Soon after China decided to lift border controls in January, ending three years of zero-COVID measures, Stephen Yao embarked on a new mission.
Representing more than 200 middle-class Chinese families with many in second-tier cities, the Guangdong-based property agent has been searching for buyers for the investment properties his clients bought in Southeast Asian countries before the pandemic.
Property used to be the most favoured investment for Chinese people engaged in wealth accumulation, when it promised rapid and steady economic growth.
Small apartments and condominiums in Southeast Asia, especially Thailand, were a popular choice for the Chinese middle classes in the late 2010s due to affordability and geographic proximity.
But amid a bumpy reopening recovery, a protracted property crisis at home and dwindling growth of household wealth, some have struggled with worsening financial conditions and had to scale back overseas investment.
“If we take into account rental returns and changes in exchange rates, most of their property investments overseas are actually profitable in terms of yuan,”
Yao said.
“But a number of them can no longer afford the final payment for their property investment and desperately need cash to solve their domestic financial problems, such as business failures, layoffs and mortgage loan defaults,” he said.“Some no longer have the extra funds to continue holding these overseas properties.”
Back in 2017 and 2018, Yao made 32 trips from his home in southern China to Thailand to help his Chinese clients buy condominiums in the downtown area of Bangkok and Pattaya with a unit priced between 500,000 yuan (US$68,400) and 2,000,000 yuan.
“Many of the buyers were ordinary middle-class families from second-tier cities in China engaged in the tourism, export and services industries,” Yao said.
“Since the pandemic, their income has dropped significantly and the market value of domestic properties has also declined. “For their overseas investment, it is entirely different now in terms of both their liquidity and geopolitical situation.” Source: SCMP
