Pattaya condo market shrinks 60 percent in first half

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Pattaya condo market shrinks 60 percent in first half

As new condo sizes are - perhaps some correlation between these issues ?

The smallest units I've heard of are 24 sqm.

really, who buys a 24 sq meter condo? one would have to go outside just to change his mind. My master bath is 24 square meters and I wouldn't want to eat, sleep in there either.

Pattaya condo market shrinks 60 percent in first half

As new condo sizes are - perhaps some correlation between these issues ?

The smallest units I've heard of are 24 sqm.

really, who buys a 24 sq meter condo? one would have to go outside just to change his mind. My master bath is 24 square meters and I wouldn't want to eat, sleep in there either.

right, I also wouldn't want to eat in your bathroom alt=laugh.png>

Do a search - its almost beyond belief that developers think there is a market for these sized units.

I'm not surprised, as either of you are, that such sized units remain unsold, after all most people with enough money to buy them are simply not stupid enough to.

I can see though that people, in the future, would buy 2 or 3 of them and knock them into a single liveable space but that's only if the prices asked came down.

More likely they will just stay empty as price reduction seems to be an anathema to Thais.

[SNGLIFE]

Methinks Udon Thani's condo market will grow more than Pattaya/Jomtien 2015 both in units and uptake. If they allow for and build a vice zone with gambling along the Udon/Nong Khai corridor, then fahgetaboutit. Thai males will keep their white-skinned Laotian mia nois in their 25 sqm condos and party it up at the gambling tables.

Big picture-wise, it makes much more sense. Udon has an international airport with room to grow, the new rail connected to China (#1 tourist population) with their free visas, and many other advantages over Pattaya/Jomtien. Methinks Pattaya/Jomtien will be for farangs and Udon Thani will be for Thais, Chinese, and other ASEAN peoples who have disliked the farang sin cities for decades. Smart move.

Time will tell, but I sure as heck would not consider buying in Pattaya/Jomtien. I lived there for years and recall the post 1997 cityscape of abandoned projects and construction cranes. I was too much of a noob to foresee the boom, but I am glad I left. It's bonkers now. With the benefit of almost 2 decades of Thailand living knowledge, my bet is Udon Thani for the next 10-20 years.

Pattaya has been building for Russians of late with no thought about what will happen when that loonie Putin wrecks the Russian economy chasing his Czarist dreams...

[Asiantravel]

Methinks Udon Thani's condo market will grow more than Pattaya/Jomtien 2015 both in units and uptake. If they allow for and build a vice zone with gambling along the Udon/Nong Khai corridor, then fahgetaboutit. Thai males will keep their white-skinned Laotian mia nois in their 25 sqm condos and party it up at the gambling tables.

Big picture-wise, it makes much more sense. Udon has an international airport with room to grow, the new rail connected to China (#1 tourist population) with their free visas, and many other advantages over Pattaya/Jomtien. Methinks Pattaya/Jomtien will be for farangs and Udon Thani will be for Thais, Chinese, and other ASEAN peoples who have disliked the farang sin cities for decades. Smart move.

Time will tell, but I sure as heck would not consider buying in Pattaya/Jomtien. I lived there for years and recall the post 1997 cityscape of abandoned projects and construction cranes. I was too much of a noob to foresee the boom, but I am glad I left. It's bonkers now. With the benefit of almost 2 decades of Thailand living knowledge, my bet is Udon Thani for the next 10-20 years.

Pattaya has been building for Russians of late with no thought about what will happen when that loonie Putin wrecks the Russian economy chasing his Czarist dreams...

" I lived there for years and recall the post 1997 cityscape of abandoned projects and construction cranes"

that reminds me of the article in Forbes business magazine over one year ago

“Boonchai Bencharongkul, one of the three aforementioned tycoons, said “I think the current situation is worrisome. As one of those who had such an experience, I can smell it now. People are rushing and competing to buy condos while more and more people are driving Ferraris. These are the same things we saw before the 1997 crisis occurred.”.

http://www.forbes.com/sites/jessecolombo/2013/11/04/thailands-bubble-economy-is-heading-for-a-1997-style-crash/

[belg]

something to do with possible long stay tourist runners, not renting of buying a condo long term, is it ?

[KittenKong]

really, who buys a 24 sq meter condo?

Thais do, for weekend breaks. Personally I think they are bonkers.

[KittenKong]

As often in these articles I have difficulty in following the numbers.

"(Kongcheep)said about 3,800 units were launched in the first six months"

Compared to 47,000 scheduled to be completed in the last six months.

"There are more than 28,200 condominium units under construction in Pattaya city that are expected to be completed in second half of 2014," he said. "Nearly 18,850 units are scheduled to be completed in the second half of 2014 in Jomtien".

