Pattaya Market 2017 Overview
By Ekaterina Okisheva, managing director at Invest East Property consulting agency.
In my opinion, this year was very important for the Pattaya Property Market. As a property practitioner and certified specialist, working here since 2008, I have seen many ups and downs in the market. My native market is Russian speaking buyers, it grew incredibly quickly from 2009 to 2012 but then dropped down dramatically after 2014.
Global recession always affects the market, but the last one after 2014 had a huge effect. In the last couple of years some off-plan projects in Pattaya were cancelled or suspended with just a few released onto the market. Most developers were selling stock of their finished or under construction units. Prices from developers fluctuated a bit, but additional discounts, free furniture and tax offers helped developers to keep their revenue. Russian speaking buyers were replaced by Chinese, opting mostly for cheap properties (around 1,5 mln THB) but in huge deal numbers. Russians became mostly sellers and the second hand market flourished with enormous amounts of hot sale listings. Any new condos were mostly re-sales of developer contracts. Thais, French, Indian and Arabian buyers, with some additional Japanese and Singaporeans, acted mostly in a middle class and luxury segment of the market.
Willing to get back at least what they paid at the beginning, Russians dumped into a second hand market and smart buyers were able to get really good deals. In 2012 Thai Baht and Russian Ruble rates against the USD were almost equal but since 2015 1 THB = 1.8 RUB. This has meant that for Russian sellers to get back their couple of mln Rubles paid in 2012 they needed to sell their property for roughly only 1 mln in 2015.
Our agency specialized in these hot sale listings, not only from Russians. Some European sellers were also ready to provide up to 30% discounts, as the Thai Baht surged against the Euro as well. This year has seen fewer such properties available, but the difference between prices listed from developers and those on the resale market is still quite large. Recently I have carried out some research for one of my clients on the new development projects off plan market. I reported back to him that prices per sqm. are 100,000 THB and more. High rise buildings, sea view off plan condos with nice views and furniture can even be around 130,000-140,000 THB per sqm. Whilst in the second-hand and resale market similar brand new properties cost somewhere between 65,000-95,000 THB per sqm. up to just a bit more than 100K per sqm. for luxury condos with sea view and brand new furniture.
There are a few reason why developers keep these high prices for their properties: land prices as well as labor costs are up, demand is still qute positive, property prices through the country are rising and the future of Pattaya city seems glorious. News about infrastructure projects in Eastern Seaboard are promising, with lots of new roads under construction around Pattaya, a railway modernization project and new high speed train in a draft. Great plans for Eastern Economic Corridor project. Enormous development projects for Chonburi, Chochengsao, Rayong provinces with Pattaya city just right in the center of the whole action.
Well, we’ll see, but this is already happening and Thais, Chinese, Japanese are the main investors for these projects, and they are also the main buyers on the Pattaya property market now as well.