Investment funds from China being used to snap up condos and houses for later resale, property consultant says
An increasing number of companies funded by Chinese investors have been buying properties for rent and sale in key economic cities, and the government’s plan to increase the leasehold period for foreigners from 50 to 99 years is expected to further boost this trend, consulting firm Property DNA said.
The proposed plan also aims to increase foreign ownership in condominiums from 49 to 75 per cent of usable space.
“These companies, established under Thai law or through a joint venture with Thai partners, have been using investment funds from China to buy condominiums and houses in big cities,” Property DNA’s managing director Surachet Kongcheep said on Monday.
“They aim to sell or rent these properties to wealthy Thais or foreigners later on, especially those looking for residences in Bangkok, Pattaya and Phuket,” he added.
The firm estimated these Chinese-funded companies have invested over 100 billion baht in these cities in the past 15 years.
Surachet said that if the proposed plan to increase the foreign property ownership ratio and leasehold period was approved, it could spur more Chinese investors to enter the Thai property market to snap up units in anticipation of increased demand from foreigners.
“Thai property developers estimate that the new rules would help expand the sales among foreign buyers, but it could be these companies, operated by Thai nominees or Thai joint investors, that will sweep up all the supply,” he said.
The Department of Business Development reported that in the first half of 2024, Chinese companies invested 382.06 billion baht in Thailand, or 9.48% of all foreign direct investment. This put China in third place of countries investing the most in the kingdom, following Japan (993.35 billion baht, 24.65%), and Singapore (473.57 billion baht, 11.75%).
The top five industries/sectors to received the most investment from China are automotive and parts (19.47 billion baht), tyres and inner tubes (16.86 billion baht), property not for own residence (14.62 billion baht), steel and iron manufacturing (13.65 billion baht), and electricity generation and distribution (12.93 billion baht).
Source : THE NATION
August 19, 2024
