Thanks to the booming tourism industry of Phuket, investors from all around the world are taking interest in grabbing a piece of the pie for themselves. Similarly, tourism-based economies guarantee a safe ROI because of good occupancy rates and rental income.
Over the past few years, most of the property investments in Phuket are being made by Chinese investors. High-end tourists come to visit this city looking for villas for rent Phuket and end up buying a vacation home for themselves.
Why the Chinese love Phuket Real Estate
China’s population hit 1.41 billion figures by the end of 2018. Other than this, the country has seen an enormous growth parallel to none. It is now a manufacturing based economy second only to the United States of America. Here are some reasons why Chinese are investing in Phuket real estate.
The current status quo of the real estate market is not something out of rage for many. This tells us that real estate values are yet to hit their highest value. With the value of money being so great, the appreciation of property is viewed to be the prime driving factor for investors from China.
Since Phuket is a small island, the land is scarce. This scarcity will end up taking property prices to a whole new level in the coming years.
China is dealing with environment-related issues. With the quality of food and air decreasing in their metropolitans, people looking to catch a breath of fresh air tend to relocate to places closer to nature.
The closest natural retreat happens to be Thailand. Phuket not only has great air quality but it also offers authentic Chinese and Thai cuisine which is free of fake ingredients.
The Freehold Leverage
State of affairs in Chinese real estate doesn’t benefit the investor that much. They follow the leasing concept where a property is said to remain in the ownership of the government. People can lease real estate for a 30 to a 70-year lease.
On the other hand, foreign investors are allowed to freehold property in Phuket when buying a Condominium. This means that they become perpetual owners of whatever they buy. Similarly, the ROI on rental property in Phuket is 5-8% per annum—which is trivial when compared to the mortgage rates of 0.35%.
Interest on State Level
The Chinese and Thai authorities have recently agreed upon working together on the Belt and Road Initiative. It is an initiative taken by the Chinese government to work on infrastructural development in its neighboring countries to boost trade and relations among one another. This step by the Chinese government has taken investing in Phuket on another level and great infrastructural development is around the corner.
With the increasing number of Chinese tourists each year, it is easy to predict that the state of affairs in the Phuket real estate market is going to change. Still, many of the Chinese investors are new to the concept of how great it is to invest in Phuket real estate. As time unfolds, we’ll witness that the Chinese investments will drive the Phuket market to new heights.