Choice for rigid demander investing in real estate outside of China: Thailand or Malaysia?

Abstract

Many Chinese have chosen to invest in Southeast Asian real estate in recent years. The term ‘rigid demander’ is used to refer to a subset of these enormous overseas real estate investment organizations. These three types of individuals consist of Chinese students, homosexuals, and retirees. This research uses the Analytical Hierarchy Process (AHP) to compare the political, economic, policy, market, and social environment of China’s real estate investments in Thailand and Malaysia from the perspectives of the aforementioned three types of individuals. This research’s data selection is based on the pre-COVID-19 normal situation (2018-2019). The research findings indicate that 1) Malaysia’s real estate investment environment is marginally superior to Thailand, but 2) Thailand’s market and social environments are more advantageous than Malaysia’s. For the three types mentioned in this research, the market and social environment have a more alluring effect. Therefore, the Thai government can increase its efforts in terms of the market, social, and policy environment to attract and serve Chinese investors, including these three types of Chinese, and to promote the growth and prosperity of the Thai real estate market.

Keywords:

• Chinese property investors
• rigid demander
• Thailand
• Malaysia

Subjects:

• Asian Studies
• Cultural Studies
• Economics

Reviewing Editor:

• Lincoln Geraghty , School of Media and Performing Arts, University of Portsmouth, Portsmouth, UK

1. Introduction

According to the World Investment Report (WIR) (UNCTAD, 2023), China’s foreign direct investment (FDI) ranks second globally, behind the United States. China started its foreign investment endeavors in the year 2003. From 2003 to 2007, China made a total investment of RMB 6.5 billion ($1.07 billion) in the overseas real estate sector. The period from 2007 to 2014 saw a valuation of $16.5 billion. It intends to allocate funds towards the development of office and hotel developments. In the year 2016, China surpassed Singapore as the leading nation in property investment within the Asian region. Simultaneously, the encouragement of China’s influence on the Association of Southeast Asian Nations (ASEAN) resulted in an increased influx of exports into substantial markets and altered the patterns of trade among the member nations (Devadason, 2011).

The Chinese government first implemented the ‘Going Global Policy’ approach, often known as the ‘Stepping Out’ policy, with the objective of facilitating the expansion of Chinese enterprises’ investments abroad. The Going Global Policy was included into the 10^th 5-year National Economic and Social Development Plan (2001-2005) and subsequently extended into the 11th iteration (2006-2010). At the global scale, China’s manufacturing sectors, including textiles and electronic equipment, have seen a surplus in output compared to domestic demand.

China, under the supervision of President Xi Jinping, initiated the 21^st Century Silk Road policy, dubbed ‘One Belt One Road’ and subsequently renamed ‘Belt and Road Initiative (BRI)’ is a proactive approach. To promote connections and trade routes in the region. It strengthens the position of Chinese entrepreneurs on the global stage and access to China’s global markets. Through continuous foreign investment support measures (Thailand Economic Projection, 2018, p.82), the global power center will shift to Asia in the 21^st century, with China’s real estate business accounting for 2.5% of the market in 2017. In Malaysia, Singapore, and Laos, the real estate industry accounted for 3.1% of the economy in 2018, totaling $31.27 billion. A report from the Chinese Ministry of Commerce or MOC (2019) indicates that in the first three quarters of 2019, Chinese enterprises increased their total new investments in Malaysia, Singapore, Laos, and Thailand. The cost of ‘The Silk Road Project of the 21^st Century (BRI)’ was $10,004,000,000 represented a total of 12.4% of all foreign investments.

Since 2010, China’s economic development has slowed, and its economic growth rate has continued to decline. Similarly, the pressure to devalue the Chinese Renminbi (RMB) continues. Since the exchange rate reform in August 2015, the U.S. dollar has appreciated against the RMB, while the RMB has continued to depreciate. Under the conditions of low currency devaluation and inflation, the Chinese government has also implemented relatively austere policies to prevent excessive capital injection into the real estate industry, which would increase the risk of a large number of industrial bubbles (Yong, 2018). In conjunction with the promotion of the ‘One Belt, One Road’ strategy, an increasing number of Chinese real estate investors have discovered new opportunities by ‘Going Out.’ Among them, Southeast Asian real estate investment has become their top choice. China’s real estate investments have favored Southeast Asia due to its geographical advantages. Compared to lengthy flights to Europe, the United States, and Australia, it is simpler for Chinese to travel to Southeast Asia, where the flight time is between three and five hours. Southeast Asia’s property costs are generally lower than those in Europe, the United States, Australia, and China’s first-tier cities, making the region more accessible. In addition, the majority of Southeast Asian regions recognize the Chinese language to a greater degree than English-speaking countries, giving Chinese people more options. In addition, the analysis of China’s investment in ASEAN countries in the third quarter of 2018 (CEIC and Kasikorn Research Center, 2018) reveals that the proportion of China’s direct investment in ASEAN countries has increased annually. In 2015, 2016, and 2017, these two figures increased by 4.5% and 11%, respectively, reflecting the significance of the region to China’s economic development strategy in the future. This could be a turning point for China’s future direct investment policy.

