The Pattaya property market is one of the easiest to enter as a first time real estate investor, or as an experienced full-time professional property investor, and is awesome if you’re in the fortunate position to be able to buy right now.
Those were some of the findings of a new survey commissioned by Pattaya property developer Kingdom Property in conjunction with Pattaya property real estate firm Property & You last month.
The survey reported that Pattaya’s real estate market isn’t like most markets in the world where buyers first need to get a pre-approval from a bank before they start looking at properties. Real estate transactions in Pattaya aren’t usually directly connected to any bank or financial institution.
Author of the survey Frank Satar wrote: “One can say that Pattaya is a cash market, and they would be right. While enjoying really cheap prices by international standards, payment options on offer from developers make the Pattaya market that much easier to approach and enter.
“I personally haven’t seen an easier market to enter as a first time investor or a veteran full time investor.”
During September 2015 a selective survey was carried out looking at the resale market of new condominiums in the greater Pattaya area. The purpose of the survey was to evaluate the resale market, which has recently become very strong and in some ways is now competing with many of the showrooms around Pattaya, the author noted.
Besides the recent trend of the quick re-sale method, rental properties have always been very popular choice for many real estate investors in Thailand. With the right rental property, investors have been reaping eturns on their property investment of between 7 percent and 10 percent per annum.
According to the survey, this return-on-investment figure is great compared with markets like Melbourne in Australia, where rental returns are only about 4 percent with very high agent fees. The advantage that the Melbourne real estate market possesses over Pattaya is in its high capital growth rate. Capital growth is the main objective for most Australian property investors. The rental return is only a buffer against the mortgage repayments.
The survey noted how the real estate potential of Pattaya is still very much an untapped one, regardless of the high number of units currently on the market.
First of all, it is very cheap compared to many other countries. For the same money that you could buy a luxury beachfront condo in Pattaya, you couldn’t buy an apartment less than 30 kilometres from a beach in Melbourne. So it’s much easier to enter the market.
The fact that it’s cheap also means that it’s a cash market. Nothing is tied to any Thai/global financial institution, and that’s why world financial crises do not hit Pattaya as hard as they would hit other cities in the world – where 80 percent of real estate titles would be held at the bank against one or more loans from different mortgagees.
The only way any global financial crisis can impact the Thailand real estate market for foreign investors, according to the survey, is the shift in values of different currencies. At the present time the US dollar is strong, as well as the buying power of the Chinese middle classes. Before Pattaya had a very strong Russian market due to the strong Russian expatriate base in Thailand which was a direct result of their strong currency versus the Thai baht.
What happened to Pattaya’s Russian market?
The survey noted that besides the bad luck in the fall in the Russian currency, the mistake many Russian buyers made was that they over capitalised – hoping to make a quick profit in the once buzzing Pattaya real estate market. This was especially true of the buyers who came late and also got hit by a weak sellers’ market paired with the weakened currency.
This was mainly the fault of their advising real estate agents promoting this quick sale technique at the wrong time in the market, the survey noted.
“Many agents are guilty of this, and these same agents are now making good money selling these properties for their disappointed investors at between 20 to 40 percent below market value,” the survey alleged.
It wasn’t only Russians who made this mistake. It was a good idea but came too late.
The good news is now that for today’s cashed-up and smart property investor can buy many of these properties even cheaper than the later investors paid for them at launch prices.
“So don’t believe when someone tells you that it’s a bad market. It is only a bad market if you are selling, but it is an awesome market if you are lucky enough to be in the position to buy,” the survey highlighted.
To read the full survey findings and its recommendations for condominiums to consider in Pattaya see here.