As far as I know "launches" are when a new project is announced. So that figure should give a good idea of how hot the market is (or, in this case, how cool it is).

"Scheduled for completion" means what it says, and includes projects that are being built at the moment and those that haven't actually been physically started. Whether the buildings that are scheduled for completion will actually get completed is anyone's guess.

[Tony125]

something to do with possible long stay tourist runners, not renting of buying a condo long term, is it ?

Just my opinion but I think there will be a glut of unocupied condo's on the market a lot of farangs who thought they could use the visa rules to stay long time or just overstay now are leaving because of the crackdowns.Others from Russia and elsewhere who were thinking of doing the same thing are now rethinking their plans and heading somwhere they won't have to jump thru hoops ans face ever changing rules insructions on visa.

Especialy with innconsistancies at border crossings in the south. No one wants to buy or rent a condo long time to later find out they are barred from reintering at the border . Not exactly "tourist" friendly

[jinners]

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This ponzi/condo train is going over a cliff.because developers cannot stop and have not limited development in accord with world and local economy. Enter the black swan.

There is a confluence of independent events in play here Russians stop buying at the bottom of the pyramid.

Household debt for Thais is out of control..Gross over supply,.Speculators cannot pay back loans because they cannot sell. This will create a cascade of sellers.

The downward vortex is underway. This house of cards can no longer defy the laws of supply and demand.

Is it really because of political turmoil ????? Or maybe people really got bored with pattaya ..

This statement would suggest actual purchases are on the increase.

Surachet said the average take-up rate in the condominium market in Pattaya was still similar to the past few years.

He said the figure at the end of the first half of 2014 was approximately 73 per cent, a little higher than the previous six months.

It is just the number of units launched that has decreased, but who knows for sure? it's all smoke and mirrors when it comes to condos in Pattaya and Jomtien.

Yeah, but you can't point that out. The doom mongers and Pattaya haters will never remember that part.

[thairay]

how are they going to complete the condos with no cambodian workers left here?

[morrobay]

So 3,800 units were launched / completed first half 2014 and that is 40% of the 9500 completed second half 2013. Down 60 % 3800/9500 = 40%

28,200 units launched in Pattaya are expected in second half of 2014 plus 18,850 units completed in Jomtien for second half of 2014.

So the total for just Pattaya for all of 2014 is 3,800 + 28,200 = 32,000 completed condos for 2014.Estimate of 2013 based on 9500 for second half is about 20,000.

2014 - 32000/2013- 20000 = 160 % That is the total for 2014 is about 60% greater in 2014. If the 18850 units in Jomtien are included in just second half of 2014.

Then 50,850 completed/launched 2014

[masuk]

Is it really because of political turmoil ????? Or maybe people really got bored with pattaya ..

...or is it due to the type of people attracted there?

[lucjoker]

Is it really because of political turmoil ????? Or maybe people really got bored with pattaya ..

If tomorrow they change the rules and you can not own a condo in your name ........olla lalla !

And believe me ,they can !

look at what is waiting for the house owners.......their only choice : give it away to your wife (although this is also against the law !)

Farang-dom is almost finished ?

[Benmart]

Is it really because of political turmoil ????? Or maybe people really got bored with pattaya ..

... Yes, bored and also informed about some aspects of life here and facts of foreign ownership.

[Benmart]

And yet, they keep on building like there is no tomorrow and that the whole of Russia,

China and other countries will be buying condos there, I foresee a super humongous

slump in the very near future in Pattaya RE, the smallest problem/scare there will

the RE market tumbling down like a bolder of a mountain...

i foresee to see postings like yours for years to come as i saw them for the last eight years. not limited to Pattaya real estate but also the Thai economy as well as the Baht falling into an abyss "like a boulder off a mountain".

keep up the good job amusing me

Google, "Forbes Thai economy 1997".

Granted the economic collapse was regional and not just Thailand, but some of the same indicators from 1997 are being replayed today.

Those affected in 1997 were hardly amused.

Edited September 9, 2014 by Benmart

[ldnguy]

And yet, they keep on building like there is no tomorrow and that the whole of Russia,

China and other countries will be buying condos there, I foresee a super humongous

slump in the very near future in Pattaya RE, the smallest problem/scare there will

the RE market tumbling down like a bolder of a mountain...

People have been saying this for years. The developers have adjusted the supply to take account of less demand. If you read the article you'll see that 60% less condos were built.

I'm not sure how they calculate take-up though. Take-up over what period of time? And what happens to the condos not sold? Are they included in the figures somewhere. e.g. developer builds 100 condos and take-up is 73%, so 73 sold, 27 not sold. Another developer does the same, so now 54 not sold. So there are more and more unsold condos over time? Or have I misunderstood this?