According to U.S. News & World Report, Thailand is the finest country in which to establish a business in 2020, followed by Malaysia. Nevertheless, according to the Doing Business 2020 report, Malaysia and Thailand position second and third, respectively, in Ease of Doing Business among ASEAN nations. Moreover, a survey conducted by ju-wai.com, one of China’s leading real estate websites, reveals that Thailand and Malaysia are the primary target countries for Chinese real estate investors. First and sixth place, respectively. In 2018, Chinese investors invested $1.25 billion in Thailand’s real estate market. However, according to a report by Real Capital Analytics, investments in senior housing and hospitals have increased by 22% over the past three years, while investments in housing and offices have increased by 17% and 10%, respectively. After the Covid-19 incident, the real estate investment landscape has shifted. Green buildings, intelligent buildings, logistics buildings, and senior housing, according to Savills, one of the world’s foremost property consultants. According to the 2019 Annual Global Retirement Index, Malaysia and Thailand are two of the world’s 10 most retirement-friendly nations. In addition, the policies of both nations must be attractive enough to encourage elderly expatriates to remain in the country.

In conclusion, the following are the primary factors that attract Chinese real estate investors to Thailand and Malaysia: Thailand and Malaysia have responded positively to 1) the pressure of China’s domestic real estate market and government policies, as well as the guidance of the ‘Belt and Road’ policy; 2) With the enhancement of exchanges and cooperation between China, Thailand, and Malaysia, each country intends to expand mutual benefit and attain common development and prosperity on a more balanced basis. 3) Regarding geographical location and policy support, Chinese real estate investors favor Thailand and Malaysia as investment destinations.

2. The analytic hierarchy process (AHP)

Stobaugh (1969) presented ‘grading scale scoring method’ in ‘How to Analyze the Foreign Investment Climate.’ This technique and its successors subjectively evaluate the invested country’s overall position. Because the indicators employed are largely unique and policy-related indicators are more relevant, it hinders scientific and objective appraisal of the investing country’s investment and environmental circumstances. The flexible and efficient AHP technique (Saaty, 1980, 1991, 1994, 1996) may turn qualitative difficulties into quantitative analytical problems for multi-criteria decision-making. Its hallmarks include combining qualitative decision-making with quantitative analysis in complicated issues and making subjective structural assessments based on empirical truths. This method was used to investigate decision-making in several sectors, including real estate investing. Safian & Nawawi (2011) examined the development of AHP as a real estate decision-making tool. This approach works, although it needs constant tweaking, and the writer suggests improvements. The author is hopeful despite the fact that few Malaysian real estate sectors adopt this strategy. AHP was used by Thaker & Sakaran (2016) to study Malaysian homebuyers. Phencharoenkit & Chieng (2019) analyzed Thai real estate investment choices using FAHP. Investment environment (26%) is most significant, followed by political stability (22%), legal standards (19%), return on investment (18%), and managerial cost (15%). The Standing Army (8.58%) dominates. Fair Arbitration (4.18%) is least important. Thus, smart advice The Analytic Hierarchy Process became popular in China around 1982. Many academics use it to build thorough assessment weights and various decision analyses. Comparative study on the investment environment compares the investment conditions of Chinese provinces and localities and Chinese investors in two or more countries. No research approach is restricted in this study. Lan & Deng (2016) used the analytic hierarchy process to analyze the investment environments of Nanjing, Wuhan, and Chengdu in China, selecting 24 indicators, including the main indicators of economy, finance, infrastructure, consumption, nature, and society, the total amount of CDP, the evaluation index system, and Li et al. (2016) used the Delphi Technique to develop an evaluation system for the ‘Belt and Road’ countries’ investment environments, assessing socioeconomic development and transportation infrastructure construction. Assess the investment climate and provide solutions. The authors found few research publications comparing Thailand and Malaysia’s real estate investment environments from these three Chinese real estate investor types.

3. Chinese students, homosexuals and retirees’ rigid demand

This research refers to some subsets of China’s enormous foreign real estate investment groups as ‘rigid demander.’ The term ‘rigid demand’ refers to the population of individuals who prefer to own real estate in a certain nation in order to maintain their standard of living while living abroad. Moreover, Wang (2018) mention that the concept of rigid demand (gangxu) refers to the notion that individuals must purchase a residence regardless of price. The following three types of individuals are considered to be part that is discussed in this research:

3.1. Chinese students

This type consists of students and their families who desire education at all levels, including: (1) One spouse is Thai, and the child was born in Thailand and received Thai education; (2) Parents who were born in Thailand and received Thai education; (3) All of them are Chinese, and their children attend international institutions in Thailand to pursue an undergraduate or graduate degree. These three types of international students all aspire to obtain an education in Thailand or use a certain level of education in Thailand as a stepping stone to continue their education in prestigious universities in developed nations. According to the Ministry of Education’s study abroad policy research division (2012), Thailand is one of the most popular countries for Chinese students to study abroad. Moreover, China’s Ministry of Education (MOE) has accredited and announced 156 Thai universities. The official website of the Ministry of Higher Education, Science, Research, and Innovation of Thailand provides statistical information regarding the number of international students for the previous decade (2012–2022). Within this timeframe, the number of students pursuing a degree amounted to 225,951. Among them, 106,869 were Chinese students, making up 46.72 percent of the overall student population. Above all, the overall number of international students in 2022 was 30,837, of which 18,771 were Chinese nationals (Ministry of Higher Education Science Research and Innovation, 2023). Consequently, it evidently pertains to the real estate investment. The government can increase the attractiveness of policies for the residence of spouses and long-term visas. Currently, Thailand lacks a policy that would support this objective. For example, lengthen the visa period and support the employment policies for qualified foreigners. The latter also makes children studying abroad the primary driver of the current overseas real estate growth, and tends to adopt ‘Buy for Uni’ (Huang), in which students’ study abroad purchase real estate and use the appreciation to offset the cost of studying abroad. In this regard, Malaysia has actively implemented policies to attract international students to study abroad, such as lowering entry requirements, easing visa requirements, allowing international students to work, offering scholarships, and teaching English in private schools. Malaysia’s measures to expand the education of international pupils are highly effective, particularly for students from neighboring nations. On the one hand, it can save a substantial amount of money, and on the other, it can circumvent the limitation of applying directly to European and American universities.

Thailand is a popular tourist destination, and there are numerous international personnel exchanges, particularly in Bangkok, the Thai capital, which has a high level of internationalization. The government should capitalize on the advantages of its tourism industry, vigorously promote the country’s outstanding traditional culture, and promote the culturally advantageous international development of higher education. Such as Thailand’s Buddhist culture. On the other hand, geographical advantages must be utilized to attract educational resources to outlying areas. The internationalization of higher education is facilitated by geographical proximity, cultural similarity, and identity.

3.2. Chinese homosexuals

This type, also known as the LGBT, consists of lesbian, gay, bisexual, and transgender individuals. The estimated LGBT population in China PRC is 74.7 million (LGBT Capital, 2020). Frost China (2020) reveals that the revenues and expenditures of Chinese homosexuals are higher than those of Chinese pansexual, indicating greater purchasing power and real estate investment. Bangkok and Phuket are the top two destinations for LGBT Chinese, according to Juwai.com (Bangkok Post, 2018). Such individuals continue to face exclusion and discrimination in China. Few people are prepared to disclose their unique identity to the public due to Chinese traditional culture and the tolerance of actual society. Only 5% of individuals disclose their identity to society, according to the report (United Nations Development Program, 2016). The plight of this type of individual results from prejudice and maltreatment of their physical and mental health by family and society. The plight of LGBT individuals encompasses numerous aspects. Discrimination causes them to lose their employment, diminishes their career prospects, and reduces their potential for learning. Therefore, they actively pursue self-emancipation and social tolerance and understanding of pluralistic identity.

Based on LGBT Capital figures, the global LGBT population is estimated to be 496 million, with 4.5 million LGBT individuals residing in Thailand (The Nation, 2019), and Thai society is known as the ‘Homosexual Paradise’ (Veilleux, 2021) due to its exceptionally high tolerance for LGBT individuals. A survey report on Chinese sexual minorities revealed that the majority of respondents were young adults born in the 1980s and 1990s and that the majority of them resided in eastern and central provinces and cities. Education attainment is comparatively high. More than fifty percent of the population holds a bachelor’s degree or higher, is employed in a variety of professions, and has a spiritual life that is diverse. About one-fifth of the population is religious, with Buddhism being the predominant religion. Such individuals are also prospective Thai property investors. They are youthful, highly educated, avant-garde, enjoy superior living conditions, and possess particular work skills. They hope to purchase real estate in Thailand in order to obtain the opportunity to live and work in Thailand, and they hope to integrate into Thai society in order to acquire identity and find a companion in order to eradicate the invisible humiliation in China.

3.3. Chinese retirees

This type consists of geriatric, age-restricted real estate investors. They can spend their senior years abroad if they purchase property abroad. With the emergence of an elderly population, the government is compelled to reduce government expenditures, including by prolonging the retirement age, due to rising pension costs. Nonetheless, because pensions are insufficient or scarcely able to cover the high cost of living and medical care, some elderly individuals who do not wish to continue working after retirement wish to move to other countries in order to provide for themselves. Southeast Asian nations have reduced costs of living, better healthcare and natural environments, etc. This has become the top retirement destination for foreign retirees. In addition, Southeast Asian nations have extended olive branches to foreign retirees and implemented a series of policies and measures, including the issuance of retirement visas, to entice them to invest in real estate. As long as they satisfy the age and other requirements, senior citizens from outside the region are permitted to buy in Southeast Asian countries.

