Thailand’s Hottest New Real Estate Market
For the first decade of the 21st Century, Chiang Mai was mostly overlooked by property buyers and investors, who concentrated mainly on the capital, Bangkok, and the coastal resort cities such as Pattaya.
This is situation started to change in 2011, however, as buyers – both domestically from other parts of Thailand and internationally started to see the huge potential of Thailand’s fifth-largest city.
To anyone who has ever visited Chiang Mai, the city’s attractions are obvious. Surrounded by beautiful rainforests and countryside, this predominantly low-rise city is an oasis of calm compared to Bangkok and the other main tourist centres in Thailand. Many people also prefer the more temperate climate in Chiang Mai to the year-round hot and humid temperatures further to the south. Chiang Mai is one of the few places in Thailand which has different seasons around the year.For these reasons, Chiang Mai is often hailed as one of the most liveable cities in Asia; occasionally the world. Many international visitors are now starting to retire to the city – permanently or as a winter escape from cold weather in their home countries. Chiang Mai’s foreign expat population is already in excess of 40,000 and growing fast, particularly from mainland China, where families are attracted by the lower prices of housing and the lower cost of international schools for their children.
Another major attraction to Chiang Mai is the fact that the cost of living here is a lot lower than any of the other more famous cities in Thailand – and this includes the price of real estate. While property prices in markets such as Bangkok and Pattaya have been rising constantly over the past decade, Chiang Mai is several years behind these two markets when it comes to prices. This means that it is still possible to buy a good apartment here for as little as $50,000. The prices in Chiang Mai are not going to stay this low for much longer though. Prices are now increasing rapidly – faster than anywhere else in the country as the real estate market in Chiang Mai makes up for lost time, with prices having increased at a rate of 10-20% per annum every year since 2010.
Chiang Mai has seen a tremendous amount of investment in infrastructure over the past decade and now boasts one of the largest numbers of modern shopping malls outside Bangkok, making it a shopper’s paradise for tourists and locals alike. The city is also home to over 100,000 students at any one time, attending one of the ten universities in the city. This means there is a booming rental market providing accommodation to those studying in the city. The parents of many students studying in the city are also buying condos for their children, which is another element that is leading to constantly growing prices in the area.There is also strong rental demand at the upper end of the property market as Chiang Mai is one of the largest industrial centres in Thailand due to its close proximity to neighboring countries. Unemployment in the city is less than 1%. Many of the manufacturing plants in the area have foreign managers who are in constant need of high-quality housing options.
The large amount of investment in Chiang Mai is not likely to end any time soon. Planned over the next few years are a THB 100 million expansion to the city’s airport, a high-speed railway link which will pass through the city connecting Bangkok to China, plus a new motorway link to Chiang Rai. This new route will connect the city to the R3A highway connecting Southern China, Laos, Myanmar and Thailand.
Chiang Mai is well-positioned to become a major business centre upon the formation of the ASEAN Economic Community, where the city will serve as a major gateway for neighbouring countries. It is easy to reach Chiang Mai easily and cheaply by air, as many budget airlines fly to the city, including Nok Air, AirAsia and Thai Smile which offer domestic flights inside Thailand, with other international carriers servicing the city’s airport, including Dragonair from Hong Kong and China Eastern from China.
The boom on the Chiang Mai property market started at the end of 2011 following the flooding in Bangkok. This led to middle class Thai buyers to start looking outside the capital for second home locations as possible ‘bolt holes’ in case of a recurrence of this situation. More recently, there has been strong interest in Chiang Mai real estate from international buyers, especially buyers from mainland China. Chinese buyers started taking a strong interest in the city after being the location of the smash hit movie, Lost in Thailand, which was the most popular movie in China during 2012. In 2013, the number of Chinese tourists visiting the city increased exponentially and, upon discovering what an excellent investment buying property in Chiang Mai, many Chinese visitors started investing here. In total, Chiang Mai received 6.5 million visitors in 2013, making the city the fourth most popular city in Thailand based upon tourist numbers.
The net result of all this interest is that Chiang Mai is now one of the fastest-moving real estate markets in Thailand, if not the entire world.
So whether you are looking for a holiday or second home in a peaceful, green location – an ideal spot to retire to, or simply an excellent investment opportunity that offers both exceptionally high rental incomes and capital appreciation, Chiang Mai is a location which is going to be very hard to beat.