As Chinese buyers snap up Chiang Mai properties, Thais fear for future
Visitors who walk through a new housing development in Hang Dong, a district of Chiang Mai, might think they’ve stumbled into a slice of China because Chinese letters dominate storefront signs.
This isn’t isolated to Hang Dong. Across Chiang Mai, Thailand’s northern cultural capital, Chinese investment is rapidly reshaping entire neighborhoods – and raising alarm about the city’s future identity and economic independence.
“If Chinese investors seriously enter the dormitory business and buy up properties to rent at higher prices exclusively to Chinese tenants, people living paycheck to paycheck who rent cheap accommodations will definitely struggle,” Naret Puntasrivichai, 43, who runs a monthly apartment rental business in Hang Dong, told BenarNews.
His concerns aren’t unfounded.
Over the past decade, buyers from mainland China have snapped up more than 1,000 housing units in Chiang Mai, with investments totaling between 3 billion and 5 billion baht (U.S. $86.1 million and $143.5 million), according to the Chiang Mai Real Estate Association.
These properties, with pricetags starting at 3 million baht ($86,133) per unit, have spread across Chiang Mai’s three major districts – Hang Dong, San Kamphaeng and San Sai.
In Hang Dong district alone, one Chinese-backed project spent 350 million baht ($10 million) on only four acres of land – a level of investment that dwarfs local developers’ capabilities, Prachachat Business, a local newspaper, reported in early 2023.
The Chiang Mai Provincial Office reported that the city has a population of about 1.62 million Thai nationals, 7,190 Chinese and about 150,000 people from other nationalities.
In addition to the 7,190 residents, many other Chinese take advantage of tourist visas allowing them to stay in Thailand for up to 60 days per visit. In Chiang Mai, it is common for Chinese nationals to use this route to reside and conduct business, according to authorities.
In 2023, Chinese nationals were the largest group of tourists – about 200,000 – traveling to Chiang Mai.
“Chinese investors are transforming Chiang Mai from a tourist destination into their second home,” said Danaitun Pongpatcharatrontep who heads Chiang Mai University’s China Intelligence Center.
“They’re planning businesses in tourism and second-home construction, bringing their children to study here and establishing long-term residences for elderly Chinese. Investment comes both through pure Chinese companies and joint ventures with Thais,” he told BenarNews.
Europeans, Americans and Middle Easterners dominated foreign property purchases in Thailand before the COVID-19 pandemic forced travel restrictions.
Today, Chinese buyers outstrip not just other foreigners but even Thai nationals in the local property market, according to the Chiang Mai Real Estate Association 2024 report.
Property prices in Chiang Mai can be several times lower than in China and budget airlines offer direct flights from major Chinese cities, cutting travel times to two to three hours. For China’s burgeoning middle class, Chiang Mai represents an affordable slice of paradise.
In major cities Beijing and Shanghai, housing prices can average $6,800 to $8,400 per square meter, meaning a 1,200 square-foot (110 square-meter) home could cost $740,000 or more – compared to $80,000 to $180,000 in Chiang Mai.
A 2023 survey by private education company New Oriental found many Chinese families choose Thailand to educate their children, where tuition and cost of living are lower than in Singapore and Japan.
Local losses
Thai law restricts foreign condominium ownership to 49% of total units and bars foreigners from owning land or houses. Yet Chinese investors have found creative ways around these restrictions, often using Thai nominees to hold their businesses.
“These practices not only circumvent the law but could affect the country’s economic system and security in the long term,” said Naret, who rents apartments in Hang Dong. “Chinese investors often operate through informal channels, avoiding official registration while maintaining significant control over properties.”
Local real estate professionals have experienced the change, according to agent Hathairat Polnirun, 38.
“The Chinese real estate system differs greatly from Thailand’s,” she told BenarNews. “In Thailand, sellers pay commissions of 3% to 5%, while in the Chinese system, buyers pay 10% or more, making it impossible for Thai agents to compete when selling to Chinese clients.”
This occurs when buyers, sellers and brokers negotiate additional terms beyond those stipulated by law, she said.
“Recently, Chinese operators have begun establishing their own real estate companies directly, though often using Thai names as cover,” Hathairat said. “If large Chinese real estate companies with substantial capital enter this market, small agencies – both Thai and Chinese – won’t survive.”
In September, a small survey by a local think-tank, The Glocal, reported on concerns among a group of Thai residents.
Of the 30 respondents between the ages of 19 and 62, 60% said Chinese investment significantly impacted local businesses. The real estate sector topped concerns at 40%, followed by tourism (20%) and retail (16.7%). Notably, 17 supported increased regulation of Chinese investment.
In neighborhoods with high Chinese concentration, cultural friction is becoming more apparent.
“Their behavior creates discomfort for Chiang Mai and Thai people, who have a culture of politeness, humility, and mutual respect,” Naret said, citing issues from loud conversations to traffic law violations to disregard for customs.
Stricter control
A legal analyst has advocated for comprehensive oversight.
Tossapon Tassanapan, an associated professor at Chiang Mai University’s Faculty of Law, called for a thorough investigation of business practices.
“We must examine all aspects, from entry permits to financial transactions,” he said. “While general laws don’t specifically target Chinese investment, as we must treat all foreigners equally, we need to investigate whether their activities fall into gray areas, whether officials are complicit and whether there are connections to money laundering or other criminal activities.”
The solution, Tossapon said, involves rigorous enforcement of existing laws.
“We need to check everything – from tourist visas being used for business purposes to tax payments and financial trails. If these businesses can operate, it likely indicates either official complicity or negligence.”
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