The Japanese retirees are currently experiencing greater success (Chen, 2019). According to a survey, Malaysia is the country where Japanese seniors are most likely to choose transnational geriatric care year-round due to alleviating policy conditions and other factors, while Thailand is in second place. Thailand and Malaysia are more competitive than other Southeast Asian nations in instituting transnational geriatric care for international elders. Both countries have a very comprehensive medical system, but the cost is very costly. The quality of medical care in Thailand is comparable to that of Western developed nations. Every year, tens of millions of expatriate’s travels to Thailand to receive medical treatment, making travel medical care a popular service. In addition, the climate is conducive to the treatment of a variety of chronic diseases (Chen, 2019). The harmonious and inclusive social environment is also compatible with the mentality of senior citizens. Malaysia began earlier and has more seasoned experience in luring foreigners to assist the elderly. As early as 1996, he actively promoted the ‘Silver Hair’ project, which later became the ‘My Second Home’ project. Beneficiaries of this program will obtain a renewable visa for life every ten years. Thailand did not implement the retirement visa system until 2002. Applicants must be at least 50 years old, have a minimum annual income of 800,000 baht, no criminal record, and a physical health certificate.

Compared to Japan, China’s rate of population aging is still relatively modest. Nonetheless, as the rate of aging in China accelerates, an increasing number of elderly Chinese are looking to purchase property in Thailand. Due to China’s emphasis on competition and diligence, its youthful population’s preoccupation with work and career, and their desire to enjoy their golden years, Chinese people find Thailand’s pension advantages to be very appealing. Chinese senior citizens have abandoned the traditional concept of relocating land and relocating due to the ease of transportation. Compared to the difficulty of locating a suitable home for the elderly in domestic cities, real estate investments in Thailand have become an attractive option. In addition, since foreigners who purchase Thai homes have inheritance rights, foreigners who acquire land as lawful successors can enjoy land ownership with permission from the Minister of the Interior (Zhao, 2019). Increasingly affluent children purchase real estate for their parents in Thailand so that they can take advantage of Thai medical and health services, and then they can inherit the property in accordance with Thai law.

4. Comparative analysis of the investment environments in Thailand and Malaysia for three types of real estate investors with rigid demand

4.1. Data and methodology

The Analytic Hierarchy Process (AHP) helps decision-makers make complicated system decisions that are hard to quantify. This technique examines the essence, important aspects, and underlying linkages of complex decision-making situations, making it unique. It formalizes cognitive decision-making, which might have various goals, criteria, or lack of structure, using less quantitative data. Complex circumstances frequently have specific traits that enable simple decision-making. Several real estate investment experts and analysts recommend this technique. This research relies on Lan & Deng (2016). This research largely uses Deng et al. (2012)’s weight calculation methodology for the Analytic Hierarchy Process (AHP).

This research employs AHP to analyze and quantify the Thailand and Malaysia real estate investment environments. Through calculation and data analysis, it is intended to demonstrate that there are similarities and differences between Thailand and Malaysia in the real estate investment environment, thereby making them comparable. First, construct a model of the real estate investment environment evaluation index system. Next, construct a matrix for each level of the index in the model, and assign values to calculate the consistency ratio (CR). Next, conduct the consistency test on the judgment matrix (if CR is less than 0.1, the matrix assignment is reasonable).

4.1.1. Establishment of indicator system

The real estate investment ecosystem is a vast and intricate system. The most essential aspect of evaluating the urban real estate investment environment is to conduct detailed analysis and research on the elements that comprise the real estate investment environment (Zhuang, 2012). However, the real estate investment environment system has too many and extensive components, and it appears somewhat disorganized. Consequently, it is essential to classify numerous constituent elements. This research is classified as belonging to the political, economic, policy, market, and social environment categories. In order to provide a more accurate reflection of the real estate investment climate in Thailand and Malaysia, this research employs the 20 selected indicators in order to assess the situation in these two countries. Prior to COVID-19, we opted for relatively stable and normal data when selecting data by year. This survey derives its data from the following sources:1 Knoema website; 2 Uoolu 2019 Ten Countries on Belt and Road Property Investment Data report; 3 E-House 2020 report on the house price-to-income ratio in 80 cities worldwide; 4 The 2020 Political Risk Map from (Marsh, 2020).

