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Real-estate market in Pattaya

Pattaya development holds promises to be dynamic, well by Asian standards, of course. This resort city is quite attractive for living and relaxation. The main traffic artery of Pattaya, a six-lane highway Tappraya, that is now being constructed, is hard to miss. When completed, it will join the highway connecting the city with Bangkok. For Jomtien district, it will become an analogue of the Second Road that runs 400 m away from the beach. The city administration plans to change the traffic flow from two-way into one-way after its completion.

The erection of shopping centers in the city will not be limited by the already existing famous "Central Festival" shopping giant that occupies considerable space between the First and the Second Road in the heart of Pattaya. Plans to construct at least one more shopping megamall are being discussed. Whether it surpasses "Central Festival", is too early to say. Judging from the statements of a very influential investor group, the area between «DUSIT» hotel and the elite «COVE» condominium will be filled with elite buildings in the future. Only the most prominent members of the society will be able to settle down here. In this sense, real-estate owners on the Wongamat Beach are quite lucky since the elite status of this area will only solidify further.

The real-estate market in Pattaya, as in any other city, is represented by three main sectors: "economy-class" property with indicative prices from 30,000 to 50,000 baht; "middle-class" property of 40,000 – 90,000 baht; "elite-class" property with a very large spread in prices between 80,000 and 170,000 baht per sqm. Maximum price per sqm equals to 230,000 baht.

The main difference in price arises from the property location. "Elite Class" is usually located at the seafront and, in most cases, has an access to a private beach. "Middle class" are in the second line, so that other buildings may shield the condo from the sea and it does not have a private beach. "Economy class" are located elsewhere. Although this rule has an exception. When the land prices near the sea were relatively low, the developers were able to built multi-storey housing with small-scale apartments. Nowadays they are regarded as the last Mohicans from the outgoing era of "low prices". In the current situation, even a "middle-class" building can hardly get to the seafront. The second difference is the apartment size. For instance, if the area of ​​the smallest apartment exceeds 100 sqm, this is an "elite" project. If the area is about 28 sqm, this is the "economy-class" level. There are certainly other distinctions, but the above-listed are perhaps the most revealing.

There is practically no price differences between primary and secondary housing. The former sets up the price level, which the latter is trying to reach. The secondary housing market is a bit more flexible, because the price is being defined by a single person, the owner. The notion of price is absent on the primary housing market in this context. This market operates on the basis of "pricing policy" that takes into account many factors decisive for the branch. This system is not very flexible, but it offers certain "bonuses". Apartment can be bought in installments, or in accordance with a combined payment plan: in installments before the construction completion and by a loan afterwards. Hence the crisis in a paradoxical way appeared to be profitable for purchasers, since developers are making tempting offers in this season.

One can buy a property without the mediation of a real estate agency. If you know the language, are familiar with the current market situation and are willing to carry out long-term communications with the developer (in the case of the primary housing market), you are quite free to make a purchase on your own. However, you can hardly profit from this decision. The apartment price stays the same whether you buy directly from the developer or via a real-estate agent. The only difference is that you are left alone, without professional assistance and knowledge of tiny sale details you are quite unaware of.

Some words about this issue from my personal experience. In the middle of this year, our company has completed one of the objects which we supervised in the last three years, from the foundation laid for the first building till the completion of all five buildings. It was a large and hard piece of work that, on the one hand, was successfully accomplished, and on the other hand, granted invaluable experience and deep understanding of the roles in the conjunction "client - agent - developer". In order to define these roles better, one should say: "the customer in Russia – the agent in Pattaya – the property developer". From the gained experience it is very clearly seen that the agent is not just a mediator between the seller and the buyer. In fact, the agent is responsible for a huge amount of tasks that should be solved consecutively throughout the entire construction timeline. And as practice shows, even after the completion. This requires a special infrastructure to transport, drivers, accounting and, of course, with professional administrators, both Thai and Russian. The foregoing is worth a separate article that may shed light on the essence of things. Well, going back to the question, "whether one can buy a property without the service of agencies," the answer is simple. Everyone decides for himself.

This season will not witness the increase in prices. The market is stable and the recovery phase will not come until the next season. The recent crisis in general repeats the one from a decade ago. Back then our employees were already working in Pattaya and observed all stages of the post-crisis market transformations on the first-hand account. The market had recovered only in the third year. Provided that the current crisis is very similar, it would be naïve to expect miracles in this season. However, developers will be forced to gradually increase the prices, while the secondary housing market will remain unaffected by this trend. This will lead to a temporary increase in the price difference per sqm between the primary and secondary housing markets. This spread will gradually decrease towards the end of next year. Judging by the situation, investors will be more concerned with the location and payment plans in this season. Thanks to the crisis, one could purchase a property in a place that used to be completely unavailable. Moreover, it can be done now on the "the long-term loan" conditions, which was also impossible a few years ago.

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