There is little doubt that Pattaya is a city that is undergoing something of a transition and this applies to many different sectors and indeed the property market is no exception. In this article, we will address the current situation with regards to the market, what to expect in the future, and how you can get the most out of property in Pattaya.
Current State of the Market in Pattaya
It would be fair to say that the market is undergoing a transition from a buyer’s market to one of recovery. There are a number of factors that contribute to this, not least that the fundamentals upon which the market is built are unstable by their very nature. The fact that Pattaya is a resort city and a holiday destination along with the majority of expats being of retirement age means that the world economy and international politics have real impact on market trends.
One walk around the city and you will quickly realise that it is an ultra-international market. Almost every nationality is represented in Pattaya such as Chinese, Indians, Middle Eastern, other Asians and of course westerners living side by side in harmony with one another. Pattaya is a city that thrives on passion and as a result, many people act on impulse. This means many people decide to buy or rent on the spur of the moment but equally they choose to sell or dispose of their properties quickly too.
Up until to middle of 2017, the market would have been described as very much a buyer’s market with vast discrepancies between supply and demand with over 30,000 units available for sale. Currency devaluations have also impacted on property prices, for example, the fall of the Rouble from 1 to 0.5 Thai Baht which left many Russians with properties that they simply couldn’t afford but if they sold their property they were effectively doubling their money. Sterling and the Euro also suffered significant drops although this had a lesser effect.
In addition, some political and economic factors reduced demand perhaps with the fall in oil prices leaving the largest impression with many of the working expats in Pattaya earning their living directly or indirectly from the oil industry. As a result, not only was it a buyer’s market but also prices were very favourable for those looking to rent.
By the middle of 2017, the property market had reached the bottom and a noticeable improvement was witnessed. Here at Pattaya Prestige Properties, we noted that we were receiving more inquiries and as a consequence, we were closing more deals. Overall, the quality of the enquiries also improved and the number of fire sales reduced with any hot deal being snapped up very quickly.
What are the reasons for the recovery?
The world economic situation has improved over in recent months and we are aware that this plays a huge role when it comes to real estate purchases. Thailand benefits from this type of situation because the basic fundamentals of the property market remain strong. The lower cost of living, good quality food, picturesque beaches, the tradition of hospitality and the image of a quiet Buddhist country plays a huge role when other parts of the world a blighted by terrorism, radical Islamism, migrants’ crisis as well as climate change.
In addition to these factors, Thailand is ideally located geographically, nestled between two booming superpowers of China and India. India has enjoyed steady growth in recent years whilst China is recovering having experienced some difficulties between 2014-16. This when coupled with the fact that the Middle East is only 5 hours away all bodes well for the country’s future.
Politically Thailand is far more stable than it has been in recent years. Following the passing of King Bhumibol, the transition to Rama X was very smooth and new elections have been announced for October 2018. In terms of diplomacy, Thailand as manoeuvred a path with both China and the US amongst others to gain greater strength on the world stage.
Why Choose Pattaya?
Pattaya has so much to offer anyone wishing to live here or come on holiday. The basic fundamentals such as the location, the infrastructure such as hospitals, schools, hotels and restaurants along with some excellent beaches, championship standard golf courses and vibrant nightlife all prove highly attractive.
Huge sums of money have been spent on new infrastructure projects such as the extension of Highway 7 to the Rayong “Silicon Valley”, the development of a new terminal at U-Tapao airport – making it Bangkok’s 3rd airport now attracting an increasing number of international flights to and from China with Qatar Airways also offering scheduled flights. There have also been aviation maintenance projects for SEA both for Boeing and Airbus and the long awaited high-speed rail link also looks increasingly likely.
A big indicator of an economic recovery in any country is investment in commercial projects such as Terminal 21 shopping mall in North Pattaya and the Robinson at Mapbrachan. New hotels are also springing up such as the Marriot in Naklua and the Amari Tower at the northern end of Pattaya Beach Roach.
At the new exit of the extension of Highway 7, in Ocean Marina this beautiful 3 bedroom condo for rent
An increasing number of Thais are coming to Pattaya with investment in mind and this includes those who are financing their investments with or without loans. The Chinese and Indians love Pattaya due to its close proximity it Bangkok, good infrastructure, the choice of activities, cheap prices and the pace of life. The Russians are also returning as their economy recovers and oil prices start to rise and these rising oil prices have seen many of the expats associated with the oil industry returning too. Let’s not forget, Pattaya is still relatively cheap in terms of property prices when compared with Bangkok or Phuket for instance.
