Why the Pattaya Real Estate market is so different from Real Estate in Bangkok?
Pattaya condos vs Bangkok condos - Thailand real estate goes head to head!
Currently many of the condos for sale in Pattaya are cheap re sale units, under developer’s price and current market value, often these have been sold much lower than what the developer can offer direct in a new condo development in Pattaya. On average historically Pattaya condos are much cheaper per square meter than in Bangkok and recently we have seen an influx of discounted apartments and bargain condos for sale flood the Pattaya real estate market.
Why are Pattaya condos cheaper in compared with property in Bangkok?
We put it down to a few key elements such as a fragile global economy, low foreign currency exchange rates, the increasing strength of the Thai Bhat and an oversupply of condo developments in Jomtien and other suburbs. The collapse of the Russian Ruble was the start of the so called ' cheap fire sale condo' bonanza, where you could buy a re-sale condo in Pattaya under developer’s prices for the first time, this was most certainly made possible by Russian's currency approximately halving in value therefore nearly doubling the value con allowing them to sell cheap and convert the strong Thai baht back to Ruble thus earning a profit and making the money back on the exchange rate. In fact, it makes more sense for them to sell now than it does to wait for the Real Estate market in Pattaya to recover.
Another mitigating factor which is the number one rule of thumb in any form of business economics comes down to supply and demand and when supply outweighs the demand prices fall. This will ultimately dictate the current market value and the price you will eventually end up paying. For example, an oversupply of condominiums for sale in Jomtien, means more apartments on the market, more competition between owners to sell or rent then combine that with the uncertainty of the global economy meaning less people here to buy which equates to owners dropping their price to get the sale.
Over past two years since the start of the Russian Ruble collapsed in mid-2014 Pattaya has become a feeding ground for cheap re-sale condos for sale and people who were liquid cash rich had a fantastic opportunity to take full advantage of the situation with highly discounted properties. In some instances, investors are able to buy a new condo in Pattaya for almost half the original market value.
Why aren’t we seeing a similar scenario in the Bangkok property market?
The majority of Real Estate in Bangkok is owned by wealthy Thai nationals and we all know they are in no hurry to sell for a loss! Most of the Thais buy property in Bangkok to rent out and have a long term investment strategy, whereas compared with Pattaya the majority of the cheap apartments for sale are foreign owned holiday homes. This is because the main destination in Thailand for foreign tourists has been Pattaya and other sea side holiday resorts where fluctuations in currency can play a big part in a low offer being accepted by a foreign owner.
So how long do we think will these heavily reduced condos in Pattaya will last? Although there is no immediate sign of an overnight currency recovery or solution to the global financial markets, we are already starting to see a drop off in these low priced cheap condos, that's due to the fact the Russians buyers only brought so many units and as the old saying goes when they’re gone they’re gone regardless of the exchange rates! If you compare condominium prices with houses for sale in Pattaya you won't see the same picture you do with Pattaya condos this is because most of the foreign real estate investment in Pattaya was directed at low end condos close to the beach and holiday style resorts complexes.
So the best advice our agents can offer moving in to the 4th quarter of 2016 is, if you’re looking to buy property in Pattaya, be prepared to do your due diligence, ask an expert for real estate advice, research a well-built condo development in popular locations, take in to account local amenities, shops and recreation. Location most definitely plays a key role in any Real Estate market, central city locations often have increased demand for the area and command higher land prices due to the limited availability. We have seen many condos for sale in central Pattaya hold their value and if anything, the prices have steadily increased, this is also true with beachfront properties, unique apartments with sea views and new high end luxury condominium developments built by well trusted developers.
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