The Thai condominium market is experiencing a significant slowdown due to the withdrawal of Chinese and Russian capital.
Key takeaways
- The Thai condominium market is slowing down due to reduced investments from Chinese and Russian buyers.
- Condominium sales to foreigners dropped by 6% in Q2 2024, with the total sales value decreasing by 18%.
- The Thai government is considering measures to revitalize the real estate market including easing property ownership restrictions for foreigners.
In recent years, Chinese and Russian investors have dominated the condominium market in Thailand, particularly in cities like Bangkok and Pattaya.
According to data from the Real Estate Information Center (REIC), in 2023, Chinese buyers acquired 6,614 units, representing 46% of total foreign sales, while Russians purchased 1,260 units. However, the situation has drastically changed in 2024.
The withdrawal of Chinese investments is attributed to several reasons, including restrictions imposed by the Chinese government on capital outflows and the economic slowdown in China.
Additionally, the war in Ukraine and international sanctions have affected the ability of Russian investors to move capital abroad. These combined factors have significantly reduced the demand for properties in Thailand from these two key investor groups.
The decrease in demand has had a notable impact on condominium prices and the number of units sold and according to the REIC, condominium sales to foreigners in the second quarter of 2024 decreased by 6% compared to the same period the previous year, with a total of 3,342 units sold. The total value of these sales also dropped by 18%, reaching 14.8 billion baht.
Real estate developers in Thailand are seeking new strategies to attract buyers from other countries and mitigate the impact of the withdrawal of Chinese and Russian investments.
Some offer special incentives, such as discounts and flexible financing plans, to attract buyers from emerging markets like India and Southeast Asia.
Additionally, the Thai government is considering measures to revitalize the real estate market, including easing property ownership restrictions for foreigners and promoting Thailand as a safe and attractive destination for real estate investment. These initiatives could help stabilize the market and attract new investors in the future.
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