As wealthy Russians have pulled back spending on overseas property in some countries as a result of the political and financial troubles, and instead turned to safe havens, there has been a desperate scramble to replace the business lost.
The loss of business has been keenly felt in Thailand, where Russians were among the leading buyers of prime beachfront condos, and developers are pinning their hopes on the Chinese to replace the Russians, agents say.
Andrew Taylor, co-CEO of leading Chinese overseas property website Juwai.com, tells OPP.Today, “For the past half-decade, the primary international buyers for Thai beachside condos have been Russians. With declining oil prices, the weak Russian economy, the falling ruble and international sanctions, there are fewer Russians willing to buy today.
“Developers are looking for other overseas buyers, and those from China seem the likeliest prospects. The Chinese like Thailand because it is close by, offers an attractive lifestyle and is relatively affordable.”
But developers and agents have to market the country and their properties well and appoint specialist staff to work with Chinese buyers.
“The challenges are in recruiting staff with Chinese language expertise and with an understanding of Chinese buyer needs and priorities.
“Thai developers and agents also have to make a good case for investment in their country, given the recent political and economic instability. Investing in Thailand is very appealing, but there are many other appealing locations competing for the same yuan.”
According to Juwai.com, there has been a huge increase in the interest showed by Chinese real estate buyers in Thailand.
Over the past year the China Purchasing Interest Index for Thailand in Quarter2, 2015 has soared 180% By comparison, the combined Purchasing Intent Index for the five most popular countries with Chinese buyers in the second quarter of 2015 (the United States, Australia, the UK, Canada, New Zealand) rose just 37%.
On a quarterly basis, the Thai Purchasing Intent Index is up 51%, while the five countries index has seen a 1% drop.
The average price Chinese buyers enquire about has also increased substantially, by 39% over the prior quarter and by 111% over the prior year, to a new high of $611,062. In Quarter 2, 2014, the average price was less than half of that at $289,474.
“To sum up, we see a picture of rapidly increasing interest in Thai property, with many new buyers more well-heeled than their predecessors – and purchasing more expensive property,” the report concludes.
The main picture is by Wimolmas Poklin and is from FreeImages.com.