Chinese real estate investors are snapping up more properties than ever before, according to a new survey from DBS. The focus for many of these buyers is now the Philippines and Southeast Asia as a whole after major cities, including Vancouver, Melbourne and Hong Kong, enacted stamp duties on foreign buyers.
This evidence is supported by data from Juwai, the No. 1 Chinese international real estate website. There has been a shift in buying preferences from Chinese real estate investors. While gateway cities are still popular, they are facing increasing competition from many countries in Southeast Asia.
“Southeast Asia has been gaining Chinese buyer market share faster than any other global region since early 2017,” Carrie Law, CEO and director of Juwai.com, stated. “In 2016, only three Southeast Asian countries made it into the top 15 for Chinese buyers, and none made it into the top five. Last year, five made it into the top 15. Thailand alone jumped from 6th place to 3rd, bypassing Canada.
Thailand, Vietnam, Malaysia and the Philippines all recorded a significant uptick in Chinese real estate buying activity. Smaller countries like Cambodia recorded very rapid growth in Chinese property acquisition while even Singapore remained attractive. The Belt and Road Initiative, investment returns and lifestyle are some of the key factors mainland buyers consider.
“The biggest drivers are the lower prices in these countries and the fact that they seem to have government blessing as Belt and Road Initiative countries,” Law pointed out. “Capital controls are constraining the amount Chinese buyers can spend, so they have turned to lower priced countries and lower priced property even in high-cost countries like Australia.”
Investors gamble on the Philippines
The Philippines made an appearance in Juwai’s top 15 countries for buyer enquiries landing at 13th place. The success of mainland offshore gaming firms and BPO companies has increased the confidence many Chinese real estate investors have in the country.
However, that is not the only reason for the increase in Chinese activity. A thawing of relations between Manila and Beijing, along with strong rental yields and home price growth, has caused Chinese investors to take notice of the Philippines’ real estate market.
Thailand benefits from EEC and tourism
Thailand’s Eastern Economic Corridor (EEC) project and rising tourist arrivals are expected to lead to even more Chinese second home buying. Data from Juawai found the “Land of Smiles’ to be the third most popular country among mainland investors for overseas real estate acquisitions.
Pattaya was the top location among Chinese buyers with Bangkok in second and Chiang Mai finishing third. Many of those enquiring about property in Thailand via Juwai had more than one motivating factor. This would explain why tourism properties such as condotels in resort destinations are being sold at record rates.
Vietnam soars in the eyes of Chinese investors
After years of being off international property investors’ radar, Vietnam suddenly found itself in the spotlight last year. The country ranked ninth in terms of popularity among Chinese buyers with both condominiums in Ho Chi Minh City and luxury resort properties proving to be a solid investment. A loosening of foreign ownership restrictions along with low property prices have contributed to Vietnam’s rapid rise as a real estate investment destination.
Interest in Malaysian property inched higher
Malaysia has always been popular among mainland real estate buyers. According to stats from Juwai, the country was the tenth most popular last year, up one place from 2016. There has been some murmuring that the recent election results will see Chinese investors take their money elsewhere, but most experts do not believe that will happen as long as MM2H is in place.
“Buyers motivated by pure investment may hold back to see how events play out,” Law told the South China Morning Post. “However, most buyers are end users purchasing to study in Malaysia, work here or retire here. They will continue to buy as long as visa and education policies remain favourable.”
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