The market is definitely showing signs of a recovery and this is the time when you should be looking to act and buy or invest. We strongly advise that you look for indicators that can influence your decision as to which property you purchase either for yourself or as an investment.
Try to look for resale condos for rental returns, ones that offer a great resale value. Fire sales are still available to suit all budgets and these give you the best chance of maximising your resale value. Different locations have their own attractions. Central Pattaya, for instance, has a number of very successful projects that are generally easy to rent such as The Base and Centric.
Naklua is a great place to invest if you have larger sums as there is a large working expat population. Jomtien also offers attractive older properties that are usually slightly cheaper but still offer good rental yields. Na Jomtien is a developing area with the extension of the highway whilst Bang Saray is forever increasing in popularity, not least because of its proximity to U-Tapao airport.
Pattaya has a number of reputable developers that offer off-plan condo units. Global Top Group, Nova Group, Sansiri, and Riviera all spring to mind whilst the New Nordic Group offer real estate investments that come with guaranteed rental returns of up to 10% for 10 years. Of course, not everyone wants to buy a condo, houses are available from in the region of THB3 million offering returns of 18-20,000 Thai Baht per month whilst 20 million Thai Baht properties are also offering returns in the region of 6-7% p.a.
Very attractive price for this 1 bedroom condo in Riviera
Land has long since been proven to be a superb investment for the mid to long term. Land in Huay Yai could be found for under 1 million Thai Baht 3-4 years ago and the same land would be worth 3-4 Thai Baht million today. Location obviously plays a big role but there are plenty of opportunities available for all budgets starting at around 1.5 million Thai Baht.
Land must always be owned by a Thai national and condominiums must retain a majority Thai ownership of at least 51%. Properties can be purchased in company name and experience suggests that there is little risk if a reputable Thai lawyer is used to eliminate any potential issues with Thai shareholders. Rumours are always rife about crackdowns and have only happened in Phuket but this was linked more to the local special environment rather than law enforcement. Thais, on the whole, are pragmatic and realistic and do not look to destroy a system that works.
Increases in Land Tax are more likely although this tax is currently low anyway so any increase may be quite justified. Most countries are increasing taxes to pay for social welfare and there are very few tax havens anywhere these days. The Thai tax system is far less structured than in the west so many changes are far harder to implement.
Jomtien is an excellent location for houses. Jomtien Park Villas and View Talay Villas are high in price but offer an incomparable quality of life for the location. East Pattaya and Mapbrachan offer properties to suit all budgets and are attractive rental properties once again due to large numbers of expats living there. Huay Yai, Na Jomtien and Bang Saray are also gaining in popularity due to their proximity to quality beaches and the golf courses.
In Jomtien Park Villa, we just listed this impressive 4 bedroom villa for sale
A Seller Prior to a Buyer?
Naturally it depends on what you are selling but on the whole, you can expect to sell property quicker than before. Set a realistic asking price to attract interest but expect negotiations to be tighter than in the past. In the past, sellers expected to incur losses but now most break-even or generate a small profit.
Why Use Pattaya Prestige Property?
PPP was founded 8 years ago by Jan Nuijten who had previously been the sales manager at Premier Homes. Over the years we have built an excellent reputation and forged links with owners and developers alike. Myself, Patrick Lewinger, took over the company three years ago appreciating that it was one of the best in the region. The core team remained together and we are now expanding.
We have 8 experienced staff, (2 Farang) with an average of 7 years real estate experience and we are based in View Talay 7 in Jomtien. We class ourselves as a traditional real estate company handling sales and long term rentals (no less than 3 months). Our database comprises of 3,300 listings made up of 2,300 condo units, 900 houses, 50 plots of land and 50 commercial units. Our website is state of the art and extremely user friendly.
At PPP, we work with all the major real estate marketing platforms, such as Thailand Property, Dot Property, Hipflat, DD Property, Pattaya Condo Guide. Which means when we list a property it is relayed and shown on all relevant Thai websites. We are proud of the fact that we have teams on the ground and are not purely internet based with no knowledge of the market. We are client focused and this includes owners just s much as buyers and look to build long-term relationships with clients appreciating that word of mouth is the best form of advertising.
We will help you to find your dream property and frequently work with other agencies to find the best property for you. Our services include valuing properties, selling and renting your property, offering professional advice on investments and guiding you through the whole buying process. We are confident that we are the best real estate agency in Pattaya.