For those that think developers should stop building, why do you think that? They own land and obviously make a profit, so why would they stop? Would you close a successful bar you owned just because there were too many bars in town? Some on here don't understand even simple economics yet think they are qualified to comment.

[ldnguy]

I recently heard of one condo building that was putting up 2Bedroom, 2 Bathroom units for 6 million Baht in an astounding area of 50 sq, mtrs ! Who would want to live in that, I ask myself ? You would have to exchange the proverbial swinging cat for a swinging gerbil

I think many Thais buy these as a weekend place or to rent to tourists on a short-term basis. I don't think condos this size are targeted at people who want to live in them. But some people do actually like smaller places because that is what they're used to. Personally I think a 1-bed place needs to be minimum of 55 sqm and a 2-bed a minimum off 70 sqm.

[ldnguy]

Without reliable data on transaction volume (actual sales, and not smoke and mirrors), transaction prices (actual, not headline prices), vacancy rates, approvals granted for future developments, details of overall infrastructure plans and reasonably accurate completion dates, it is impossible to have any meaningful idea as to where the market is headed, where it now stands, and sometimes even, where it's been.

If you need it, indeed to use it, don't mind being locked to one location and can't find better investment options, buy. If not, don't.

T

That is just nonsense. I've never know any of that info for my UK properties but have also had a pretty good idea of where the market is headed. It's fairly easy if you pay enough attention to the market in general. If I gave you all those figures I still doubt you'd be able to tell where the market was headed.

[ldnguy]

Easy Visas and clear rights for foreign might help to sell

We already have both of those things. Visas are pretty easy to get and foreigners have very clear rights to buy condos in certain areas of Thailand, including Pattaya.

[ldnguy]

As often in these articles I have difficulty in following the numbers.

"(Kongcheep) said about 3,800 units were launched in the first six months"

Compared to 47,000 scheduled to be completed in the last six months.

"There are more than 28,200 condominium units under construction in Pattaya city that are expected to be completed in second half of 2014," he said. "Nearly 18,850 units are scheduled to be completed in the second half of 2014 in Jomtien".

Let me help you...

3,800 units launched in the first 6 months - during 1 Jan to 30 Jun developers announced that they will build 3,800 condos (units) sometime in the future.

47,000 scheduled to be completed in last six months - during 1 Jul to 31 Dec, 47,000 condos that are already under construction will be completed.

The 47,000 figure is made up of 28,200 condos in Pattaya City and 18,850 in Jomtien.

Easy.

Is there something specific you don't understand?

[ldnguy]

Pattaya condo market shrinks 60 percent in first half

As new condo sizes are - perhaps some correlation between these issues ?

The smallest units I've heard of are 24 sqm.

really, who buys a 24 sq meter condo? one would have to go outside just to change his mind. My master bath is 24 square meters and I wouldn't want to eat, sleep in there either.

Someone who uses it for weekends instead of a hotel. They prefer their own place near Bangkok and don't want to stay in a hotel. There are plenty of people in Bangkok that own condos like this in Bangkok, Hua Hin and other places.

[ldnguy]

really, who buys a 24 sq meter condo?

Thais do, for weekend breaks. Personally I think they are bonkers.

No more bonkers than someone paying for a 24 sqm hotel room. If they use it regularly it would work out cheaper than a hotel in the long run. Quite suitable for the Bangkok crowd who get away on weekends. I wouldn't buy one though.

Edited September 9, 2014 by ldnguy

[ldnguy]

Is it really because of political turmoil ????? Or maybe people really got bored with pattaya ..

If tomorrow they change the rules and you can not own a condo in your name ........olla lalla !

And believe me ,they can !

look at what is waiting for the house owners.......their only choice : give it away to your wife (although this is also against the law !)

Farang-dom is almost finished ?

There is no law in Thailand that prevents you buying a house for your wife. FACT. You can give your money to whoever you want and they can buy a house if they want. There are no laws whatsoever that prevent you giving your money away.

[Thakkar]

Without reliable data on transaction volume (actual sales, and not smoke and mirrors), transaction prices (actual, not headline prices), vacancy rates, approvals granted for future developments, details of overall infrastructure plans and reasonably accurate completion dates, it is impossible to have any meaningful idea as to where the market is headed, where it now stands, and sometimes even, where it's been.

If you need it, indeed to use it, don't mind being locked to one location and can't find better investment options, buy. If not, don't.

T

That is just nonsense. I've never know any of that info for my UK properties but have also had a pretty good idea of where the market is headed. It's fairly easy if you pay enough attention to the market in general. If I gave you all those figures I still doubt you'd be able to tell where the market was headed.

"Fortune brings in some boats that are not steered." William Shakespeare

We all know someone who got lucky and thought he was a genius. If you don't know someone like that, you're the one.

Will well-informed investment decisions lead to losses? Sure, that happens. Will investing based on intuition and guts (or "paying attention") lead to gains? That happens, too.

