Property market is unlikely to be negatively affected by restrictions placed on Chinese.
The Chinese are known globally for their property shopping sprees. Investing in major cities as a way to park their money and also to have for their own use, they have been cited at a reason for pushing up property prices by increasing demand. In 2015 they spent an eye-watering USD 28.5 billion in America on property alone.
Their interest in property in ThailandÂ has remained strong over the course of 2016. However the recent announcement as of the 1 January 2017 stresses the recent rules that have been put in place in an attempt to restrict theÂ purchasing power of the Chinese. This comes at a time when the yuan is weakening in strength and many Chinese are looking at alternative ways to safeguard their money, hence property being a popular investment asset.Â
Mainland Chinese are now restricted from converting currency for the purpose of buying foreign property.Â However, experts believe that this will have little, if not no, influence on foreign home transactions. This is despite China’sÂ foreign exchange regulator reinforcing that it would not permit foreign currency exchanges and punishments would be handed out to those who conduct in this manner.Â
Chinese investors are expected to identify loopholes in order to continue to buy property. Using either underground banks or pooling quotas designated to friends and family as residents are permitted to exchange up to USD 50,000 of yuan into foreign currency every year, the overseas property market is not expected to be affected. This is because many of China’s investors are astute to conditions with offshore investments and bank accounts already set up.
In addition some banks in the US have identified the restrictions that these new rules may create so are working to continue to attract Chinese investors. Increasing the loans that are available means that less money will need to be brought into the country. However, relatively speaking, the investments made in Thailand by Chinese are of a lower value than say New York or Sydney, so the Thai property market is expected to continue to attract the eyes of Chinese investors.