As for the selection of indicators, we refer to relevant research on real estate investment and the experience and judgment of experts and scholars, such as Deng (2017) who, on the basis of defining the relevant concepts of the research object and analyzing the theory of investment environment research, used principal component analysis, entropy weight method, clustering method, and other techniques to study and analyze the comprehensive evaluation of residential real estate. Liu & Chen (2018) evaluated the investment climate of the five Central Asian nations from four perspectives: political, economic, infrastructure, and production factors. On the basis of the data analysis, references and recommendations are provided for China’s direct investment in Central Asian nations against the backdrop of the Silk Road Economic Belt. In this discussion, Table 1 displays the index of each aspect for Thailand and Malaysia in the research. The establishment of the real estate investment environment indicator system in this research is shown in the Figure 1.

Figure 1. The establishment of the real estate investment environment indicator system.

4.1.2. Construction of judgement scales

Construction of judgement scales.

The judgement scale is a comparison of the relative importance of all factors at this level to a factor at the previous level. The elements of the judgment matrix are given by Saaty’s scaling method. The scale according to Saaty’s scaling method as shown in Table 2. (1) $$\left[\begin{array}{cccc}{b}_{11}& b_{12}& \cdots & b_{1n}\\ b_{21}& b_{22}& \cdots & b_{2n}\\ \cdots & \cdots & \cdots & \cdots \\ b_{n1}& b_{n2}& \cdots & b_{\mathit{\text{nn}}}\end{array}\right]$$(1)

If there are B₁, B₂, … B_n, indicators in question a, matrix B is as in formula (1)(1) $$\left[\begin{array}{cccc}{b}_{11}& b_{12}& \cdots & b_{1n}\\ b_{21}& b_{22}& \cdots & b_{2n}\\ \cdots & \cdots & \cdots & \cdots \\ b_{n1}& b_{n2}& \cdots & b_{\mathit{\text{nn}}}\end{array}\right]$$(1) :

Where $b_{\mathit{\text{ij}}}$ represents the comparison between $B_i$ and $B_j$, and $b_{\mathit{\text{ji}}}=1/b_{\mathit{\text{ij}}}$

The calculation steps of judgment matrix are as follows:

1. Normalize each column of the judgment matrix, and the formula is as in formula (2)(2) $$b_{\mathit{\text{ij}}}\text{=}{b}_{\mathit{\text{ij}}}\text{/}[\sum _{\text{k = 1}}^{\mathrm{n}}{b}_{\mathit{\text{kj}}}]$$(2) :

(2) $$b_{\mathit{\text{ij}}}\text{=}{b}_{\mathit{\text{ij}}}\text{/}[\sum _{\text{k = 1}}^{\mathrm{n}}{b}_{\mathit{\text{kj}}}]$$(2)

• The normalized columns are added to obtain $\mathrm{\text{BW}}$.

• Dividing the added vector by N is the weight vector ${\mathrm{W}}_{\mathrm{i}}$.

• Maximum eigenvalue in judgment matrix ${\mathrm{\lambda }}_{\mathrm{\text{max}}}$ as in formula (3)(3) $${\lambda }_{\mathrm{\text{max}}}=\sum _{i=1}^n\left[{\left(\mathit{\text{BW}}\right)}_i/{\mathit{\text{nW}}}_i\right]$$(3) :

(3) $${\lambda }_{\mathrm{\text{max}}}=\sum _{i=1}^n\left[{\left(\mathit{\text{BW}}\right)}_i/{\mathit{\text{nW}}}_i\right]$$(3)

Where ${\left(\mathit{\text{BW}}\right)}_i$ represents the $i$ component of $\mathit{\text{BW}}$

1. 5. The formula of the general consistency index $\mathit{\text{CI}}$ of the judgment matrix is as in formula (4)(4) $$\mathit{\text{CI}}=\frac{{\lambda }_{\mathrm{\text{max}}}-n}{n-1}$$(4) :

(4) $$\mathit{\text{CI}}=\frac{{\lambda }_{\mathrm{\text{max}}}-n}{n-1}$$(4)

• 6. The consistency is judged according to the calculation formula of CR, as in formula (5)(5) $$\mathit{\text{CR}}=\frac{\mathit{\text{CI}}}{\mathit{\text{RI}}}$$(5) :

(5) $$\mathit{\text{CR}}=\frac{\mathit{\text{CI}}}{\mathit{\text{RI}}}$$(5)

RI is the average random consistency index, as displayed in Table 3.

When the calculation result CR < 0.10, it shows that the judgment matrix has satisfactory consistency. Otherwise, the judgment matrix needs to be adjusted until it is satisfactory.

4.2. Results from analysis

4.2.1. Calculation results of real estate investment environment evaluation index judgment matrix

Through the judgment matrix MATLAB software of each level, the weights and other values are calculated, and the consistency test is performed. The calculation results are shown in Tables 4–9.

Table 1. Thailand and Malaysia index of each factor (Knoema, 2019a, 2019b; Uoolu, 2019; Marsh JLT., 2020; E-House, 2020).

