Chinese replace Russian demand for Thai condos

As Russian demand for property in Thailand has fallen following the devaluation of the rouble, interest from Chinese buyers has risen, say developers and agents.

Some condominium projects are suffering from global macro-economic issues, such as the Russian economic recession, especially where the majority of target buyers are Russians, says Knight Frank Thailand.

Risinee Sarikaputra, Director, Research and Consultancy Department, says, “Phuket continues to attract its fair share of extremely wealthy foreigners and property investors, but the number of foreigners willing to spend 100 million baht or more for a luxury villa has been dwindling.

“This year, Phuket has been attracting more mass-market travellers, notably Asian and Chinese nationals whose numbers help offset the drop in jetsetters.”

Villas were still selling, but the number was more modest, though still priced beyond the means of most buyers, although the resort markets in Phuket, Hua Hin and Pattaya, have different attributes and buyer profiles.

“Investment in property is Thailand’s popular resort areas continues to attract interest from local and foreign buyers. While such activity has slowed, each of these markets retains specific attributes that continue to drive sales and new project developments.”

Prior to 2008, the condominium supply in Phuket included larger units of over 100 square metres — 84% of supply were units larger than 70 square metres and only 16% of the supply were units smaller than 70% square metres.

From 2008 to 2014, 82% of the total supply included units smaller than 70 square metres, with 18% of units being larger than 70 square metres. Units smaller than 40 square metres could only be sold when they were priced below 5million baht. This shows the shift in buyers’ intention from self-occupancy to pure investment purposes, says Knight Frank.

Most location for investing in Phuket villas are on the western coast; however, the areas with more complete facilities and amenities are in Bangtao and Patong.

The Hua Hin condominium market was previously popular among affluent Thai families from Bangkok, but recently, it has expanded to capture new demand from medium-income buyers.

The main buyers of condominiums in Pattaya are mainly European and Russian nationals, purchasing units for either second vacation homes or for investment. Afforable condominiums with from 40,000-60,000 baht per square metre are situated away from the Jomtien coastline, but still close to the town.

With the value of the rouble in decline, Russian activity in the condo market would be limited. Also, some units already purchased by Russians but not yet transferred would be returned to the market as they could no longer afford them, she said.

The view of a decline in Russian investment and growth in Chinese interest is backed by top Tahi developer, Quality Houses, which says around a third of its properties in Chon Buri province have been sold to buyers from China and Japan.

President and Chief Executive Officer Chadchart Sittipunt told the Nation website that it supplied homes worth Bt55.19billion from 2012-2014, while purchase demand was around three-quarters at Bt40.55billion.

With the baht at a six-year low, foreign investors can buy Thai properties at a cheaper price in their local currencies,” and Hong Kong investors are taking advantage of the situation, says Aliwassa Pathnadabutr, Managing Director of CBRE (Thailand).

“Hong Kong has also long been the top foreign nationality for [investment in] Bangkok properties and we expect this to be maintained … for the rest of this year.”

Unlike the UK or Australia, actual sale prices are not publicly available data in Thailand even though this information is collected by the Land Department when the transfer of title takes place.

Though asking prices for resale units do not always reflect real market prices, they are an indication of them. Potential purchasers can easily see asking prices by looking online at the units being offered by major agents or by searching on the internet.

Source: http://www.opp.today/chinese-replace-russian-demand-for-thai-condos/ by http://www.opp.today/author/editoroppconnect/