Pattaya Property Market

[Lazy Sod]

I've been waiting for prices to drop following the government clamp-down on using nominee based companies to buy property ('cos I'm planning to buy a holiday home or some land in the wife's name with a usufruct).

But according to the agent web sites that I look at the prices have not dropped at all. On the one hand I hear the foreign property market has virtually ground to a halt (except for the 49% of condos which can be owned by foreigners), but on the other hand I'm seeing no bargains.

What's going on?

[OldAsiaHand]

Property prices in Thailand seldom if ever fall. Even in 1997 when the economy effectively collapsed, prices didn't fall significantly across the board. While I have no doubt that a few people sold property for less than they would have liked during that period, most sellers simply stopped trying to sell at all. What resulted was a sharp decreased in activity but, on the whole, little change in prices when some property actually got sold.

Edited October 3, 2006 by OldAsiaHand

[fxm88]

An illiquid market with huge bid-offer spreads. Only those desperate to buy or sell get hosed -- and a "motivated" Thai seller is as rare as a left-handed pair of scissors.

[eljeque]

Because enough of the owners are not in dire straits.... Yet!! And then again, they may not be in the near future either. Yes, there are a lot of homes that have been on the market for a long, long time, but the owners will not drop their prices because they are not in that much need of the cash.

To actually bring prices down, one would need to see a drying up of Europeans coming out here buying property -- like a large interest rate increase in the Euro and the Pound. But, many of the buyers are old enough that this is not investment money, but is instead spare cash, and they are not bothered by waiting. You simply need to go out and find the most desparate sellers.

There are always a lot of people going broke in Pattaya. Go and find one with a house.

Good luck.

[Tarqin]

Pretty much as said. Guy has bought condo a few years ago for say $50k someones now told him its worth say $150k so he's stuck it on the market for that.

Costs nothing to get listed and who knows there may be a big enough fool come along to buy at that price if not it just remains listed. Interesting to check the websites, the same condos listed for 2+ years.

[libya 115]

Because enough of the owners are not in dire straits.... Yet!! And then again, they may not be in the near future either. Yes, there are a lot of homes that have been on the market for a long, long time, but the owners will not drop their prices because they are not in that much need of the cash.

To actually bring prices down, one would need to see a drying up of Europeans coming out here buying property -- like a large interest rate increase in the Euro and the Pound. But, many of the buyers are old enough that this is not investment money, but is instead spare cash, and they are not bothered by waiting. You simply need to go out and find the most desparate sellers.

There are always a lot of people going broke in Pattaya. Go and find one with a house.

Good luck.

All the above very true: Search for someone desperate to sell, someone in deep financial trouble.

Plus: Buy a shell, rather than a fully furnished show house/apartment. You will save a lot by buying a visually unattractive property.

[wilko]

An illiquid market with huge bid-offer spreads. Only those desperate to buy or sell get hosed -- and a "motivated" Thai seller is as rare as a left-handed pair of scissors.

I actually own a pair of left-handed scissors.....asking price 1.5 million and they're yours??

[bmanly]

You are all pretty much right. The condo building I live in is half empty. Only shells sitting there for 12 years since completion. Who owns them? Thai speculators. The other half is owned or tenated by 50/50 farang/thai. There is the real price of these condos and then the price what owners think it is worth. When these owners put their condos on the market that is when the reality of it's real price sets in. They simply want too much and can not sell. There is of course the chance of snagging the silly farang who does not know the prices. The situation is the Thai speculators are waiting for more, they are not in financial trouble and the few farangs that are selling are just asking too much. As others have said you have to find someone desperate or willing to sell at the true market price.

If I was interested in buying a condo I would pick my 3 favourite buildings and I would not use any real estate agents. I would walk the floors, talk to the cleaners, maintenance guys and the locals and ask if they know of anyone who might want to sell. A friend of mine did just this and ended up buying a condo from a Thai for the right price. He slipped the maintenance worker 10,000 baht for finding the seller. The seller was on nobodys books and everybody was happy.

[gharknes]

I've been waiting for prices to drop following the government clamp-down on using nominee based companies to buy property ('cos I'm planning to buy a holiday home or some land in the wife's name with a usufruct).