Factors	Indicators	Thailand	Malaysia
Political Environment	Country risk index	65	75
	Integrity index	36	51
	Peace index	2.25	1.53
Economic Environment	GDP (10Billion USD)	509.20	336.33
	GDP per capita (USD)	7295	10192
	Employment rate (%)	65.40	61.30
	Unemployment rate (%)	1	4.9
	FDI stock (Billion USD)	2544.16	1689.80
Policy Environment	Exchange rate	0.0307	0.2433
	Inflation rate	0.71	0.7
	Easy business	80.10	81.50
Market Environment	Gross rental yield	5.10	3.70
	Urban housing ownership rate	80.00	46.3
	Per capita living area of commercial housing	21.60	12.00
	City house price to income ratio	27.60	11.00
Social Environment	Population (million)	69.80	32.367
	Land (square kilometers)	510890	328550
	Agriculture land	43.30	26.30
	Tourists (million)	39.917	26.10
	Happiness index	5.99	5.38

The data is from 1 Knoema website; 2 Uoolu 2019 Ten Countries on Belt and Road Property Investment Data report; 3 E-House 2020 report on the house price-to-income ratio in 80 cities worldwide; 4 The 2020 Political Risk Map from Marsh.

Table 2. Scale of relative importance according to saaty’s scaling method (Saaty, 1980)

Intensity of importance	Definition	Explanation
1	Same	Neither of the two alternatives is preferable over the other
3	Weak	One alternative is preferred slightly over the other
5	Clear	One alternative is preferred clearly over the other
7	Strong	One alternative is preferred strongly over the other
9	Very Strong	One alternative is preferred very strongly over the other
2, 4, 6, 8	Compromise	Can be used for graduation between evaluation
Reciprocals of above	If activity $i$ has one of the above nonzero numbers assigned to it when compared with activity $j$, then $j$ has the reciprocal value when compared with $i$	A comparison mandated by choosing the smaller element as the unit to estimate the larger one as a multiple of that unit

Table 3. Random consistency index RI (Saaty, 1980).

Size of matrix	1	2	3	4	5	6	7	8	9	10
Comparative value	0	0	0.52	0.89	1.12	1.26	1.36	1.41	1.46	1.49

Table 4. The evaluation index judgment matrix of real estate investment environment.

	B1	B2	B3	B4	B5	Weight
B1	1	1/3	1/5	1/5	3	0.0862
B2	4	1	3	1/4	5	0.2952
B3	2	1	1	1/3	4	0.1876
B4	3	2	3	1	4	0.3786
B5	1/2	1/5	1/4	1/5	1	0.0525
λmax=5.2833 CI = 0.0708 CR = 0.0632

Table 5. The evaluation index judgment matrix of real estate investment political environment.

	C1	C2	C3	Weight
C1	1	1/5	1	0.1418
C2	5	1	5	0.7088
C3	1/2	1/3	1	0.1495
λmax=3.0546 CI = 0.0273 CR = 0.0525

Table 6. The evaluation index judgment matrix of real estate investment economic environment.

	C4	C5	C6	C7	C8	Weight
C4	1	1	1/3	1/5	1/3	0.0890
C5	1	1	1/3	1	4	0.2159
C6	3	1	1	1/5	2	0.1719
C7	5	1	5	1	4	0.4130
C8	2	1/4	1/2	1/5	1	0.0922
λmax=5.3831 CI = 0.0958 CR = 0.0856

Table 7. Real estate investment policy environmental evaluation index judgment matrix.

	C9	C10	C11	Weight
C9	1	3	5	0.6231
C10	1/2	1	4	0.3002
C11	1/6	1/5	1	0.0786
λmax=3.0819 CI = 0.04 CR = 0.0788

Table 8. The evaluation index judgment matrix of real estate investment market environment.

	C12	C13	C14	C15	Weight
C12	1	5	5	1/5	0.2433
C13	1/4	1	1	1/7	0.0670
C14	1/4	1/2	1	1/6	0.0626
C15	5	6	6	1	0.6272
λmax=4.1786 CI = 0.0610 CR = 0.0669

Table 9. The evaluation index judgment matrix of real estate investment social environment.

	C16	C17	C18	C19	C20	weight
C16	1	1/3	1/3	1/3	1/3	0.0741
C17	3	1	1/3	1/5	1/2	0.1057
C18	2	2	1	1/3	1/3	0.1407
C19	7	5	5	1	5	0.5617
C20	4	1/3	1/3	1/5	1	0.1178
λmax=5.1658. CI = 0.0415    CR = 0.0370

Table 10. Individual index weight.

