Property Boom

[Silent Tiger]

In the last 2 years i have been told a property boom as been going on in Pattaya a friend i know bought a house nr Sukhumvit rd nr Thepersit he bought the shell for 2,500,000 baht he paid 600,000 baht on improvements total 3,100,000baht & within 7 months.

He sold it for 4,100,000 baht is this just good business from him or is there a price boom now !!!

Could this also be with news of the new airport or a general thing

Cheers

[yarpy]

I decided two years ago that condos were madly overpriced and would crash and so I rented . Since then they have doubled in price (but see below) so I got that wrong, however its a very weird market.

New builds are going like hot cakes off plan. The new View Tally (5?) has been sold out for months, however;

Sales of second hand units are difficult and unless its a corking condo in a top building very very difficult. Anything even remotely second division is unsaleable at anything but fire sale prices.

Renting is ridiculously cheap and most rental units are empty most of the time. Take the capital you would spend on a purchase, calculate interest at say 5% and see what you could rent for that sum. At least twice the value. Nuts. Can't see that anyone renting out condos is making anything like an economic return.

I also can't see the new airport as a big deal. Will cut half an hour off the run to Pattaya at best. And as an add on to say a 12 hour direct flight from London, peanuts.

The market just doesn't make any financial sense whatsoever. But hey TIT.

I am happy to stay renting for the moment and see what happens...

[galt67]

I, too, think renting is a wise move in Pattaya. The rent to buy ratio is WAY out of whack!

And I think globally we're going to see a decline in property values over the next few years--especially if the US goes into recession, it would the world with it.

[Chopper]

I decided two years ago that condos were madly overpriced and would crash and so I rented .  Since then they have doubled in price (but see below) so I got that wrong, however its a very weird market.

New builds are going like hot cakes off plan.  The new View Tally (5?) has been sold out for months, however;

Sales of second hand units are difficult and unless its a corking condo in a top building very very difficult.  Anything even remotely second division is unsaleable at anything but fire sale prices.

Renting is ridiculously cheap and most rental units are empty most of the time.  Take the capital you would spend on a purchase, calculate interest at say 5% and see what you could rent for that sum.  At least twice the value.  Nuts.  Can't see that anyone renting out condos is making anything like an economic return.

I also can't see the new airport as a  big deal.  Will cut half an hour off the run to Pattaya at best.  And as an add on to say a 12 hour direct flight from London, peanuts.

The market just doesn't make any financial sense whatsoever.  But hey TIT.

I am happy to stay renting for the moment and see what happens...

<{POST_SNAPBACK}>

Yarpy you are quite correct; Pattaya is certainly a very unusual market. Condos costing far more than houses to rent. Especially at the high end.

There are certain niches where very profitable returns can be had by Landlords renting out their condos, I would disagree with you here: A very close friend of mine is making a 22.5% return a year on his investment which by the way has increased at present CMV by 65%. Not a bad return in two years.

Your comment about second division units is quite true. Many of these are being snapped up then upgraded and turned around for a good profit.

New builds are going like hot cakes. In part because many speculators simply by the best units on contract and then sell the contract on at a later date for a very healthy profit.

The new airport, and surrounding infrastructure and increased tourism that may be a spin-off is likely to be a positive force for the property sector.

[astral]

Remember it is not just the rise in the baht price of the property.

When I first arrived there were 25baht to the US dollar, now it is 40.

That sort of currency swing can nullify any perceived profit!!

[Silent Tiger]

Thanks guys !!!

Been told simular things on other sites