But according to the agent web sites that I look at the prices have not dropped at all. On the one hand I hear the foreign property market has virtually ground to a halt (except for the 49% of condos which can be owned by foreigners), but on the other hand I'm seeing no bargains.

What's going on?

because there are stupid people giving them what they are asking, probably about 50% too much

[thebounder]

There are various comments to make in relation to the initial query.

Firstly, some sellers are dropping their prices. We have had some real bargains on our books, but like all good deals they tend to go quickly. Therefore to get such deals, you need to register you interest with a trustworthy agent who is not going to take the good deals for himself.

Secondly, there has been a further policy change at the Land Offices, so companies set up to buy land for farangs can now buy as before so long as certain conditions are met. The land must be 1 rai or less, the company must own only the one piece of land, etc.

Thirdly, there remains a lot of confidence in the Pattaya market. At the end of the day, Pattaya is only 100 kms from Bangkok. It is a retirement centre for lots of Westerners, it has seen massive increases in "new World" visitors in recent years, the Eastern Seaboard is the fastest growing area of Thailand commercially with 38 industrial estates (for which Pattaya is the farang centre), etc. The city is developing and has a lot to offer over and above the seedy side of the town. Still more top quality golf courses continue to open, the yacht clubs and marinas are booming, etc.

Fourthly, compared to places like Samui and Phuket or even overseas markets, you can still get an awful lot for your money in the Pattaya property market. Moreover, due to the relative proximity of the new airport (and the quality of the new roads built to service it), Pattaya is a far better place for a weekend home for wealthy individuals living in Asian capitals such as HK or Singapore. For the same reasons, it is a great option for a weekend home for Bkk dwellers, who can drive here rather than getting a flight to Phuket, Samui, Krabi or wherever else they may consider.

Finally, for now at least, Thailand has no property tax to speak of and therefore once a buyer has bought a property (unless he has management charges), he doesn't have money to pay every year to keep it. Significant property tax can incentivize those with large property portfolios to sell property that is not earning income. Without that incentive lots of owners will wait till they achieve a price they consider high enough whether or not that takes an awfully long time.

[icecubes]

There are various comments to make in relation to the initial query.

Firstly, some sellers are dropping their prices. We have had some real bargains on our books, but like all good deals they tend to go quickly. Therefore to get such deals, you need to register you interest with a trustworthy agent who is not going to take the good deals for himself.

Would they do that, naughty little imps

Bet they tell fibs as well.

Sorry couldn’t resist it.

Have a nice day.

[calibanjr.]

Bounder brings up what I consider to be THE driving fundamental regarding property pricing in Thailand. With no property tax, reluctant sellers can hold their property till the end of time, with no apparent penalty. Is there a Thai phrase that corresponds to "opportunity cost"? I doubt it. Thus all those empty shells sitting for so long.

Icecubes has an interesting point about brokers as well.

[thebounder]

I can honestly say I have never bought a property in Thailand since I opened my real estate office. If I get good deals I call investors I work with regularly and individuals who have registered their interest in a similar property. There are plenty of other agents in town who do the same, although it is also fair to say some agents do buy the best deals themselves and then re-market them at a higher price, thus limiting the number of genuine bargains that make it to the open market.

There are various comments to make in relation to the initial query.

Firstly, some sellers are dropping their prices. We have had some real bargains on our books, but like all good deals they tend to go quickly. Therefore to get such deals, you need to register you interest with a trustworthy agent who is not going to take the good deals for himself.

Would they do that, naughty little imps

Bet they tell fibs as well.

Sorry couldn’t resist it.

Have a nice day.

[suiging]

The fundamentals that make Pattaya an interesting punt in the long run have not changed. Proximity to BK, hotels , golf, possibility in the future of a casino and of course the airport. Even the sex industry is in the process of change, there will always be a demand for it, but when major hotel chains buy real estate in the area for long term investment ( they are no mugs ), the latent potential is still there. When house prices take a tumble in the UK, you can not buy a semi in the West End for the price of one in Bradford. Before the bashers move in for the kill, of course Patters has it's problems ( major in the often appalling infra-structure and over development of the cheap end ), however, people who have bought here in general, live in hope that the place has a better future and are quite prepared for the bumpy ride it will take to get there.

Edited October 4, 2006 by suiging

[johnnyk]

The falangs who own in Pattaya are not the 30-day crowd.

They know the score, aren't easily freaked out and are not running for the exits.

