China’s Belt and Road initiative isn’t simply improving infrastructure in the 24 countries that make up the ambitious programme. Countries in Southeast Asia that are part of the Belt and Road, including Thailand, Malaysia, Vietnam, the Philippines and Indonesia, have all seen an influx of Chinese real estate investors.
Beijing has already invested USD 50 billion in the countries that make up the Belt and Road region. Southeast Asia may not have a large role, but its strategic location and proximity to the mainland mean it will be integral to the success of the project.
And while capital controls were supposed to dampen overseas real estate investment from China, leading Chinese property portal Juwai.com told China Daily the negative influence of capital controls has been, at least partially, offset by the positive influence of the Belt and Road initiative.
Belt and Road benefits these 3 ASEAN real estate markets
While most property markets in ASEAN have seen a boost in Chinese investors, there are three countries that stand out. Thailand, Malaysia and the Philippines have all seen an increase in Chinese interest since work on Belt and Road began.
Chinese interest in Thai property is nothing new. Mainland investors were responsible almost 30 percent of condominium purchases in 2017, according to CBRE figures. Additionally, Juwai reported the Kingdom was the third most searched for global property destination among its Chinese users in 2017.
Interest from Chinese buyers isn’t limited to the Thai capital. Pattaya was the top location among Chinese investors while Chiang Mai was third with Bangkok sandwiched in between the two holiday spots. This isn’t surprising. Data from the Thai government showed nearly 12 million visitors came to the country last year, with resort areas being the most popular destinations.
With tourist arrivals from China booming and Belt and Road in full swing, not to mention Alibaba now committed to investing in the Eastern Economic Corridor, Chinese interest in Thai property shows no signs of slowing down.
The addition of Malaysia to the Belt and Road initiative was simply the cherry on top of the proverbial sundae for Chinese real estate investors. Research from Knight Frank showed that 35 percent of residential transactions conducted in the past five years were carried out by foreign buyers with Chinese investors accounting for the bulk of these.
According to Judy Ong, executive director of research and consultancy at Knight Frank Malaysia, the country is attractive to mainland investors due Malaysia’s political stability and developed infrastructure as well as the pleasant lifestyle and environment provided. Meanwhile, the Malaysia My Second Home (MM2H) has made the country more attractive to retirees from China.
Thanks to thawing relations between Manila and Beijing, Chinese investment in the Philippines is rising with the Belt and Road initiative playing a factor in this. Of course, the surging Filipino economy has played its part in the increase as well.
“I think it’s because of the good relations between the Philippines and China. But it’s also because of a strong property market, the ability to come here and buy property at reasonable price and get attractive yields. I think the fundamentals of the economy and real estate are rock solid,” Santos Knight Frank chairman and CEO Rick Santos said earlier this year.
Filipino developers are already seeing an influx of Chinese buyers. SM Prime’s international condominium sales were up in 2017 with mainland investors accounting for 10 percent of this while nearly 50 percent of Ayala Land’s international sales last year were to the Chinese market, Colliers reported.