Chinese investors are shunting other overseas markets in favour of Thailand.
Countries including Australia, Singapore, the United States and Canada have long been destinations for Chinese property investors. Now many are shifting their buying habits by turning to property in South East Asia with a particularly desire for Thailand. It is thought that the Kingdom has become a favoured place thanks to the more attractive prices. Plus the lucrative rental yields that can be achieved.
Whist one school of thought it that the Chinese have been deterred by restrictions placed on some markets in a bid to warn off overseas investors, evidence from UBS suggests otherwise. The investment bank conducted research to ascertain the motives behind these foreign investors. They noted that over the last six months the number of Chinese buying property to leave empty has reduced by 50 percent. Surveying in excess of 3,000 mainland Chinese they believe that the tightening of outward capital from the country is changing buyer habits.
Beijing placed curbs on its residents from transferring money out of the country. Initially it did not appear to have a huge impact. Investors sought alternatives ways to move money by teaming up with family and friends. But UBS has noted that investors are now taking time to consider their purchase compared to six months previously. At the same time those who are investing are less likely to pull out of the deal.
UBS have reported that, “Somewhat surprisingly, tightened capital controls haven’t greatly impacted Chinese consumers’ willingness to buy abroad, although capital controls do appear to be affecting more consumers now than six months ago”.
Simultaneously more purchases are made with cash than ever before. Now only a third of transactions need the help of a lender. Usually in the form of a Chinese bank. Plus another pattern UBS noted was that many Chinese are not completing on their property purchases in Australia. Making up half of all overseas investors in Australia suggesting that many are shying away from this market. The Chinese appear to be at a turning point in their foreign property purchases as buying habits change.
