What is Happening in Pattaya’s Real Estate Market?
Pattaya, Thailand’s eastern coast, is visited by people from all over the world due to a lot of things, but mainly because of its booming tourism and perceived favourable investments. It is undoubtedly one of Thailand’s most famous destinations, harbouring almost 8,000,000 tourists each year.
Despite its fame, a lot of issues have placed Pattaya in a bad light. Such issues include multiple unsold properties, the lack of new launches, and the overall slowdown of the Pattaya real estate market with a specific highlight on the weakening of the Rouble and the loss of a large chunk of Russian investors.
But, what is really happening in the Pattaya real estate market?
Steady Demand for Homes
The expat community in Pattaya amounts to over 40,000 and there are more to come. In general, Pattaya has a lot of advantages in store for interested property buyers and investors. For one, the cosmopolitan resort district has a developed infrastructure (more developments are expected to take shape, such as the Bangkok-Pattaya high-speed rail link). Its proximity to Bangkok, not to mention it being a tourist magnet, took it a few notches above other popular spots in Thailand.
One driving force for Pattaya real estate investments is the Eastern Economic Corridor (EEC). A series of investments, the EEC aims to turn the Gulf of Thailand comprising Chonburi, Rayong, and Chachoengsao into a hub for technological manufacturing and services. The EEC also wants to enhance the connection between other ASEAN neighbours in both land, sea, and air.
Current projects include the extension of U-Tapao Airport in Rayong Province, high-speed and double-track railways, and the expansion of the Laem Chabang seaport.
As the businesses in these areas begin to flourish, employment will also increase, which in turn would demand homes. A report on the Pattaya market by Colliers International indicates that there would be a demand for engineer level and skilled labour. The industrial sector projects that there will be more than 100,000 people in the next five years after the EEC opens.
Moving to property investors, Thailand has seen ups and downs. With the immense absence of Russian investors during 2014-2015, their top spot has been readily taken over by the Chinese. Nikkei Asia Review reports that Thailand has become the third most desired destination for Chinese homebuyers, after U.S and Australia, having poured in USD 10 billion since 2015.
Several reports also show that the Russians are slowly coming back starting 2016, said Yulia Kozhevnikova, real estate researcher at international property brokerage Tranio.com. For instance, in Banglamung near Pattaya, Russians have purchased “some hundred or more” units in the luxury villa complex Baan Dusit last year, says Clayton Wade, managing director of Premier Homes. Now, most Russian buyers are engaging in the buy to let market, he added.
Other nationalities such as Indians, Malaysians, and Arabs also occupy a large number of property investments. Needless to say, the foreign market of Pattaya has been helping it stay afloat for the past years and for the years to come.
On the contrary…
Despite the advantages of a Pattaya property, some reports warn of the potential condominium oversupply. The year 2018 saw a total condominium supply of 88,330 units, the Land Department said. But despite the relatively high take up with around 80% last year, some 12,000 units wait to be sold.
Phattarachai Taweewong, senior manager of Colliers International Thailand’s research department, as quoted from Bangkok Post, said that “Developers should be more cautious of new supply launches as most buyers in the Pattaya condo market are investors expecting attractive yields. Very few buyers purchased for personal use.”
Due to the large condo supply remaining, the confidence of both buyers and developers have weakened, he added.
Phattarachai Taweewong further said developers must first focus on “draining” supplies of Pattaya condos and homes. Also, new launches should focus on attractive features and a good location with affordable prices for buyers.
Property Appreciation and the Continuous Property Prices Increase
The average price of properties back in 2016 was only about THB 82, 500. Now, multiple properties for sale in Pattaya, Thailand have typical prices reaching THB 100,000 and above. What’s more is that the nearer the property is to the beach, the more expensive it is. Beachfront units sell more than THB 150,000 per sq.m. in Wongamat, whereas they sell for THB 130,000 per sq.m. in other beachfront areas.
On the contrary…
Despite that, Pattaya has one of the most diverse properties, making it widely available for either mid-end or high-end market. Jomtien has the lowest average price of condominiums in Pattaya City because of multiple less-than middle-level projects in the area.
There are a lot of clashing reports regarding the advantage or misfortune of Pattaya. But overall, Pattaya will not be facing a major slump any time soon.
However, international trends will highly affect Pattaya real estate investments. As much as foreigners bring delight to the real estate market, property investments should be approached with caution.
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