They aren't on 30-day airport visas, they have proper longer-term tourist visas or non-immigrant O's.

Many own legitimate businesses and are in for the longer haul.

Why would they panic and sell at a loss? They aren't endangered.

Edited October 5, 2006 by johnnyk

[wilko]

The falangs who own in Pattaya are not the 30-day crowd.

They know the score, aren't easily freaked out and are not running for the exits.

They aren't on 30-day airport visas, they have proper longer-term tourist visas or non-immigrant O's.

Many own legitimate businesses and are in for the longer haul.

Why would they panic and sell at a loss? They aren't endangered.

Where will you go for your next multiple entry???

[Lazy Sod]

Some great replies, thanks for the insight. I particularly agree on the positive comments raised by thebounder, in fact these are the same reasons I'm looking for a bargain.

[Jessy]

It is still very early days. Many people will be waiting to see how things develop. Give it six months to a year for property prices to start falling. Assuming the changes stick, then it will take time for the effects to trickle down. And we still don't know how things will eventually be resolved politically.

At this stage, it could still go either way, but when the market does start moving, it will move.

[h5n1]

one only needs to look at the real estate papers/rags and see them growing monthly exponentally. i doubt anything is moving esp at prices asked for.

i love that shikbok of a house currently on pattaya city news. ugly house, bad plot of land - a kilometer from jomtien beach. howard miller is asking 12 million. not so long ago you could buy a similar home in southern california about 40 minutes from the coast for this price. absolute JOKE.

the market is going down as soon as people wake up to the hassles of living here (dirty/airport hassles/visa hassles/inflation...) it will scare off any sort of 'investment' whim.

if you buy it be sure you love it cause your gonna own it FOREVER ;-)

ps: i think the baht will drop end of first quarter 07, after the high season. esp if petrol prices rise again. add to this govt instability which bus community will eventually sour on.

Edited October 6, 2006 by h5n1

[suiging]

What you can buy in back-of-beyond Ville USA bears no relation to what you can buy in any other country. The coming decade will see the rise of Asia in comparison to the traditional powers of the West. Jolly Patters being close to an International Airport that offers the potential for weekend golf breaks ( and gambling one day ), food etc etc , all of which are attractive to the new breed of Asian middle class, is now and will be even more attractive in the future. This is where the money will hopefully come from, and what, if the powers that be get their act together ( yes.......not certain, but we live in hope ), will secure a bright future for the area. How many Chinese business men want to fly 40 mins inland in Southern California for a weekend break .................answers on a postcard ?

[Tolley]

You need to avoid the websites when it comes to real estate in Pattaya as they tend to have very inflated values for the property that is on offer.

I also would avoid the real estate agents in the main tourist parts of Patttaya...ie Second Road Beach Road etc.

There are plenty of cheapish properties around if you have a good look.

I checked out some brand new three bedroom places just on the other side of Suk road ....they were asking 1.25 million and it was on the Songtaew route to Pattaya main.

Is that cheap i would have thought so but i am not really interested in buying in Thailand as it is just easier to rent and move on when you get bored or have hassles etc

I don't see much benefit in owning property in Thailand unless you have a thai wife who wants the security associated with her own place.

It just ain't worth the potential hassle.

[billaaa777]

I don't see much benefit in owning property in Thailand unless you have a thai wife who wants the security associated with her own place.

I agree with you Tolley. If you’re not interested in living rent free in a market where there are no property taxes, where maintenance fees are very low and you make a yearly 20% return on your investment. Why would you ever buy a property here? But, then again I only bought and sold 20 condos or so last year, what do I know about the market?

[Tolley]

I don't see much benefit in owning property in Thailand unless you have a thai wife who wants the security associated with her own place.

I agree with you Tolley. If you’re not interested in living rent free in a market where there are no property taxes, where maintenance fees are very low and you make a yearly 20% return on your investment. Why would you ever buy a property here? But, then again I only bought and sold 20 condos or so last year, what do I know about the market?

Nice touch of sarcasm however I would prefer to invest in my own country where I have some rights and there is a rule of law.

Australia has a very good and vibrant property market where for those who have invested over the last 20 years or so have done very very well.

Who needs the hassles with Thailand's rules and regulations and how many people have made significant gains in Thailand in real estate?

