Opportunities for Thailand from One Belt One Road Initiative
As China’s economy slows, its investors are looking abroad for growth and Thailand, home to one of the world’s largest ethnic Chinese minorities and a gateway to Southeast Asia’s 600 million consumers, is a hot investment destination in everything from industry to condominiums.
China and Thailand are discussing cooperation on the Thai section of a rail project under the “One Belt, One Road” plan that would eventually connect Kunming in southwest China with Singapore. As the expatriate Chinese community grows and more Chinese look for holiday homes in Thailand, real estate investment is on the rise.
It started with a little known, outside of China, 2012 Chinese comedy film directed and co-written by Xu Zheng called “Lost in Thailand”. The ever popular Chinese actress Fan Bingbing really put Thailand on the map for Chinese travelers. The numbers have surged every year since 2012 and in 2015 the number of Chinese tourists surged 71% over 2014.
As is usual with Chinese tourism, this subsequently led to a wave of Chinese investing in real estate. In fact, 86% of Chinese property buyers started as tourists in the locations they settle down in.
The Chinese investment in Thailand came in waves. The first wave was businessmen creating the infrastructure for future Chinese tour groups in Thailand. So they invested in hotels, buses companies, and hospitality across Thailand.
Next came the tourists interested in coming back to Thailand and marveling at the, compared to China, incredibly cheap residential home prices in Thailand. As these Chinese pioneers invested in hospitality and houses in Thailand they created pockets that attracted more Chinese tourists.
At first, Chinese purchased real estate in cities like Pattaya, Koh Samui, Phuket, Chiang Mai and Bangkok. However, Chinese developers are now investing in major development projects in commercial, residential and hotel projects.
Thailand market’s strong domestic base ensures that there will be a reasonable demand for well-constructed residential units for many years to come. The country’s natural beauty and status as one of the world’s top tourist destinations give its property market a staying power that transcends political fluctuations.
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