Individual Index	Weight	Individual Index	Weight
C1	0.0122	C2	0.0611
C3	0.0129	C4	0.0263
C5	0.0637	C6	0.0507
C7	0.1219	C8	0.0272
C9	0.1169	C10	0.0563
C11	0.0147	C12	0.0921
C13	0.0254	C14	0.0237
C15	0.2375	C16	0.0039
C17	0.0055	C18	0.0074
C19	0.0295	C20	0.0062

4.2.2. Individual index weight

The weight of each individual indicator in the whole indicator system is obtained by multiplying the weight of each individual indicator with the weight of the main indicator at the upper level. For example, the individual index weight of ${\mathrm{C}}_1$ is ${\mathrm{\text{WC}}}_1$ multiplied by ${\mathrm{\text{WB}}}_1$, i.e. 0.1418 × 0.0862 = 0.0122. The other indicators are followed by analogy. The individual index weight of this research is shown in Table 10.

4.2.3. Standardized data and weighted result

In order to solve the problem of inconsistent dimensions of initial data, it is necessary to standardize the original data. The processing method is to take the ratio of each data of the same index to the maximum value of the index data as the standard value of this data. The formula is as in formula (6)(6) $$X{\prime }_{\mathit{\text{ij}}}=\frac{X_{\mathit{\text{ij}}}}{X_{\mathit{\text{imax}}}},0\le X_{\mathit{\text{ij}}}\prime \le 1$$(6) : (6) $$X{\prime }_{\mathit{\text{ij}}}=\frac{X_{\mathit{\text{ij}}}}{X_{\mathit{\text{imax}}}},0\le X_{\mathit{\text{ij}}}\prime \le 1$$(6)

For example, for C₁, Thailand is 65 and Malaysia is 75. According to the formula, C₁ Thailand = 65/75 = 0.8667 and C₁ Malaysia = 75/75 = 1. The rest of the data are analogized, as shown in the Table 11.

Table 11. Standardized data and weighted results.

Index	Thailand	Malaysia
C1	0.8667	1
C2	0.7059	1
C3	1	0.68
C4	1	0.6605
C5	0.7158	1
C6	1	0.9373
C7	0.2041	1
C8	1	0.6642
C9	0.1262	1
C10	1	0.9859
C11	0.9828	1
C12	1	0.7255
C13	1	0.5788
C14	1	0.5556
C15	1	0.3986
C16	1	0.4637
C17	1	0.6431
C18	1	0.6074
C19	1	0.6539
C20	1	0.8982
Integrate Score	0.7580	0.7618

Table 12. Total value of the real estate investment environment of the two countries.

Country	Environments					Total Value
	Political	Economic	Policy	Market	Social
Thailand	0.0666	0.1747	0.0855	0.3787	0.0525	0.7580
Malaysia	0.0821	0.2686	0.1871	0.1894	0.0347	0.7618

4.2.4. Conclusion on the real estate investment environment of the two countries

Through figure, it is divided the results into a table, as shown in the table below, as shown in the Table 12:

There are political, economic, policy, market, and social environment differences between the two countries, as demonstrated by the data and analysis. Malaysia is marginally more valuable overall than Thailand. In terms of political, economic, and policy, the real estate investment environment in Malaysia is stronger than in Thailand, while the market and social environment in Thailand are stronger than in Malaysia. So, the market and social environment appear to be more attractive to these three types of Chinese.

Thailand is one of the countries with relatively good economic development in ASEAN, and China and Thailand have close economic, trade and investment relations. Thailand’s real estate has shown a positive trend in recent years, with a basic balance between supply and demand and a steady rise in prices. The sustained growth of Thailand’s economy and the rapid development of tourism have attracted tourists, investors and labor from all over the world and raised the demand side of Thailand’s residents – Holidu’s Workation Index for 2021 reflects Bangkok (1^st), Phuket and Chiangmai (10^th) are the growing popularity of a ‘workation’ – work and vacation. In addition, Thailand has promoted the long-stay visitors has become more prevalent after the establishment of a national committee in cooperation with the Tourism Authority of Thailand and other related government bodies such as the Ministry of Commerce and the Ministry of Foreign Affairs. (Marohabutr, 2022) Therefore, there is a great demand for both resident purchase and rent. According to the data on the rental yield of major cities around the world in the Global Property Guide (2020), Thailand has become one of the preferred high rental yields countries in Southeast Asia. Its gross rental yield (% per annum) reached an average of 5.13%, ranking fourth in Southeast Asian countries, higher than Malaysia, which is also an important factor for many people to choose to invest in real estate in Thailand. By the way, because of the scarcity of land resources, the difficulties of reconstruction, more people and less land, and Juwai.com reveals that the house vacancy rate in Thailand is only about 1.5%, it is inevitable that the property price in Thailand will rise. It’s also worth pointing out that the general laws of Thailand regarding landlords and tenants are largely pro-landlord same as China while Malaysia is opposite.

