Top 5 Asian Property Markets for Chinese LGBT Home Buyers Revealed
Based on a new study by China property portal Juwai.com, international Chinese property buyers are split by lifestyle when buying homes abroad. As Chinese international property buyers become more numerous and sophisticated, they are changing the way they evaluate and purchase overseas real estate.
In past years, Chinese property buyers often followed well-trodden paths to predictable gateway cities and even neighborhoods. But, today, buying behavior is splintering around criteria like life stage, personal values, and motivation. Niche groups of buyers are establishing their own preferences when it comes to international property investment, second homes, and immigration.
International property marketers who wish to successfully navigate this changing landscape will need to segment the market and target their marketing efforts appropriately.
Investors who identify as lesbian, gay, bisexual, or transgender ("LGBT") make up a particularly important, prosperous, and rapidly growing niche group.Size of the Market
China's 90 million LGBT consumers make up the world's third-largest "pink economy," together with Europe and the United States.
The Chinese LGBT social app BlueD is has 40 million registered users, more than the 30 million boasted by international phenomenon Grindr.
LGBT Chinese have huge spending power. Their aggregate annual purchasing power was $938 billion in 2017, more than triple the $300 billion of 2015. That makes the spending power of China's LGBT community the third-largest and fastest growing in the world.
By comparison, the spending power of the United State's LGBT community rose from $933 billion to $965 billion during the same three-years.
Surveys show that the average monthly income of LGBT Chinese is five times larger than the national average. Their advantage in disposable income may be even greater, because they do not have children.
Higher incomes and disposable incomes also lead over time to higher levels of wealth. The Chinese LGBT population is believed to possess household wealth worth $1.5 trillion. That is more than their counterparts in every other country in the world, bar the United States.
Despite the size and wealth of this huge minority, it is often overlooked because of their lack of visibility in Chinese society. They are almost completely ignored by property marketers in popular investment destinations. But, Juwai.com believes the time is coming when marketing efforts tailored to this demographic become necessary for property marketers hoping to obtain a share of their $1.5 trillion in savings.Buying Motivations
Despite their spending power, LGBT individuals face difficulties in their daily life in China. Homosexuality was officially classified as a mental health disorder in China as late as 2001. More than half of Mainland Chinese gays report social prejudice and unfair treatment in China. Fifty-eight percent report that their family's attitudes towards their sexual orientation is one of "complete rejection," and only 5 percent feel comfortable enough to live "out" and publicly reveal their sexual preference.
A respected university study estimates that 90 percent of Chinese gay men have engaged in sham marriages to satisfy familial and societal pressure.
The case of a man in Henan province is an example of the pressures LGBT Chinese can face. After revealing that he was gay, the man's family committed him to a "conversion therapy" program which involved 19 days of beatings and being force-fed drugs.
Overseas, however, many feel free to openly express their identities and their affections and live openly with the partner of their choice. Heeseon Xu and Jesson Liu of Chongqing are an example. The two men feel repressed in their hometown. They told a journalist they are saving to buy a one-bedroom apartment in Thailand, where they can settle down and live openly.Unique Characteristics
LGBT international property buyers invest differently than other Chinese for two primary reasons.
LGBT Chinese property buyers are not driven by the same needs as straight families. They are less likely to have children, so buying a home for a son or daughter to live in while studying at a foreign university is seldom an important goal for them.
This is a significant, given that education is a primary motivation for as many as three quarters of Chinese buyers in some popular first-world destination. LGBT buyers are more likely to be buying a residence for their own use as a vacation home -- whether it's a condo in a sprawling beach-side development in Phuket or a river-side high-rise in Ho Chi Minh City.
Second, there is a strong correlation between locations that Chinese visit as tourists and places where they purchase property, whether for investment, immigration, or a second home. Inasmuch as LGBT Chinese are more likely to travel to gay-friendly or tolerant destinations, they are also more likely to acquire property there. They want to own property in a place they can enjoy visiting or living in.Top Southeast Asian Destinations
Southeast Asia contains five of the globe's top destinations for Chinese LGBT international property buyers. Three factors drive this buyer interest: tolerance, proximity, and affordability.
Southeast Asia is the location of a number of cities that, for cultural reasons, display tolerant attitudes towards LBGT individuals. Bangkok, Phnom Penh, Manila, Phuket, and Ho Chi Minh City are all well known as tolerant or even welcoming to LBGT travelers and investors. This open-mindedness is grounded in local history, but also stems from self-interest and a desire for beneficial international investment in any form.
The second reason Southeast Asia accounts for more than half of the top destinations for LBGT Chinese international property buyers is its relative accessibility and affordability. Geographic proximity, significantly lower initial purchase prices, and lower monthly costs put these markets within the reach of larger numbers of buyers.
By contrast, in both Mainland China and in other traditional investment markets such as Hong Kong, Singapore, and Sydney, high prices, fees, and restrictions, are making real estate investment more difficult.1. Bangkok
Thailand is perhaps the most tolerant country in Asia, and Bangkok is known as Asia's gay capital.
Bangkok is viewed as a gay friendly haven for Chinese tourists and property buyers. Same sex sexual activity is legal in Thailand. Buddhist monks often officiate over same sex marriages. Gay-oriented nightspots cater to Chinese tourists. Nearly a dozen travel companies offer gay-themed trips to Thailand. And local bar owners report they have added Chinese songs to their playlists.
At $4,500 per square meter, new luxury condominium apartments in Bangkok sell for one-sixth the price of similar homes in Hong Kong. Premium buyers can obtain larger homes, more central locations, and more premium fixtures in Bangkok than in Hong Kong or many other Asian and world cities.
Developers offer services such as children's play areas, gardens, fitness centers, and chauffeured Bentley limousines for residents' use. Thai developer Sansiri reports that Chinese buyers make up more than 80 percent of its foreign customers.
