Chinese Millennials are buying South-East Asian property online

Young, tech-savvy Chinese individuals are flocking to specialist online platforms to buy international properties.

Uoolu.com, the biggest of the sites, reported a 60 per cent surge in transactions to US$740 million in 2018 and predicts a doubling this year. A bulk of the money flows to South-east Asia, where property prices are cheaper in comparison to Beijing or Shanghai.

One-stop Service websites

The key selling point of buying properties online is convenience. The website offers a one-stop-shop aimed at meeting the various needs of buyers.

The Shanghai-based head of research at property broker Centaline Group, Liu Yan, observed that “Purchases have become simpler with online platforms“.

Buyers can choose a property within hours by making an initial payment of less than US$1,500. In addition to that, Uoolu also helps purchasers get mortgages from overseas banks, find tenants and collect rent.

In fact, about half the buyers make their purchase without actually visiting the property. And about 22 per cent limit all their transactions online. This group of people see no need to communicate with an agent either via phone call or face-to-face meeting.

Demand for South-east Asian property

South-east Asian property is popular because the low prices equate to more manageable down payments. This is especially crucial for buyers who are navigating China’s currency controls which include a US$50,000 annual foreign-exchange quota.

Moreover, countries such as Thailand, Indonesia and the Philippines do not have barriers to foreign purchases. This makes them more attractive in comparison to countries such as  New Zealand, Canada, Singapore and Australia which implement a certain level of control.

Among them, Thailand was the most popular destination for Chinese buyers in 2018. Buyers from mainland China and Hong Kong combined bought an estimated 15,000 new apartments in Bangkok. This makes up half of all purchases by foreigners as estimated by the research provider.

Motivation for Offshore Investments

The expensive home prices and government controls that restrict purchases in China makes international properties more appealing.

However, while online transactions are flourishing, more traditional agencies remain dominant. Such is the case because many people are still averse to buying a property, especially an expensive one, without physically seeing it.

According to Joanna Burger, head of international residential for North China at JLL, many buyers still require “a lot of hand-holding and guidance,” especially when considering issues such as location, transportation and schooling.

Yet, with that being said, the click-to-buy approach has worked well for many. One example is Chen, a bank manager, who is satisfied with a 6 percent rental return on her Thai homes, which were purchased by the sale of her Beijing apartment that was previously only generating just a third of that rent.

Chen comments that in Bangkok, “prices are much lower, the climate is good, it’s suitable for retirement life, and also easy to rent”. The successful experience that she has with the online property platform has enticed her to look into buying similar properties in Cambodia.

Why do you think Chinese buyers are flocking to South East Asia? Voice your thoughts in our comments section or on our Facebook community page.

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