Times of Opportunities
By Heiner Moessing
Pattaya's real estate market and tourism is going through significant changes: a little more than a year ago the Russian language dominated Pattaya so much that one English newspaper called Pattaya “colonized by Russians”: nearly every restaurant menu was available in Russian, sales people in shopping malls could speak a little bit of Russian, every real estate sales office had at least one Russian staff, several TV programs, magazines and newspapers were available in Russian.
Many people expected the property market in Pattaya to crash similar to Spain, when the economic crises started there.
This did not happen:
Pattaya, Thailand and the whole of South East Asia are still growing and although growth rates might fall for one or two years the overall tendency is still going up.
Even better, Thailand and especially the East Coast around Pattaya will be at the center of the upcoming Asian Economic Community.
Different from Spain, where unemployment is high and the job market for young people is desperate, Thailand has to import workforce for construction and farming, young people leaving universities have hardly any problem to get a job.
The investment into infrastructure in Thailand and as well in Pattaya is rising every year:
just last month the government published its plan to improve the air port U Ta Pao.
It is projected that the annual capacity will rise from 160 000 passengers to 1 M within
3 years; this could even rise to 3 M within 7 or 8 years.
Many developers substituted Russian buyers with Bangkok Thais. As Thais who have a permanent income can get a bank finance quite easily, they only need to pay 30% until completion, 70% will be taken over by a bank and then developer gets his money.
Not all Russian were unable to pay for their properties because of the weak Ruble, sometimes new payment plans were negotiated or the buyers borrowed money etc.
The ones who could not or did not want to continue with their off-plan properties offered them with discounts between 10-30%. Considering that the Ruble declined by more than 40%, losses could be minimized or even brought to Zero!
As all other currencies (EURO, Pound, some Dollars, all Krone/Crowns) except the US Dollar declined, similar opportunities were offered to non-Russian sellers: prices could be reduced so in foreign currencies the prices remained the same.
We at Siam Properties notice that buyers now are convinced that the prices “bottomed out”, currencies stabilized or even got stronger (UK Pound for example). The result is that “it is the time to buy!”
The demand for well-priced properties, with exceptional “value for money” has been rising for several months and we even had the fastest sale in our history of 15 years Siam Properties: we just sold a very nice house listed with us within 24 hours, the house never made it even to our web page!
Investment properties are under pressure especially because the rental market is the worst for many years, but the discount a buyer can get at the moment is in the dimension of 1-2 yearly rents, so who cares if the property is empty for several months?
A nice 2 bedrooms house with private pool and big garden for 3.5 M Baht, 84 sq.m. condo with tremendous sea views in good location for 2.7 M Baht – these are gone but we have several similar bargains, so pick up the pone and give us a call!
“Be fearful when others are greedy and greedy when others are fearful”: with this strategy Warren Buffet became the most successful stock market investor ever and the richest person in the world.
Heiner Moessing has been living in Pattay for more than 20 years. He started as a partner in a housing project, became a real estate agent as a partner in the real estate department of the German magazine FARANG and opened Siam Properties together with his wife Khun Walaiporn Moessing in 2000. Siam Properties is a founding member of REBA ES (Real Estate Broker Association Eastern Seaboard), Heiner is currently a board member (Secretary).