The total population and population density are closely related to the real estate market. With the gradual expansion of urban population, population factors have an impact on the real estate market from two aspects. On the one hand, the increase of population quantity and population density has led to the development of local commerce, service industry and other industries, leading to a strong demand for the real estate market. From the perspective of economics, if real estate is regarded as a product in the market, land is the most important factor of production of this product. Agricultural land accounts for a high percentage of total land area all the year round, indicating that there is still sufficient commercial land such as real estate in Thailand. The population of tourism can also reflect the impact of pillar industries on the economy. Happiness index can reflect the satisfaction of people in investing countries under certain circumstances, and has a certain effect on attracting real estate investors to invest. The above social environmental factors play a significant role in the living and purchase of these three types in Thailand, especially in terms of the number of tourist population and happiness index.

Because tourism for medical treatment has become a new fashion for many people to travel to Thailand, Thailand’s investment and construction in medical services also needs to be adapted to a large extent to actual needs. Among these three groups, especially the latter two, have higher needs in this regard. Studies have shown that compared with heterosexual elderly groups, sexual minority elderly groups are more likely to have psychological problems such as depression and anxiety (Tinney et al., 2015). In addition, due to the lack of social support for sexual minorities, they are unable to obtain more perfect medical services due to the lack of personalized services and general recognition in medical services.

At the same time, the large capacity of land population can also promote the increase of tourism population to a great extent. The influx of various tourist groups has increased Thailand’s acceptance of different groups and cultural habits, and further expanded its social tolerance, which is more conducive to the long-term life of these three types to a certain extent. Furthermore, happiness index is also a particularly big factor in their choices, and the reasons that can really affect their happiness are complex and multifaceted, such as social values and religious beliefs. These aspects also play an important role for Chinese investors.

According to the data provided by Juwai IQI, the total purchase of Thai apartments by foreigners in 2020 decreased by 34% compared with 2019, but in the first quarter of 2021, the inquiry volume of Chinese buyers for real estate in Thailand increased by 38% compared with a year ago. Furthermore, Georg Chmiel, co-founder and executive chairman of Juwai IQI group, said that in the long run, although Thailand’s real estate market has been severely hit by the epidemic, the demand of Asian buyers still exists. Thailand is the third popular destination for Asian cross-border buyers, and 10.6% of Asian cross-border buyers are willing to buy properties in Thailand and from 2018 to 2020, China was the largest foreign buyer of apartments in Thailand; that means Thailand was the biggest destination for Chinese people to find overseas real estate as investment or residential residence before the epidemic of Covid-19. In whatever way, World Investment Report (UNCTAD, 2021) revealed Asia has been an attractive destination for international investment throughout the epidemic of Covid-19. In the post epidemic era, more and more Chinese investors are aware of the importance of Thailand’s local market and its market radiation capacity. For stable political, mutual trust and considerable investment rights and interests are also important factors to attract Chinese to Thailand for Chinese enterprises, but similar cultural background also plays the important role for Chinese buyers-according to Douglas Dow’s religious difference index, the religious difference between China and Thailand is 8.248. So, in accordance with the social environment advantage in real estate investment Thai government should issue the policies to attract these following Chinese types in post Covid-19.

5. Conclusion

Using the analytic hierarchy process, this research conducts quantitative and qualitative research on the real estate investment environment in Thailand and Malaysia from the perspective of three types of expatriate real estate investors with rigid demand in China. In terms of political, economic, policy, market, and social environment, the research revealed that there are distinctions between the two countries. Overall, the data indicates that Malaysia’s real estate investment environment is marginally superior to Thailand’s, based primarily on data such as political, economic, and policy environment, whereas Thailand has certain advantages in market environment, social environment, and legal environment, and for other factors. The investment judgments of the three special categories mentioned in this research may be influenced more by these two factors. On the basis of domestic political stability and economic development, Thailand must implement additional attraction measures for the three types of investment groups with rigid demand mentioned in the research in order to attract Chinese real estate investors. To attract more investment, the government should also take advantage of its own advantages and proactively enhance the market and social environment. Regarding pro-China policies, for instance, additional research should be conducted. The Thai government recognized the Lunar New Year as a legal holiday in 2021. Prime Minister Srettha Thavisin, who just assumed office in 2023, is a beneficial resource for investigating measures such as Hong Kong Special Administrative Region foreign affairs activities.

Authors’ contributions

Mingwei Huang: writing—review and editing works in Chinese, data analysis. Pawares Funoi: conceptualization, methodology, data analysis, developing original draft preparation, visualization, review and editing.

Acknowledgments

We would like to thank the editor and reviewers of Cogent Arts and Humanities for their suggestions to improve the manuscript. We also thank Walailak University for providing individual research grants (Walailak University Contract No. WU63201) to support this study.

Additional information

Funding

This study was supported by the Walailak University Individual Research Grant.

Notes on contributors

Mingwei Huang

Mingwei Huang is a lecturer of Chinese program, School of Liberal Arts, Walailak University. His area of research focus on Chinese study, linguistics and philology.

Pawares Funoi

Pawares Funoi is a Chinese lecturer at Walailak University’s school of Liberal Arts. Her area of expertise lies in the field of Chinese study, linguistics, Chinese business.