Chinese people flock to invest, real estate market of a Southeast Asian country grows rapidly

As the domestic real estate market sinks into a prolonged recession, more and more Chinese investors are turning to Thailand to seek opportunities. However, along with the hot development of the market, scams are also increasing.

Chiang Mai, the second largest city in northern Thailand, is a favorite real estate investment destination for Chinese investors. (Source: Shutterstock)

Zoe Yu, a 45-year-old photographer from Ningbo, southeast China, ran into trouble when she invested in real estate in Thailand’s second-largest city, Chiang Mai. Attracted by affordable internationaleducation and low living costs, she signed a contract to buy a 10 million baht (about $293,000) villa in January 2023 after being introduced by a Chinese friend.

However, she soon discovered that foreigners are not allowed to own land or houses outright in Thailand. Although Yu’s contract was not legally binding, she fought back and won a refund in July this year, after losing more than a third of her investment in transaction and renovation costs.

Yu’s case is not an isolated one. In June 2023, the case of a British investor named David Edward Chappelle who claimed he was scammed when buying real estate in Thailand quickly attracted public opinion in this country. Accordingly, he bought an apartment on the famous tourist island of Koh Samui for 15 million Baht and then discovered that the broker had not registered the real estate under his name.

In September 2024, two Australians filed a complaint against a real estate broker for fraud in the southern resort town of Phuket after paying more than 5 million baht for an apartment that they soon discovered was a scam. Although they won the case in civil court, the two have yet to receive compensation.

According to House Condo Lawyer, a Thai law firm specializing in real estate investment consulting, the Thai real estate market is becoming a hotbed of fraud as forged documents and illegal transfers are becoming increasingly common.

On December 16, police in Pattaya city arrested five Chinese citizens for illegally operating as real estate brokers.

House Condo Lawyer emphasizes that many scams and frauds stem from a lack of due diligence and gullibility in trusting relatives and fellow countrymen. "Believe it or not, more than 60% of property scams in Thailand involve locals," House Condo Lawyer warns.

According to data from the Real Estate Information Center (REIC) of the government housing bank of Thailand, the number of condos transferred to foreign buyers in 2023 increased by 25% compared to a year earlier. Of these, Chinese nationals were the biggest buyers of Thai real estate - accounting for nearly 46% of all foreign-owned condominiums in 2023 - as Thais sought alternative investment channels amid a prolonged housing market downturn in the world's second-largest economy . Chinese investors are estimated to have purchased 6,614 condos in 2023, up 16% from the same period last year.

On Chinese social networks, hashtags promoting the potential and opportunities of the Thai real estate market such as #LifeInThailand or #ThaiPropert also attract hundreds of millions of views and comments.

To curb the rising trend of real estate fraud, the Thai government is considering easing restrictions on foreign ownership to attract more foreign capital into the sector.

In June 2024, Thailand’s Ministry of Interior put forward proposals to allow foreign buyers to own up to 75% of a building’s units – up from the current 49% – and to extend the rental period for foreigners. However, these proposals are still being considered and scrutinized.

If passed, these regulations are expected to revolutionize the Thai real estate market for at least two decades, according to Daniel Ho, co-founder and CEO of real estate technology company Juwai IQI.

Juwai IQI also recommends that investors work closely with reputable real estate lawyers to protect themselves and handle situations when problems arise.

Source: https://baoquocte.vn/dan-trung-quoc-do-xo-den-dau-tu-thi-truong-bat-dong-san-mot-quoc-gia-dong-nam-a-tang-truong-nong-297243.html