In spite of the significant amount of rain that has started to fall recently, the last couple of weeks or so have seen an upturn in business in the local real estate market. I don’t believe this is any coincidence. I often talk about what I consider to be the Pattaya rainy season, a period of typically about 6 weeks during part of September and most of October.
By the time November arrives, the rain has generally stopped and what most people consider to be the traditional high season has arrived. Thus I believe it is the approach of the high season that has brought both the rain and the improved business levels.
I talked last month about how we often see a pick up in long term rentals at this time of year. The last month or so has indeed reflected this. I also talked about how I thought more Brits and Europeans might come to Thailand for a holiday during the back end of the year, having stayed at or close to home during the summer because of the Olympics. Again this seems to be borne out by the high level of inquiries we have been receiving from prospective purchasers due to arrive in the near future.
A friend who is about to head back to the UK for a couple of weeks told me that the return flights (from London to Thailand) are booked solid for at least the five days immediately before and after his own flight. He tried to change his own flight to one of those days, but was unable to do so.
Of course one has to be extremely careful about drawing conclusions based on a relatively brief pick up in activity in the market. Sometimes, the market will just get busy for a short period of time for no particular reason before then quietening down, again without any obvious explanation. However, bearing in mind that we are now closing in rapidly on the traditional high season months, I personally believe that to be the principal reason for the upturn. The last three to four years, since the darkest days of the global economic crisis, have seen each succeeding high season get a little busier and a little better from a business perspective. My own belief is that we will see another improvement again this year from last. I am certainly not saying that I expect things to go crazy, or anything like it, but I expect that the steady, gradual improvement that has been happening now for a few years will continue.
Even if the current upturn in business does turn out to be short lived, it is worth remembering that (at the time of writing) we are still only in the third week of September. While the traditional high season is generally considered to start in November, as I have pointed out before, it is not a sudden on-set, but rather one that starts gradually and gets increasingly busy in the lead up to Christmas and New Year when things tend to be exceptionally busy. The first three months of the new year then tend to be good from a business perspective and typically busier than the preceding November and early December. So even if this current upturn proves to be nothing more than a blip, there is still no real reason to be pessimistic about the prospects for the high season.
In general economic terms, the outlook for Thailand continues to be very promising. Only this week, HSBC released a report, aimed principally at the equity markets, which concluded that Thailand is a structurally strong growth story in which the former political risk is now receding. While the commentary related to the equity markets, obviously they reflect the performance of many of a country’s biggest companies and thus the country’s overall economic performance.
Clearly that ties in to a significant extent with the outlook for the real estate market, particularly with respect to domestic demand which is something that has grown very significantly in the Pattaya area in recent months and years; growth which looks set to continue for the foreseeable future. Demand from foreign investors is great for the local market, but a strong foundation from domestic demand will serve Pattaya real estate very well going forward.
If you have any questions or queries in relation to the above, or if you would like to discuss any other matters related to the local real estate market, please call me on 087 137 0392 or email me at email@example.com.