Thai property developers are urging authorities to introduce stricter regulations to help local businesses compete against increasing foreign investments, particularly from China.
Foreign capital, especially from Chinese manufacturers and exporters, has been pouring into Thailand’s real estate sector. This trend has gained momentum in recent years due to changes in global trade policies.
Data from the Board of Investment (BOI) shows that Chinese investors submitted investment applications worth 146.36 billion baht between January and September 2024. As of October 31, Thai legal entities with Chinese shareholders increased to 29,913, with a combined registered capital of 409.3 billion baht—up 9.82% from the previous year.
Chinese investment has also driven a rise in work permits for Chinese nationals. By October 2024, 41,752 Chinese nationals held work permits in Thailand, the highest among all foreign groups. Their growing presence has strengthened their purchasing power in the property market.
A report from Cushman & Wakefield Thailand predicts a further rise in Chinese arrivals in 2025, boosting the demand for residential properties, both for rent and sale. Factors such as trade policies and diplomatic relations contribute to this ongoing trend.
While the Chinese economy faces some challenges, its extensive global trade network and business adaptability are expected to lessen any negative effects.
Challenges for Thai Developers
Local developers have raised concerns over the dominance of Chinese investors, who often operate with a self-sufficient business model. They bring their own developers, contractors, engineers, workers, and construction materials—most of which come directly from China at lower costs.
Many Chinese businesses register as Thai companies, meeting shareholding regulations but maintaining Chinese executives in key positions. This setup puts local businesses at a disadvantage.
Housing projects led by Chinese developers typically cater to Chinese buyers, creating competition for Thai firms, especially near industrial zones, factories, and the Eastern Economic Corridor (EEC).
Sunthorn Sathaporn, managing director of Sathaporn Estate and president of the Housing Business Association, pointed out that local developers already struggle with slow sales and weak purchasing power. The rising competition from foreign capital, particularly China, has made it even harder for them to compete.
Chinese firms not only develop residential properties for sale but also form partnerships with Thai companies. Sunthorn noted that their control over every aspect of construction—from financing to project completion—allows them to launch projects faster and at lower costs.
The lower prices of Chinese materials and the efficiency of their construction processes further widen the gap between Thai and Chinese developers.
Urgent Need for Adaptation
Sunthorn emphasized that Thai developers must enhance their competitiveness by offering high-quality services, incorporating sustainable practices, and embracing smart-home technologies that rely on local resources.
Larger firms may be able to withstand the pressure, but smaller businesses need to strengthen their brands and adopt faster construction methods to stay competitive. He also highlighted the importance of managing cash flow efficiently in response to weaker domestic demand.
Pornarit Chounchaisit, president of the Thai Real Estate Association, echoed these concerns. He noted that since changes in US trade policy, Chinese investments in Thailand have grown significantly. Apart from using Thailand as a base for manufacturing and exports, Chinese investors are acquiring land for real estate development.
He stressed the importance of stricter regulations to prevent unfair competition. He also pointed out the increasing number of unregistered Chinese factories in Thailand, which authorities are inspecting and shutting down.
Illegal operations and cost advantages in sectors like construction materials, particularly steel production, pose further challenges for Thai businesses. Without intervention, these issues are likely to escalate, further affecting local industries.
