Chinese homebuyers eye Southeast Asia

Investors attracted by high returns

An increasing number of Chinese homebuyers are snapping up properties in Southeast Asian countries, with many of them attracted by the high returns and beautiful scenery.

Several homebuyers the Global Times spoke to on Sunday shared one common reason why they are eyeing properties in Southeast Asia.

"I am always attracted by beautiful islands, and it would be nice to stay there occasionally," said a Chinese investor surnamed Huang who now lives in Changzhou, East China's Jiangsu Province. He has already reserved two apartments in the Philippines and in Thailand, and the sales will start at the end of this year.

Another woman surnamed Gao who has been on sailing holidays in Southeast Asia said she is considering buying an apartment in Cebu, the Philippines.

"The market is super hot now. Many Chinese people are coming to Southeast Asia to buy houses," she said, noting that one apartment in Cebu she intended to buy last year has surged in price by 15 percent because of an increase in potential buyers.

One Chinese investor offered a bid for a building in Cambodia for $200 million at an event in Shanghai on Wednesday, reflecting the fact that investors also want to tap into countries along the route of the Belt and Road (B&R) initiative, financial newspaper the Economic Observer reported on Sunday.

Thanks to the B&R initiative, as well as progress in the long-awaited Thailand-China railway project, plenty of Chinese homebuyers are optimistic about the real estate market in Thailand, said an employee surnamed Dai at a real estate agency specializing in properties in Pattaya, a resort city in Thailand. "In some major cities like Bangkok, the investment returns can reach 4 to 5 percent, which is high," he told the Global Times on Sunday.

Some Chinese investors who have purchased apartments in Pattaya, and who rent them out during the peak tourism season, can get returns of 6 to 7 percent, he noted.

Travel plus home purchasing has become a phenomenon for Chinese investors in Thailand. In 2016, the number of tourists from the Chinese mainland to the Southeast Asian country reached 8.77 million, accounting for nearly 30 percent of the foreign tourists in Thailand, according to the China National Tourism Administration.

"Surging Chinese tourism to Thailand has become a driving force for local real estate growth," Dai said.

Thailand is now ranked as the third most favored destination by Chinese homebuyers, following the US and Australia, the Economic Observer noted, citing data from the Shanghai-based overseas housing market data platform juwai.com. Malaysia is also increasingly popular among Chinese investors.

"Thailand saw its real estate market rise later than Malaysia and Singapore, and now investors consider Thailand an emerging market," Yan Yuejin, a research director at the Shanghai-based E-house China R&D Institute, told the Global Times on Sunday.

Restrictions looming

Since the beginning of this year, the Chinese government has come up with policies to curb capital outflows, which could affect purchases of overseas properties, investors noted.

The People's Bank of China, the country's central bank, unveiled rules for yuan transfers at the beginning of this year, and the State Council, China's cabinet, unveiled new guidelines in mid-August to limit outbound investment in industries such as real estate, hotels and the entertainment and sport sectors.

Since July 2017, banks and other financial institutions in China have had to report all domestic and overseas cash transactions of more than 50,000 yuan ($7,201), compared with 200,000 yuan previously.

Tightened rules on capital outflows will definitely affect overseas investment by financial institutions and by individuals, which will have an impact in some emerging markets like Thailand, Yan noted.

"Investors should remain cautious on this matter," he said.

Still, some investors said they are not worried about capital controls. "The new rules may pose an impact on money transfers, but homebuyers can transfer money through some private banks," said the Chinese homebuyer surnamed Gao.

The agent surnamed Dai also noted that some real estate agencies overseas will help Chinese homebuyers prepare the documents needed to buy apartments, and said the government's capital curbs could be circumvented.