In the past, when people in China thought of Pattaya, they thought of a brightly-lit, nocturnal city, but that has changed quite a bit in recent years. In Chonburi Province, where Pattaya is located, the government has been actively developing industry in recent years, introducing foreign investment and developing into 12 industrial zones. The two industrial cities of Amata and Eastern Seaboard have attracted a number of multinational automotive companies, including General Motors, Mastercard, Ford and other brands move in. Emperor Real Estate, a Hong Kong, China-based agent, estimates that there are approximately 10,500 expatriate employees on the east coast of Thailand, and the demand for local housing is also high.
Pattaya is a popular retirement destination for many foreigners, and in recent years Thailand has introduced a retirement visa scheme for foreigners aged 50 or above. If you have no criminal record and have 800,000 baht (approximately RM94,969) or more in a local account, you can apply for a 1-year residence visa, renewable annually. The local government takes good care of the retired, and there are a number of large health centres and hospitals in the hope of providing "one-stop" services for the elderly.
The executive director of Emperor Real Estate, Mr Chan Cheuk Ming, said: "Pattaya is a great place to visit in terms of living index and property prices. The average is about 25% lower than Bangkok, and with Pattaya being a holiday paradise and the political atmosphere not as strong as in the capital, Bangkok, the chance of riots is slimmer and suitable for retired people."
K. Min, marketing manager of Riviera Group, a Pattaya real estate project developer, said foreign investors account for the half of the local condominiums sold, while the other half are the locals, mostly from Bangkok, buy property in Pattaya as holiday homes. the ex-pats are mainly Europeans, who stay in their countries for six months, choose to come to Pattaya in the winter to enjoy the sun and beaches. If they don't have property here, they usually choose to rent an apartment.?
10% annual increase in property prices.
Declining rental returns in long-term
According to Global Property Guide, while property prices in Hong Kong, China, rose 1.6 times in the decade since 2003, property prices in Thailand rose only 24.2% in the same period. Apart from the notion of catching up, the most important thing for Hong Kong Chinese to buy property abroad is a good rental return. Chan said that Pattaya condominium rental returns are around 7 to 8 per cent. However, due to local property prices are increasing by about 10 per cent per year, he said, rising rents may not keep pace and will affect returns.
Pattaya is not only a popular tourist destination for Hong Kong Chinese, but also for Russians who like to escape the cold weather in the region, among the richer group and would even buy a property locally as a second home. However, the Russian currency crisis has led to a sharp drop in Russian tourist numbers, which fell by 50 per cent in the middle of the year, according to the Tourism Authority of Thailand. In addition to the decline in tourists, many Russians who had already bought properties earlier had to cut off their mortgage payments. Chan Cheuk Ming believes that there are undoubtedly some concerns about the future of property prices but replaced by the purchasing power from China, is expected to absorb some of the listings.
Major developers take Wongamat Beach
Chan Cheuk Ming said that to buy property in Pattaya, you need to select some quality locations in order to rent units more easily, "foreigners are not like Hong Kong Chinese who want to buy something when you go shopping, but instead, they prefer the peace and quiet and reach the beach in a few minutes on foot. They know how to enjoy themselves and the apartment must have a gym, clubhouse, etc.". Downtown Pattaya has become "too busy", he continued, suggesting investors to pick the Wongamat Beach, where several major developers have buildings in the area. He pointed out that the occupancy rate of the apartments in the district was 80% to 90%, and they were all on long-term leases of more than one year. If the target tenants were employees of foreign companies, open-plan units are more appropriate; if you want to rent to retirees, two-bedroom units are easier to rent.
Be careful if you have to pay more than half of the mortgage for uncompleted properties.
Pattaya's property market is not as mature as Bangkok's, and the quality of developers varies, as Chan Cheuk Ming has seen small developers fail before. End of the day, so choose your developers carefully. It is more prudent to pick developers with a track record, or some listed companies or foreign affiliates.
Riviera Group has two projects in Pattaya, one of which is uncompleted and is located on Wongamat Beach, K. Min said 82% of the units in the project have been sold and are expected to be occupied in two years. The company provides interest-free loans to overseas buyers for the first two years of this uncompleted project, amounting to 35% of the property price, plus 15% of the contract price at the time of signing, with the remaining 50% to be paid upon completion.
The 43-storey building, divided into north and south blocks, offers open-plan, one-bedroom and two-bedroom units ranging in size from 27sqm to 84sqm, with an entry fee of 2.59 million baht (about RM307,464) for the smallest unit.