I would prefer the former approach. It's not like there is a shortage of investment opportunities around the world. Why pick opaque markets unless the returns are incredibly high, which in Thailand, isn't the case.

T

[SNGLIFE]

The possible saving graces (in no particular order):

1. Baby-boomers retiring en masse who can't afford to do so in their homeland. Huge numbers of them are flocking and are planning on retiring to LOS. I reckon more are going straight to the provinces rather than the old route via a sin city. Sin cities are way more expensive these days.

2. Chinese males are short ~25,000,000+ brides due to their one child policy. Not a stretch to see some of that demand satiated by Thailand. For many, 25 sqm is just fine.

3. Chinese middle class growth and demand to invest in condos outside China. China has entire cities of condos already built with no residents in anticipation of future Chinese demand. It is not a stretch to think such investors may find their way to Thailand. Access made easier by the planned rail projects linking China to Rayong and this Pattaya.

4. Laos will gain access to Thailand's ports via rail. Not a stretch to foresee a boom in Laotian middle class and wealthy families getting a place along Thailand's coast.

5. The common sense fact that if condo developers were interested in farangs, they would make them larger knowing that is what farangs want. They aren't and so one must surmise that they are catering to and planning for growth coming from Thais and ASEAN countries.

[jacko45k]

Except in Jomtiem where it was higher???

Does the possibility that there is limited space to build more in Pattaya proper not self-limit new construction?

There is no shortage of adverts for condos, and a few too many cement trucks driving around the centre of the city blocking traffic.

They have managed to clear away some old decrepit buildings here and there to build, and there certainly are plenty more to have a go at, but there will be ownership issues, and high price expectations for the land.

Infrastructure is a dire need..... public services, transportation, roads, time to take a breath and consider where this is going.

[Naam]

And yet, they keep on building like there is no tomorrow and that the whole of Russia,

China and other countries will be buying condos there, I foresee a super humongous

slump in the very near future in Pattaya RE, the smallest problem/scare there will

the RE market tumbling down like a bolder of a mountain...

i foresee to see postings like yours for years to come as i saw them for the last eight years. not limited to Pattaya real estate but also the Thai economy as well as the Baht falling into an abyss "like a boulder off a mountain".

keep up the good job amusing me

Google, "Forbes Thai economy 1997".

Granted the economic collapse was regional and not just Thailand, but some of the same indicators from 1997 are being replayed today.

Those affected in 1997 were hardly amused.

i was interested in some Jomtien properties early 1998 but did not buy because foreign condo ownership was not yet implemented. a friend of mine was less skeptical. he bought a 3-bedroom flat for $82,000 and sold it in 2004 for $365,000

[KittenKong]

i was interested in some Jomtien properties early 1998 but did not buy because foreign condo ownership was not yet implemented. a friend of mine was less skeptical. he bought a 3-bedroom flat for $82,000 and sold it in 2004 for $365,000

I wonder how much of that price difference was due to to exchange rate variations? And I wonder what it would be worth today?

I paid less for my condo than the original buyer paid for it when it was built. And I expect when I (or more likely my inheritors) sell it that it will be worth less than I paid for it.

[KittenKong]

Does the possibility that there is limited space to build more in Pattaya proper not self-limit new construction?

Go to the top of any high-rise building in Pattaya and look out. There is masses of undeveloped or underdeveloped land, even right on Beach Road.

Certainly in Jomtien there is many times more empty land than in Pattaya.

[jacko45k]

Does the possibility that there is limited space to build more in Pattaya proper not self-limit new construction?

Go to the top of any high-rise building in Pattaya and look out. There is masses of undeveloped or underdeveloped land, even right on Beach Road.

Certainly in Jomtien there is many times more empty land than in Pattaya.

There is a single block of empty land on Beach Rd that has been there for 20+ years yes, but free space in the Beach Rd, Sukhumvit, Nua, Tai rectangle is becoming scarce. It just seemed obvious that at some point all the easy to acquire, empty and easy to build lots would become limited and hence new construction roll off. There are also smaller condos being built, below 40 sqm. And at 62,000 baht/sqm, and increasing annual service charges not everyone can afford a condo.

[JSixpack]

Is it really because of political turmoil ????? Or maybe people really got bored with pattaya ..

If tomorrow they change the rules and you can not own a condo in your name ........olla lalla !

And believe me ,they can !

look at what is waiting for the house owners.......their only choice : give it away to your wife (although this is also against the law !)

Farang-dom is almost finished ?

There's STILL just nothin' so satisfying as knockin' back few Changs, maybe smokin' some good weed, experiencin' a Revelation, and then hittin' the ol' keyboard to pound out the latest TV Prophecy Of Doom.

Next: confiscation of all the banks accounts!