For buyers in lower price brackets, Bangkok also offers new affordable luxury condominiums starting the $130,000s. That is among the lowest in any major city popular with buyers from Mainland China.
Despite Thailand's languishing economy, Bangkok property looks like an appealing investment to LBGT Chinese buyers. Bangkok land prices have climbed 1000% over the past 30 years, and prices for central condominiums have doubled in the last five years.
Forty-five percent of our LGBT Chinese buyer inquiries in Bangkok are for the purchaser's own use and 13 percent are for holiday use, according to Juwai.com consumer surveys.
Chinese demand for property in Bangkok is growing rapidly, especially among LGBT buyers. In the first half of 2018, Chinese property buyers had already made more inquiries for Bangkok real estate than in all of 2017.2. Phuket
Like Bangkok, the Thai city of Phuket is an appealing market for Chinese LGBT buyers seeking to fulfill both lifestyle and investment goals.
Phuket is one of the most popular beach vacation destinations in Asia for LGBT tourists. It features dozens of LGBT-oriented venues, especially in the Patong area. Each April, thousands come for Phuket's week-long pride festival.
LGBT buyers most commonly purchase new properties with rental guarantees provided by developers, or short-term stay rentals they can rent out or --while visiting Phuket-- occupy. In smaller numbers, others come to live full-time.
"I have a lot of friends who don't feel safe in China and feel they need to hide. In Thailand they don't have to worry," said Ji Chengfeng, a 37-year-old entrepreneur from Beijing, who was visiting Phuket on one of his frequent holidays in the kingdom.
In the wake of the Phuket boating disaster of 5 July 2018 --in which 47 mostly Chinese tourists died-- buying enquiries dropped to 17% of the long-term average, but indications are that this fall will be temporary. Even after the decrease, inquiries for Phuket property in mid-2018 were at nearly twice the level of the same period in 2017.3. Manila
The LGBT lifestyle is tolerated in Manila. The Philippines was home to Asia's first gay pride parade in 1994, and today the city boasts a vibrant gay nightlife and advocacy community.
Chinese investors of all sorts feel reassured about buying in the Philippines due to Rodrigo Duterte's overt courting of their nation on issues both political and economic. Growth in the Manila market has been driven by the thriving business process outsourcing industry, which has also driven GDP growth. In the first quarter of 2018, annualized GDP grew at a rate of 6.8%, compared to 6.7% in 2017.
Prime residential prices in Manila have risen in each of the past three years, and rents have grown by 5% to 10% per annum.
Starting prices are low by Chinese standards. A one-bedroom apartment listed on Juwai.com in Quezon City has a suggested starting price of about $62,000. LGBT interest in Manila property is high, and overall Chinese buying inquiries were up 122 percent in the first quarter of 2018, compared to the prior quarter.4. Phnom Penh
Cambodian culture is especially tolerant, and gay Chinese investors and expats in Phnom Penh consider it a sanctuary. Considerably less expensive or developed than Bangkok or Phuket, the city nonetheless offers a robust LGBT-oriented nightlife and hospitality industry. Phnom Penh is appealing both to visit and to live.
When it comes to real estate investment, Phnom Penh offers comparatively low property prices, strong economic growth, and a Chinese-oriented property industry in which nearly a dozen Chinese property developers are building or planning projects and most property showrooms have Mandarin-speaking staff.
Unlike nearby Thailand (where foreign buyers are limited to just 50 percent of any apartment building), foreigners may own the majority of units in a building. Because Cambodia is a key and eager participant in the Belt and Road Initiative, Chinese investors also reckon that investment in the country is viewed benignly by authorities in Beijing.
There are risks, however, including looming possible oversupply of new condo units and a thin rental market for the high-end condos that are so appealing to many Chinese buyers. Industry sources report that the Cambodian capital has 8,942 luxury apartments today, will have 22,828 by the end of 2018, and about 30,000 by 2020. While inexpensive by global standards, these properties are well out of the reach of most Cambodians.
Chinese buyer demand is up 19% in the first half of 2018, compared to the prior half. Buyers are drawn to luxurious developments such as the Bridge, which offer rooftop pools, integrated gymnasium, reading lounge, sauna, playground, barbecue area, and an outdoor dining area at bargain prices by global standards. One-bedroom, pre-construction or off-the-plan apartments at the Bridge start at $132,000.5. Ho Chi Minh City
While Vietnam has recognized same sex marriages since 2015, the society's conservative nature makes it unusual for most local gays to come out. For LBGT Chinese and other visitors and expats, however, the country is one of the most tolerant in Asia. No city exemplifies this more than Ho Chi Minh, which many consider one of the most progressive cities in Southeast Asia.
Chinese LBGT buyers believe investment prospects in Ho Chi Minh City are good. Property investment does not seem to be affected by recent protests against Chinese influence over proposed economic zones.
Yields can be 6% to 8%. Because of a new subway and other investments, property marketers comparing the city to Shanghai before its wave of infrastructure construction and urbanization wave claim that tremendous gains in value or likely over the next decade.
Buyers from Greater China make up about 25 percent of all foreign buyers, and foreigners can acquire up to 30% of new condominium projects. Premium residences in the central city are priced at about half the value of equivalent units in Bangkok, and less than 10% of the cost of similar homes in Hong Kong. More affordably priced units can begin at less than $150,000.
Juwai.com data reveals that Ho Chi Minh City receives less investment than most of the others on this list, but demand has been growing since 2016. In the first half of 2018, Chinese buyers made 68% more buying inquiries than in the prior half.
A typical unit in Ho Chi Minh city is a one-bedroom, one-bath apartment in a new, luxury riverfront project for as little as $250,000.