Index report, Bangkok's real estate growth rate last year was the highest in Thailand and ranked first in Southeast Asia. Due to the large number of tourists, large cities in Thailand are close to subway stations and the surrounding convenient apartments are generally easier to rent, and the net return on residential rental is about 4%-8%.
There are two main reasons for the increase in apartment prices. On the one hand, after the Thai real estate bubble burst in the 1990s, the government strictly controlled the total amount of newly built residential buildings and the market supply was greatly reduced. On the other hand, with the steady development of Thailand's economy and international influence, more and more local and overseas investors in Thailand have set their sights on here.
According to statistics from Juwai.com, in Thailand, the proportion of houses purchased to achieve investment goals is 21% higher than other countries, and the proportion of houses used as "second homes" or "vacation houses" is 148% higher. "For the purpose, the proportion is 189% higher.
In the past, overseas buyers who bought condominiums in Thailand were mainly from Hong Kong or Singapore. However, since 2016, a large number of mainland Chinese customers have poured into Thailand. Some of the Chinese buyers currently buying houses in Bangkok are expatriates from high-tech companies such as Alibaba and JD.com, while others are local Chinese who do business in export. At present, more than 90% of Chinese people buying houses in Thailand buy open-plan or one-bedroom apartments with a total price of 600,000-1.2 million yuan.
The cities where Chinese buy houses are mainly concentrated in Bangkok, Pattaya, Phuket and Chiang Mai. Because these four cities are Thailand's relatively high level of internationalization, with good infrastructure facilities, their housing prices are approximately equivalent to China's second and third-tier cities.
Among them, the capital Bangkok's GDP accounts for 49% of Thailand's total. It is a city that integrates economy, finance, commerce, and tourism. Now Bangkok ranks among the world's top tourist cities, one of the most dynamic and youngest cities, and has the densest population in Thailand. According to the National Bureau of Statistics of Thailand, the current population of Thailand is approximately 69 million, and Bangkok has a population of over 15 million. Therefore, house prices in Bangkok are the most resistant to falling in Thailand, and house price growth is also the most stable.
Due to the dual benefits of population and economy, the average growth rate of the Bangkok property market in the second quarter of 2017 was as high as 32%, a record high. According to the statistics of the Ministry of Finance of Thailand, the price of land along the BTS in Bangkok has risen by 100%-150% in just a few years.
In addition to Bangkok, Pattaya is also a favorite of many people. Pattaya is an island resort in Southeast Asia and even the whole of Asia. The beach scenery is very beautiful. In the first half of 2017 alone, Pattaya received more than 8 million tourists, and the number of tourists in Phuket exceeded a new high for the fourth consecutive year, reaching 8.4 million in 2017.
The main reasons why Thai houses are so popular are as follows:
Loose policies and friendly residents
In Thailand, foreigners who are over 50 years old and have certain financial ability can apply for a Thai pension visa (retirement visa). The pension visa period is one year (renew indefinitely). The pension visa is allowed to be held during the validity period. Freedom to enter and exit Thailand many times, equivalent to permanent residency. Moreover, the threshold for applying for this visa is relatively low, as long as you have 800,000 baht (about 180,000 yuan) in a bank account opened in Thailand.
Because most of the residents in Thailand believe in Buddhism, they are more tolerant and open to foreigners, have less hatred of the rich, and are easier to get along with. After traveling to Thailand, some people find that the climate there is pleasant. Basically, shorts and slippers can last a year. After returning, they still choose to buy a property in Thailand, collect rent at ordinary times, and use it on vacation when needed.
Excellent education
The quality of education in Thai International Schools is very high. Most of the teachers are graduates from well-known schools, with rich teaching experience, the curriculum is in line with European and American universities, and the educational philosophy is open and international. Moreover, the cost of local education is relatively low. For the same international brand school, the annual cost in Thailand is about 150,000-200,000 yuan, while in Beijing it generally needs 200,000-300,000 yuan.
In addition to international schools, Thailand's high-quality medical environment attracts 2.8 million medical tourists every year, which shows the popularity of medical treatment in Thailand. Most Thai doctors have experience studying abroad and have relatively high professional standards. Moreover, many hospitals in Thailand are not messy and noisy, but like star hotels, with gardens, restaurants, and children's tourist areas, the experience of medical treatment is more comfortable.
Low price, check in with bag
In terms of life, the price of buying a cup of coffee in Bangkok is only US$2.41, which shows the low prices.
In terms of housing prices, the average price in Bangkok, Phuket, Hua Hin, and Krabi in Thailand is about 20,000-30,000 yuan per square meter, while that in Pattaya and Chiang Mai is about 10,000-10,000 square meters. In other words, 700,000 RMB can buy an apartment of about 30 square meters with fine decoration and bags in Bangkok. Now, houses in a better area in Sanya, Hainan are more than 30,000 yuan per square meter, and the total price of a two-bedroom suite is less than 3 million yuan, much more expensive than Thailand.
Thailand home ownership also has minefields
Thai law does not allow foreigners to buy land and freehold villas, so foreigners can only buy apartments. However, most of the off-plan apartments in the apartment are well-decorated, equipped with floor, bathroom, toilet, kitchen cabinet, air conditioner, built-in wardrobe, etc., which is also convenient. Moreover, the area of Thai apartments is the actual area, unlike domestic houses which contain about 25% of the share area, the area of Thai real estate is equivalent to a 25% discount.
But after buying a house, you need to pay certain taxes. The first is the transfer tax of 2%; the second is the special commercial tax of 3.3% if the transaction is made within five years (the owner can be exempted from holding the property for more than 5 years). In addition, there is a 0.5% stamp duty paid by the house seller.
The most important thing is that since May 1, 2017, Chinese banks have been unable to provide loans for Chinese buyers of houses, so they cannot borrow money to buy houses in Thailand and need to pay in full.
A client bought a house of about 50 square meters in Hua Hin, Thailand. There is a long sea view line and the view is very good. And the price is relatively cheap, equivalent to between 15,000 yuan and 20,000 yuan per square meter. Compared with the domestic real estate area calculation method, a 50-square-meter house in Thailand is equivalent to a domestic house of 70 square meters.
It should be noted that compared with the real estate market in China, the real estate market in Thailand is completely different in terms of scale and market environment. Thailand projects generally have about 500 units, and no more than 2,000 units at most. The degree of real estate marketization is still in its infancy. However, Thailand is rich in tourism resources, housing prices are relatively low, and the future development space is very large.
On the whole, Thailand's policy is relatively loose compared to China. Except for the core areas of big cities, real estate is more suitable for elderly care independence, because Thailand's economic development is slow, prices have not changed much in the past ten years, the cost of living is low, the sea view is good, and the price is high. It is safer to buy property for rent in the core area of Thailand's hotspot cities, but it should be noted that Thailand is a tourist city and it is not easy to rent out in the off-season.
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