Cosmopolitan Buyers Keep Pattaya Property Market Buoyant

While property markets across much of Europe and North
America remain in the doldrums, markets in Asia are continuing to rise
throughout most of the region.

Thailand is one of the countries which has seen rapid growth
in its property market both from its domestic market, as local banks make their
mortgage products more attractive, and also from an increasing number of
foreign buyers.  Following an
amendment to the Condominium Act in 2008, it is now possible, for the first time,
for foreigners to buy condominiums on a freehold basis in their own names.  Prior to this amendment, foreigners
could only buy property in Thailand as a minority shareholder in a Thai company
on a freehold basis or lease property for a maximum of thirty years – both
options being considered as unattractive by many potential buyers.

The city which has benefitted most from the changes to the
law is Pattaya, a resort city where property prices have traditionally been
lower than Thailand’s other top tourist destinations such as Phuket, Koh Samui
and Hua Hin.  By marketing itself
to a broader demographic than the single Western males who have been coming to
Pattaya since US servicemen used the area as a base for R&R and to tourists
from a wider variety of countries, visitor numbers have been increasing constantly
since 2009.  Pattaya is currently
on course to receive a record-breaking 8 million visitors in 2012, making it
the most popular tourist destination in Thailand after Bangkok.

While the numbers of European visitors – the majority of
which come from Germany, Scandinavia and the UK – have remained relatively
constant during the period due to the effects of the recession, the number of
Russian and Chinese tourists visiting the city has been growing rapidly over
the period.  These visitors are
also becoming increasingly active on the property market as they look outside
the borders of their own countries for capital growth, because their domestic
markets have slowed down or are now in decline after many years of constant
growth.

Due to these factors, Pattaya now has the largest and most
diverse ex-pat population in Thailand, with a tendency for each nationality to
buy in different parts of the city – Germans favouring Naklua, the British in
Central Pattaya, Scandinavians on Pratumnak Hill and Russians being most active
in Jomtien.

International property analyst, Nick Pendrell, who has just
written a comprehensive guide to buying property in the city, Pattaya
Property and Thailand’s Real Estate, commented, “Currently prices in
Pattaya are still very affordable, with one-bedroom apartments starting from
around £35,000.  Prices in the
market are increasing rapidly, however, as demand continues
to increase each year as buyers from different geographic and demographic areas
enter the market.  With rental
yields in the city averaging 8% currently, there are few signs of a bubble
occurring in the market though as most of the apartments are currently being
bought by individuals as holiday homes rather than by institutional
speculators.”

Source: Nick Pendrell