Although the Bangkok property market does not actually reflect accurately what is happening in Pattaya it does however give an indication of what is happening in general in Thailand. Pattaya’s buying demographic is remarkably different than that of the capital, it has other factors that directly affect it that do not really impact Bangkok. However, trends such as rentals and condo prices roughly follow the same track. The Bangkok condo market has witnessed lower rental yields in recent years as prices have increased faster than rentals, but luxury condos in prime locations continue to attract both Thai and foreign buyers expecting capital gains in the long term.
A great percentage of available real estate in Pattaya is of the cheaper resale units, which are under the developer’s price and current market value, often these are being sold lower that what a new condo costs from a developer. On average Pattaya condos are cheaper per square meter than in Bangkok and recently there has been a glut of discounted apartments and bargain condos for sale flooding the Pattaya market.
There are a combination of elements that make buying a condo in Pattaya cheaper than in Bangkok. Low foreign currency exchange rates, and the oversupply of condo developments in places such as Jomtien contribute to the lower selling prices. The Russian Rouble collapse started a “cheap fire sale bonanza” that has not really totally gone away yet. This led to the situation where it was possible to buy a re-sale condo in Pattaya under developer’s prices for the very first time. Many Russians sold their brand new properties and recovered the currency loss by converting Thai Baht back to Roubles. A big factor in the current relatively low condo prices in Pattaya is the age old economic equation of “supply & demand”. When oversupply outweighs the demand in any product or service, the price falls. This prime economic equation will ultimately dictate market value and the market selling price. To illustrate this, say an oversupply of condos in Pratumnak, means more units on the market, more competition between owners to sell or rent them which will equate to lower prices in the area, as prices are dropped to get a sale.
Most of the available real estate in Bangkok is owned by wealthy Thai nationals. They are not in any particular hurry to sell fast so do not dump property on the market. Most of these owners have bought to rent in a long term strategy, whereas in Pattaya the majority of the discounted units are foreign owned holiday homes. That is because Pattaya has always been the favourite destination for foreign tourists. And foreign currency falls have been the cause of many difficulties in the Pattaya real estate market. Reputable developers can sit out a short term situation like this by upgrading their offering. Either by more amenities on offer, or better quality build and luxury fittings and fixtures. Developers such as the Global Top Group are selling their quality condominiums by offering guaranteed returns offers and luxury furniture packages. They do not simply drop their prices and flood the market with cheap units. This is to the advantage of the buyer, their investment is more secure and market prices for quality units in class developments remains stable.