Number of foreign condo buyers in Thailand slumps 34% annually
The number of foreigners buying condos in Thailand fell by over a third in 2020 against the previous year, a new report based on official Thai government data released by real estate group Juwai-IQI showed.
The nationalities with the biggest declines were Japanese with 58.6% fewer transactions in 2020 and Russians with a 51.4%-drop. Transactions of Chinese, the largest buyer group by volume, declined 31.1%.
The overall drop in the number of the top five buyers (see table below) of 34 per cent in the period was naturally triggered by the outbreak of the Covid-19 pandemic and the related lockdowns and travel restrictions, but also exacerbated by a consistently strong baht and unchanged government regulations that only allow 49 per cent of total living space of a condo building being sold to foreigners.
As it stands, the property industry and real estate experts are awaiting a rebound, which, however, is held back by a slow vaccination campaign in the country.
“It is too soon to know if this rebound will sustain itself in the remainder of 2021,” Juwai IQI co-founder and executive chairman Georg Chmiel said in the group’s report entitled Thailand Foreign Buyers 2021 Q1.
“The boom starts when travel reopens. Thailand’s real estate market has been hard hit by the pandemic, but Asian buyer demand remains,” he added.
Opening borders is an essential factor
According to Vichai Viratkapan, executive director of the Thai government’s Real Estate Information Center, a full rebound in foreign buying of Thai residential condominiums would depends on two factors.
“Since most foreign buyers are Chinese, the first factor is when the Chinese government allows their people to travel overseas. Until Chinese people come in big numbers, transactions will remain low,” he said.
The second factor would the pace of the vaccination campaign, he added, further suggesting that the Thai government raises the foreign buyer ownership threshold beyond its current 49 per cent to stimulate condo buying.
Price drop also an opportunity
Juwai-IQI’s Chmiel also expects that prices for condos in Thailand will fall further.
“According to our industry survey, the Thai real estate industry expects average new home prices to decline by 3.9 per cent in 2021. The forecast for used homes is worse, with average prices to decline 6.7 per cent in the same period,” he said.
On the other hand, this might attract bargain hunters, he added.
“For Chinese buyers, Thailand right now represents an opportunity. Not everyone is brave enough to purchase in such uncertain times, but there are many forward-looking Chinese property buyers who are. They are buying investments, second homes and even future primary residences in Thailand,” Chmiel noted.
The number of foreigners buying condos in Thailand fell by over a third in 2020 against the previous year, a new report based on official Thai government data released by real estate group Juwai-IQI showed. The nationalities with the biggest declines were Japanese with 58.6% fewer transactions in 2020 and Russians with a 51.4%-drop. Transactions of Chinese, the largest buyer group by volume, declined 31.1%. The overall drop in the number of the top five buyers (see table below) of 34 per cent in the period was naturally triggered by the outbreak of the Covid-19 pandemic and the related lockdowns...
The number of foreigners buying condos in Thailand fell by over a third in 2020 against the previous year, a new report based on official Thai government data released by real estate group Juwai-IQI showed.
The nationalities with the biggest declines were Japanese with 58.6% fewer transactions in 2020 and Russians with a 51.4%-drop. Transactions of Chinese, the largest buyer group by volume, declined 31.1%.
The overall drop in the number of the top five buyers (see table below) of 34 per cent in the period was naturally triggered by the outbreak of the Covid-19 pandemic and the related lockdowns and travel restrictions, but also exacerbated by a consistently strong baht and unchanged government regulations that only allow 49 per cent of total living space of a condo building being sold to foreigners.
As it stands, the property industry and real estate experts are awaiting a rebound, which, however, is held back by a slow vaccination campaign in the country.
“It is too soon to know if this rebound will sustain itself in the remainder of 2021,” Juwai IQI co-founder and executive chairman Georg Chmiel said in the group’s report entitled Thailand Foreign Buyers 2021 Q1.
“The boom starts when travel reopens. Thailand’s real estate market has been hard hit by the pandemic, but Asian buyer demand remains,” he added.
Opening borders is an essential factor
According to Vichai Viratkapan, executive director of the Thai government’s Real Estate Information Center, a full rebound in foreign buying of Thai residential condominiums would depends on two factors.
“Since most foreign buyers are Chinese, the first factor is when the Chinese government allows their people to travel overseas. Until Chinese people come in big numbers, transactions will remain low,” he said.
The second factor would the pace of the vaccination campaign, he added, further suggesting that the Thai government raises the foreign buyer ownership threshold beyond its current 49 per cent to stimulate condo buying.
Price drop also an opportunity
Juwai-IQI’s Chmiel also expects that prices for condos in Thailand will fall further.
“According to our industry survey, the Thai real estate industry expects average new home prices to decline by 3.9 per cent in 2021. The forecast for used homes is worse, with average prices to decline 6.7 per cent in the same period,” he said.
On the other hand, this might attract bargain hunters, he added.
“For Chinese buyers, Thailand right now represents an opportunity. Not everyone is brave enough to purchase in such uncertain times, but there are many forward-looking Chinese property buyers who are. They are buying investments, second homes and even future primary residences in Thailand,” Chmiel noted.
