Increasing Investors from Hong Kong flock to buy Bangkok Condos

Increasing Investors from Hong Kong flock to buy Bangkok Condos

A strong condo market in Thailand has been encouraging Hong Kong investors to put more money into property there, giving them potential returns of 5%+ each year. The general manager of Siam Commercial Bank in Hong Kong, Theerapan Nunthapolpat, revealed in an interview that investors are mainly looking at condo units priced between Bt5 million and Bt10 million.

Popular locations for Hong Kong investors include the main tourist destinations of Pattaya and Phuket as well as the Sukhumvit area of Bangkok. One of the reasons these investors are taking an interest in Thailand is that property prices are much lower than they are in Hong Kong.

Condos in Hong Kong can command anything from 10,000 and 40,000 Hong Kong dollars per square foot. In Thai terms that would be between Bt450,000 and Bt1.8 million per square metre. For similar properties in Thailand, a similar investment would cost only between Bt150,000 and Bt250,000 per square metre. In Thailand the luxury condo with the highest prices is Bt550,000 per square metre.

Another issue for investors in Hong Kong is the low interest rates. The returns are low so they are looking for ways to maximum potential return. Return on a Thai condo can be as much as 6% a year, while in Hong Kong the rate of return is only around 0.02% each year.

Interest in the Thai property market was also encouraged by a number of roadshows held by Thai property firms in Hong Kong. The bank then saw the number of enquiries from Hong Kong investors rise dramatically.

Some Thai property companies have been able to sell condos to investors not only in Hong Kong, but also in Singapore, China and Taiwan since starting overseas marketing campaigns a few years ago. Most are noticing that the CBD in Bangkok is the most popular area, particularly that around Sukhumvit Road, with most investors limiting their investment to a maximum of Bt10 million.

Most of these investors are cash buyers and most use a property management company when they rent out the condos. Some investors are enjoying a return of up to 8% a year which is high when compared with property in other countries.

Research has suggested that Hong Kong investors are looking to Bangkok properties as a long-term investment that will generate the higher returns. Bangkok Living believes that 2016 was an outstanding year for luxury condo investment in the city with prices rising and demand remaining high even though the economy in Thailand was facing a downturn.

Thai developers with land holdings in prime locations have found it to better to develop the land as this gives higher returns. When it comes to demand, most buyers are not relying on any kind of loan to purchase property and demand in this segment is high from buyers from Hong Kong.

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