Why Is Thailand a Popular Destination For Singaporean Investors?

Thailand has long been an attractive, sought-after destination for holiday makers and investors alike. It is a beautiful country with a glorious culture, friendly people, and some of the finest food that the world has to offer. And while these many benefits certainly help, there are much deeper reasons behind the fact that Thailand has become increasingly popular with Singaporean investors recently. So, why is it? Why are so many Singaporeans choosing to invest their money in property in Thailand over other nearby countries? In this article, we’ll delve a little deeper.
About Thailand’s economy
Thailand is the second largest economy in all of Southeast Asia. It is experiencing strong growth and has reported inflation rates of 5% for most of the last 10 years. It has a well-developed transportation system, great infrastructure and communications networks, and supports a wide number of sectors including automotive, food manufacturing, and of course, tourism (for which the country is world-renowned).

Thailand’s GDP was forecast to grow by 3.8% in 2019. While the covid-19 pandemic certainly shook the world up, the Kingdom is making a stellar recovery.

Not only that, but with a large population of 68-million people, a rising consumer economy, and a skilled and highly-qualified workforce, Thailand is proving to be a very suitable location for Singapore firms to invest in.

The main drivers of Thailand’s growth, is of course, tourism and exports. While the tourism sector took a massive hit with covid-19 (as did every other nation), the automotive, electronic goods, and agricultural products (rice, rubber, sugar, etc.), are very much alive.

Thailand is irrefutably beautiful and an easy sell
Thailand is one of the most beautiful destinations in the world and people are instantly attracted to its natural splendor. Thailand has the largest market for luxury holiday homes in the region as well, making it attractive to Singaporean investors who would like to make an ROI by renting their property out to tourists, year-round.

And while there are restrictions on foreigners owning land in Thailand, in the luxury property market there are plenty of condos and apartments that can be purchased.

Renowned resort locations such as Hua Hin and Pattaya have a wide variety of condos where buyers can find quality housing developments. Then further south to places like Phuket and Koh Samui, there are glorious beach-front options where investors can seek out a touch of luxury.

There’s so much variety in Thailand
While Bangkok is arguably quite expensive right now, there are some great investment opportunities. It is a large, bustling metropolis with an international charm that attracts people from all over the world. Bangkok is and always will be a capital city that will see a lot of visitors.

Then you have places like Chiang Mai in the north. This glorious mountain city offers a very different lifestyle to Bangkok, making it another attractive location for investment. Of course, if the glorious green rolling hills aren’t quite for you, there’s always one of the 1,430 island in Thailand! Take Koh Samui or Koh Pangan as examples: these gorgeous islands have plenty of hot real estate available, providing investors and holiday makers with an irresistible island life.

The fact is, Thailand has so much variety. That, coupled with the cheap cost of living, the glorious weather, and the charming culture make it an irrefutably clever place to invest in property and Singaporean investors have been recognising the potential.

Chiang Mai is particularly popular with Singaporean investors. Why?Chiang Mai is popular with investors from Singapore. Why is that?

Chiang Mai’s property market boasts prices that are still noticeably lower than most other hot destinations in Thailand. This is one attractive benefit. The other is in light of the rising property prices in Singapore – or rather, soaring.

Many investors are leaving Singapore simply because they can get far more “bang for their buck” elsewhere. They are not feeling quite as confident in Singapore property as they are, Chiang Mai, as an example.

Typically, Singaporean investors look for properties in destinations where prices have not quite peaked yet. Those who are middle-income investors can get excellent real-estate investment opportunities in Chiang Mai, and indeed, Johor Bahru in Malaysia. Not only that, but these two destinations are incredibly popular tourist spots, thus making them ideal for investors who would like to rent out their properties as holiday homes.

In addition to that, Singaporean investors would rather not have to head all the way over the London, or New York, when instead they can invest in a beautiful location on their very doorstep.

Chiang Mai is particularly popular right now because places like Bangkok are no longer quality candidates. They have become far too crowded and the lifestyle is quite similar to that of Singapore (that and property prices are climbing).

Property prices in Bangkok were projected a capital gain of some 20% from investments over three to five years. Chiang Mai on the other hand is boasting some as high as 40%, which is a significant difference at these numbers.

But it’s not just the fact that Chiang Mai is a beautiful spot, close to home, with some seriously cheap real estate. There are some other economic factors which have been attracting Singaporean businesses – which in turn brings Singaporean expats who are looking to relocate and live in Thailand permanently.

Malaysia is a close competitor at the moment
While Thailand remains incredibly strong for Singaporean investors, Malaysia is a rather close competitor at the moment. This is because Malaysia has a very diverse range of properties available at the moment, from condos, mansions, and villas as well. Such broad real estate options provide an attractive option to a variety of investors, catering to different lifestyles – whether they be after modern, contemporary, or architectural gems.

One of Malaysia’s biggest assets right now however, is the attractive cost of living. Malaysia is currently one of the cheapest places to live in Southeast Asia. Thailand used to boast incredibly low prices, but as the economy thrives, prices are indeed on the rise (though still attractively low when compared to the west).

Thailand is great for Singaporean businesses. Why?
Thailand has a growing consumer market with a climate for investment that is driving expansion plans throughout the country. In a report commissioned by HSBC, the Singapore Business Federation found that there were over 1,000 Singapore-based companies who are interested in over-seas expansion. Almost 90% of which are SME’s with fewer than 200 staff (or an average annual turnover of some $100-million.

Thailand in particular has become a popular destination for Singapore based companies with international interests who are expecting to expand their efforts.

Of the companies that were surveyed it was found that over 80% of those companies had operations in Thailand with plans to expand even further over the next two years.

It’s good news for Thailand, given Singapore is already one of Thailand’s biggest sources of investment (behind China and Japan) and these numbers are expected to grow.

In 2017 alone, Singaporean businesses invested well over $4.3 billion into Thailand!

Beyond consumer price, Thailand’s manufacturing is incredibly strong and is now entering a high-end space. So, many Singaporean businesses are looking to invest in real-estate in Thailand and establishing many of their revenue-making operations. As Thailand’s supply and value chain continues to grow and innovate, these investments will only likely increase.

Conclusion
Ultimately, there are a number of factors as to why Thailand is such an attractive place to prospective Singaporean investors.

• Many new high-end developers in Thailand offer property management benefits (an attractive prospect offering investors peace of mind when they are overseas).
• Investors can make extra income from the property via various rental programs which, again, are often offered as an additional service by property managers.
• Great potential for Singaporean-based firms to invest (high-end manufacturing, cheap labour, affordable property, etc.).
• Thailand is comfortably close to Singapore (just a short 2-hour flight).
• The Thai economy has always remained relatively stable – even through the global pandemic.
• The property market in Thailand is reliable and always growing.
• Thailand is one of the most popular tourist destinations in the world and is likely to remain that way for many years to come.
• Property in Thailand is significantly cheaper than Singapore.