Chinese investors help fuel demand for housing sector in tourist areas
DEMAND FOR residential properties in tourist destinations – especially Chiang Mai, Chiang Rai and Khao Yai – is still growing strongly, driven in particular by Chinese nationals buying a second home or investing for rental income, property experts say.
“Up to 80 per cent of our Chinese customers who bought in our residential projects in Bangkok or in tourist destinations were investors looking for rental income that generates a return on investment averaging 5-8 per cent a year,” Pitchakorn Meesak, Sansiri’s deputy vice president for international marketing, said in an interview with The Nation recently.
She said they were investing in Thailand’s residential-property market because prices here are still lower than in other markets in the region such as Hong Kong and Singapore, where prices can exceed Bt1 million per square metre.
According to a survey by Plus Property Co, a subsidiary of Sansiri, real-estate growth was found to be closely linked to tourism growth in Chiang Mai, Chiang Rai and Khao Yai, with average property sales of 79 per cent and tourism growth of 13 per cent.
Chiang Mai in particular is experiencing property sales of up to 82 per cent due to its numerous tourism attractions, which have contributed to foreign media labelling the city as one of the most attractive for real-estate investment in Asean. Moreover, there are also plans for an airport in San Kamphaeng district, while a high-speed railway link to other parts of the country is in the works, which will drive real-estate prices even higher in the future.
An analysis of the market in Chiang Mai province found that there were 179 real-estate projects on the go, with sales of up to 82 per cent from a total supply of 27,709 units. There was good response to detached homes sold at prices lower than Bt10 million. Sales were best in the Chiang Mai city area, but were good even in outlying areas thanks to demand from Bangkok buyers, who often purchase property in the North as vacation homes.
Average market saturation of 5.7 units per month per project was found for properties in the price range of Bt7 million to Bt9.99 million.
Further research found that the supply of detached homes in the upper market – costing Bt25 million to Bt50 million – had a response rate of 79 per cent, with most projects in this category located outside Chiang Mai city, near natural tourism attractions. These properties are generally purchased as premium vacation homes based on demand for larger space and living areas that are close to nature.
Some of these homes were found to be worth more than Bt30 million, such as those in Mae Rim district. It is evident that there is currently good demand for premium properties in Chiang Mai province.
The survey found that Chiang Rai experienced sales of 76 per cent of the province’s total supply of 4,161 units, with a market saturation rate of 2.6 units per month per project and most demand coming from local residents purchasing property for personal housing.
There is good response for properties priced at less than Bt3 million with locations in highland and lowland areas of Chiang Rai city. There is also good response in the condominium market for one-bedroom units priced from Bt40,000-Bt60,000 per square metre.
The province’s condominium market has demonstrated a saturation rate of 6.6 units per month per project, while the markets for detached homes and townhouses have saturation rates of 1.9 units and 8.2 units per month per project respectively.
Meanwhile, real estate in the Khao Yai area of Nakhon Ratchasima province had a supply of 5,078 units when the survey was taken, with demand of 72 per cent.
Condominiums continue to represent the biggest market there, with new supply showing an average response rate of 87 per cent, or 11.7 units per month per project, as of the latest survey conducted last year. Demand was best in the price range of Bt60,000-Bt80,000 per square metre, with most demand coming from non-residents looking to purchase properties as vacation homes or for investment.