[dsfbrit]

I don't see much benefit in owning property in Thailand unless you have a thai wife who wants the security associated with her own place.

I agree with you Tolley. If you’re not interested in living rent free in a market where there are no property taxes, where maintenance fees are very low and you make a yearly 20% return on your investment. Why would you ever buy a property here? But, then again I only bought and sold 20 condos or so last year, what do I know about the market?

Nice touch of sarcasm however I would prefer to invest in my own country where I have some rights and there is a rule of law.

Australia has a very good and vibrant property market where for those who have invested over the last 20 years or so have done very very well.

Who needs the hassles with Thailand's rules and regulations and how many people have made significant gains in Thailand in real estate?

How much are you paying in rent at the moment? The rates seem very high on some of the estate agents boards - do they actually reflect the rate paid???

[Tammi]

I don't see much benefit in owning property in Thailand unless you have a thai wife who wants the security associated with her own place.

I agree with you Tolley. If you’re not interested in living rent free in a market where there are no property taxes, where maintenance fees are very low and you make a yearly 20% return on your investment. Why would you ever buy a property here? But, then again I only bought and sold 20 condos or so last year, what do I know about the market?

I keep asking but nobody, so far, will tell me about taxes payable. You say you bought and sold 20 or so condos last year. I presume you mean you personally and not a real estate company. When you go to Land Office do they say "Sir, you have to pay (say) 25% tax" ? Or how does it work?

[jimmy5L]

An illiquid market with huge bid-offer spreads. Only those desperate to buy or sell get hosed -- and a "motivated" Thai seller is as rare as a left-handed pair of scissors.

I actually own a pair of left-handed scissors.....asking price 1.5 million and they're yours??

Bahts, Dollars or Euros??

[wilko]

An illiquid market with huge bid-offer spreads. Only those desperate to buy or sell get hosed -- and a "motivated" Thai seller is as rare as a left-handed pair of scissors.

I actually own a pair of left-handed scissors.....asking price 1.5 million and they're yours??

Bahts, Dollars or Euros??

That's entirely "up to you".....so long as it's CASH!

[pepsi666]

An illiquid market with huge bid-offer spreads. Only those desperate to buy or sell get hosed -- and a "motivated" Thai seller is as rare as a left-handed pair of scissors.

I actually own a pair of left-handed scissors.....asking price 1.5 million and they're yours??

I have a left handed mug, any chance of a part exchange ?

[billaaa777]

I keep asking but nobody, so far, will tell me about taxes payable. You say you bought and sold 20 or so condos last year. I presume you mean you personally and not a real estate company. When you go to Land Office do they say "Sir, you have to pay (say) 25% tax" ? Or how does it work?

I will answer this quickly. This subject has been discussed countless times here and you can do search and acquire all the information you want.

When you buy or sell a property there is a transfer fee. Despite all the formulas you’re going to see here attempting to explain how that fee works, I will explain what really happens. The land department has a pre-determined value for each condominium complex. (Because, nobody reports what the real sales price is to avoid paying more taxes.) Each time a condo is sold they increase the tax a little.

The only time in my experience you are really going to pay a little below or above the average transfer fee for that particular complex is when the owner your buying the condo from has owned it for over five years, then you will pay a little less. If the condo has been sold quite a few times in the past few years you will pay a little more.

Until you close on a unit there is really no way to know exactly what the tax is going to be. I have attempted to go to the land department and have them tell what the tax would be on a particular unit before I bought it. It’s never what the actual tax is on the closing date. To date, I have always paid a little less at the closing than their original estimate. But, I am sure it will turn the other way sooner or later. As best I can determine it comes down to who is calculating the tax that day and if their calculator is working properly when they are establishing the tax.

Then you have income tax. That is determined by how much you actually make and your deductions. You can use this web site for your calculations.

http://www.rd.go.th/publish/6045.0.html

[Pakboong]

I have been considering a tumble weed farm. Tumble weed seems to be all that is missing in some of these villages. I live in a village that has 70 units and less than half are occupied. I pass a village every day that has 2 out of 60 occupied. This list is endless. In my village the swimming pool is still less than half completed after 3 years. Glad I rent. Would not want to own one of these units. The builder has already sent us mail saying that everything will be turned over to a management company soon. When the builder cuts and runs, you know things are not good.