The Day AFTER Pattaya Real Estate Prices Bottomed
by Robert Watson
As a Certified International Property Specialist with my own real estate business it would seem that I am locked into the position of always maintaining a positive outlook on the real estate markets in which I work. However, since I am not only a Realtor®, but also an investor and financier for properties, I must go beyond that real estate agency stereotype because ultimately my own money is on the line. That said, I can confidently say that Pattaya’s real estate decline has seen its bottom. There are several reasons why, but perhaps the biggest and most important of which will be revealed to the public for the first time in this very article!
First let’s look at the known facts:
Real estate cycles are based on supply and demand. In recent years Pattaya’s overbuilding mania had reached impressive heights. However, recently a change has occurred. Builders have refunded projects and cancelled plans for others. The amount of new property building in Pattaya has plummeted to a near non-existent level compared to where it was just two years ago. This marks the beginning of a supply cycle change as a lack of new supply will allow for excess inventory to be removed from the market, which is the first sign of a market bottom.
The expansion of the Eastern Seaboard Economic Corridor has led to one of the largest government and private investments in Thailand in its history. This is focused on Thailand’s eastern seaboard, including Pattaya and the surrounding areas. In many ways the supply issue discussed above was furthered by the expectation for the demand increase from this expansion plan. However, the supply always comes before the demand and therefore we are in a period of time where the supply exists and the demand is in front of us. Therefore, it is reasonable to expect that the demand is about to spike in a very positive way for Pattaya. An expansion like this typically comes with a large growth in corporate and higher net worth buyers. People like managers of manufacturing facilities and successful entrepreneurs that often come along with the growth of an area.
The return to a democratically elected government. Often a real estate decline is preceded by a drop in investor confidence. Government instability can often trigger this issue, and many believe that the expectation for a 2018 election in Thailand will help to significantly increase investor confidence in the real estate market, thus spiking foreign demand.
The collapse of the Russian Ruble against the Thai Baht three years ago led to a massive decline in both tourism and investment from Russian citizens in the Russian-friendly Pattaya area. However, in the past 18 months the Ruble has not only stabilized, but actually rebounded from its lows, and the reemergence of this demand base is widely expected.
The biggest indicator of a bottom is when all of the negative fundamental influences and fears have seen their worst, and all signs certainly point to that being in the case when it comes to Pattaya. In some instances, the big catalyst of a rebound in real estate can be sparked by an accessibility change. By accessibility I mean the ease in which an investor can acquire their targeted investment. This can come in many forms, such as an easing of laws that restrict foreign investment, an improvement in the visa requirements for foreign tourists and businessmen, a reduction in banking red tape, or the availability of financing to ease financial requirements for property acquisition. To that end, Five Star Villas and Condominiums Co. Ltd., a trusted long-standing name in Pattaya real estate, is proud to announce a property financing program specifically designed for expats. This program is sure to jumpstart demand in Pattaya with the ability for foreigners to acquire property with as little as 50% down, and interest competitive with the local market that has only been accessible to Thai citizens … until now.
What makes this financing program so significant is that it will help the local market by increasing demand for higher priced properties as they become more affordable and accessible to a group of buyers that previously could not have afforded them. It is yet another important indicator that a bottom has occurred in the Pattaya real estate market.
To find out more about the Five Star property financing program you may contact us at 08 1938 8391
Robert Watson: Certified International Property Specialist; Certified Residential Specialist, Member of NAR Global and Pattaya Real Estate Brokers Association.