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Article by: property@csloxinfo.com (Tim Coxon) Published: 04/05/2010

A review of the Pattaya Real Estate Market by Tim Coxon for Thailand property Report

The complex nature of the Pattaya property scene has changed radically since the halcyon days of 2007. Back then is was the high profile developments which took centre stage, but with just three of those currently active - Northpoint, Ocean Porfofino and The Cove - it has been suggested that international developers have overestimated the potential of the market. What we have right now could be a more realistic scenario where the middle- and low-end segments are driving the market.

We have also seen a shift of emphasis towards Thai developers, who are making significant inroads into all segments of the market. We have also seen a swing towards younger purchasers buying cheaper holiday homes, often for investment purposes. The rental market has also changed from long-term executive-driven customers to short-term lets. Payment plans and developer financing of up to 50 per cent are immensely popular incentives in the marketplace currently.

Reassuringly, significant properties such as The Sanctuary, The Cove, Ananya and Horseshoe Point are still winning acclaim, but prices per square metre overall fell to below THB100,000 from a peak of more than THB200,000.

Virtually all sectors of the property market in the city suffered during the first half of 2009, with condominiums returned to developers and, crucially, tourist numbers generally down as a result of lingering fears of airport disruptions, political instability, swine flu and the general global financial malaise. However, the third and fourth quarters saw a significant upturn as customer confidence started to return and a number of bargains to be had. In common with others Pattaya City Property’s Gavin Perfect recounts witnessing: “many fire sales that came on the market due to the owners having financial problems.”

Salmanns’ Tim Gladwin views the Pattaya property market as being decidedly cyclical and now sees sales are generally improving, but as Colliers International’s Mark Bowling asserts: “The bread and butter is at the lower end of the market in condos priced between THB3 million and THB5 million.” In the forefront in this area are Thai developers, particularly Ratarnakorn, SP Homes, Lenki and Apus. Gladwin maintains: “The downturn has encouraged more Thai developers to seek assistance from real estate agents with links to the foreign market.” Some Some Thai developers are copying the Western agents’ tactic of employing Russian speakers to attract CIS customers, and have also started to employ English-speaking foreigners to interface with Westerners. However, a number of ´Western´ real estate agents, including Town & Country Property’s Cees Cuijpers, suggests that:

“Some Thai developers are still unprofessional in their approach.” Experiences are certainly mixed about Thai developers who use Western real estate agents. While Siam Properties’ Heiner Möessing suggests: “Thai developers are very flexible in negotiations with agencies and their clients when it come to closing a deal,” Apus Condominium’s Jason Payne maintains “Most Thai developers would rather assign a large advertising budget to try and sell the project, and thus reduce the need for agent involvement. We, as a Thai developer, do use agents, but we also do our own large marketing campaigns.”

When in comes to demographics, in the experience of Premier Homes´ Clayton Wade significant numbers of Bangkok-based Thai´s are starting to purchase, including a large number in their 30s and 40s who are purchasing with 50-70 per cent mortgages for their new investments. CIS-specialist, Farang RU’s Denis Nemtsev, says: “We have had many more enquiries during December and January than in previous months, but 70 per cent were in the range of THB1 million and THB 2 million. Budget condos were selling well. CIS citizens are still looking for freehold foreign quota condos, although developers are trying hard to sell Thai quotas by offering very attractive discounts and finance. That unfortunately doesn’t work with Russians.” This is in marked contrast to 2007 when many CIS citizens were buying high-end, albeit off-plan, largely to their detriment.

Most agents and developers concur that Russians continue to be the biggest foreign players in the city, with signs of activity from buyers from China, India and Korea who are matching buyers from Britain, Australia and Scandinavia.

 

External Article Link: http://www.property-partnership.com/overseas-property-guides/overseas-property-guide.cfm?id=274

Article Link: http://www.property-partnership.com/overseas-property-guides/overseas-property-guide.cfm?id=274

Please contact the author at property@csloxinfo.com for more information.