When we examine the Pattaya property market, it would be unwise to the view of the city as an island and should also look at the broader picture of Thailand. Growth in Thailand’s property market has been on a consistent but slow-moving upward trend for the last five [PL1] years. A significant reason for this is the number of foreigners coming to live in places such as Bangkok and Pattaya. In Pattaya, we have witnessed a substantial shift in the groups buying property, with the most significant market movers now being Chinese investors. This makes Thailand sensitive to China’s economic performance with the current trade war with the US causing some levels of alarm.
Thai investors in Thailand slowed in 2019 thanks in large part to banks stricter lending policies. In Pattaya, this was left to a lesser extent with many properties bought as second homes or weekend retreats by Bangkokians. Investors of all nationalities are still buying properties for investment purposes. Although occupancy rates were down in the traditional low season, they did receive a boost in the high season, especially in some of the more upmarket properties.
The downside of this is that much of this occupancy is from short-term tenants, many of whom, or more to the point, the landlords are in breach of Thailand’s strict laws regarding short-term rentals in condos. As we have discussed before, condo buildings MUST have a hotel-license to be able to offer rentals for less than 30 days.
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The Pattaya Property Market
It would be foolish to suggest that Pattaya’s property market didn’t suffer a slump in the mid-2010s, and the market has certainly not fully recovered as yet. Many projects in recent years were mothballed, mainly due to an oversupply of units and a lack of demand. However, 2019 saw an upturn with developers appearing to regain confidence in markets and building work recommencing. It is a trend that is set to continue in 2020.
Expats arguably have a bigger influence on the property market in Pattaya than anywhere else in Thailand which may be the exception of Phuket. The number of western ex-pats has been steadily declining in recent years. The oil and gas industries that employed hundreds of skilled ex-pats have been severely hit with just a fraction of the previous numbers still employed. Also, the strength of the Thai Baht and Retirement Visa restrictions has seen many ex-pats forced to leave the country.
Sadly in 2020, it is hard to envisage a significant change in this trend, especially with westerners, even with the further developments on the Eastern Economic Corridor (EEC). It will mean that properties which had previously been bought as homes are no longer being purchased and there is again an oversupply of resale properties from ex-pats who have left or leaving.
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On a much brighter note, we have seen the confirmation of mass investment in the region such as the high-speed train, and the extension and improvement of U-Tapao Airport. Investment properties are still popular amongst this group, with larger investors keen to move some of their money out of China which is helping to compensate for the fewer “small” Chinese buyers. It is something that will not only continue in 2020 but is expected to follow suit in 2021 and beyond.
Of course, when the markets are experiencing challenging times or when the conditions are changing, it is always advisable to call upon the services of an experienced and reputable agent that is familiar with the Pattaya market. Here at Pattaya Prestige Properties, we have experienced both the highs and the lows of the market and are ideally placed to offer sound and reliable advice to help you get the best property for you.