Talking Real Estate

[PattayaOneTeam]

Talking Real Estate

By Tim Gladwin,managing director of Sallmanns

I spent a recent weekend in Ho Chi Minh City on a stag party/wedding.

Amazingly, in what amounted to yet another reminder of just how fast time flies, I realized it was about twelve years since I was last there. A small, quiet place, more like a town than a city in which the streets were packed with bicycles has now turned into a sprawling, albeit still charming, city in which you fear for your life whenever you step foot on the road, due to the thousands of motorbikes hurrying from every imaginable direction. I don’t think I have ever before been to a place where the road users make Pattaya drivers appear con­siderate and safe.

The incredible changes that have taken place there over the last decade or so made me think of Pattaya.

So much of modern Pattaya is unrecognizable from what was here twelve years ago, although of course it is never so dramatic when the changes take place gradually over time.

The fact that both places have changed so much in recent times is an indication as to how relatively immature both cities are and thus how immature their real estate markets remain. From the perspective of an investor, an immature market tends to equate to opportunity. The more mature a market, the more established prices become, such that there tend to be few holes in it that can be exploited for capital gain. Of course capital gains are still possible in Pattaya, but they tend to be quite uniform, or alternatively a result of improvements made to a particular property.

The simple reason is that, the more mature a market, the better and more efficiently it works. This means all sellers have easy access to tools to determine the true value of their property at any given time. For example, it is relatively straight­forward to obtain information on recent sales in any given area, and it is similarly easy to find out the asking prices of other properties for sale in the same area.

In a more immature market such as Pattaya, while there is far greater uniformity than there was even five or six years ago, the market does not tend to work so efficiently. It is virtually impossible to find out accurate information as to the prices at which other deals have been done, unless you know someone well who was intimately involved in the deal. Furthermore, it is often hard to know exactly which property is for sale, never mind what the asking price is and whether the same price is being whether the same price is being given to all prospective purchasers.

The net effect is that holes in the market still exist here, i.e. deals are still around which are out of sync with the market and thus very cheap.

It is also true that some other properties are for sale at prices significantly higher than one would ordinarily expect to pay. Thus, while there are certainly some outstanding opportunities, there are also pitfalls for the unwary. Accordingly, for those without detailed knowledge of the market, plenty of research is very important along with, ideally, some good, honest advice.

If you have any questions or queries in relation to the above, or if you would like to discuss any other matters related to the local real estate market, please call me on 087 137 0392 or email me at [email protected].

-- Pattaya One 2010-10-01

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