Pattaya Real Estate Market Report : While in 2019 prices did not rise or rose only moderately, the situation on the real estate market weakened in 2020. As in the past years, a differentiated picture of the real estate situation on the east coast of Thailand in general and in Pattaya in particular emerges. The Pattaya metropolitan area is also proving to be very resilient in 2020.
The real estate market and Corona
In 2020, the corona crisis has of course had a significant impact on the market, including Pattaya of course. The number of sales contracts concluded has approximately halved. This is largely due to the fact that Thailand has almost completely closed its external borders and potential buyers cannot even enter the country. And most buyers in the Pattaya real estate market are foreigners.
It is remarkable, however, that prices have not fallen at all or only slightly since the beginning of the corona crisis until today (August 2020). Only occasionally have slightly larger price reductions been observed, mostly in the condominium sector.
Pattaya Real Estate Market Report 2016
In our Pattaya Market Report 2016 we have already analysed the reasons that give so much stability to the Pattaya real estate market. This analysis is highly recommended for further reading.
Only property developers – offers are somewhat out of the ordinary in terms of discounts. Some interesting discounts were offered for new construction projects, but mostly only for projects that are still in the planning stage or where construction has just started. However, the greatest risk for buyers of such new construction projects is the current situation. Because all payments to the developer are not really secured, actually there is only the contract as security. With all other purchase contracts (used real estate) the payment is usually made step by step during the transfer and is therefore without risk.
The Pattaya property market and exchange rates
If one looks at the exchange rates or their change during the corona crisis, one notices fluctuations in the USD during the corona crisis, but the exchange rate to the Thai Baht is more or less at the level before the corona crisis.
The British pound has recently gained in value. However, the exchange rate development is likely to be linked to many factors, such as brexite and the ongoing negotiations.
If we look at the development of the euro and the Swiss franc, we can see that they have recently appreciated significantly against the Thai Baht. This makes Thai real estate cheaper again for buyers from these countries. Together with slightly lower prices a good time to buy now.
The following charts show the exchange rate development over the last 2 years:
Pattaya Real Estate: The future prospects
Pattaya is likely to gradually open its borders again. As of this month (August 2020), foreigners with an elite visa are allowed to enter the country again. This is definitely a group of potential buyers.
From October onwards, there may be travel bubbles where foreigners from certain countries may re-enter. However, all entries will be subject to compulsory quarantine for the time being – hotels with strict surveillance.
When vaccinations are available at the latest, the borders will probably be fully opened again.
And by then at the latest, the property market will pick up considerably, perhaps even with a much stronger demand, because during the closing of the borders many purchase requests will be put on hold, which can then be implemented again after the borders have opened. We ourselves have many enquiries from interested parties who would like to buy and are just waiting to enter the country in order to implement their purchase intentions as quickly as possible.
For 2021 we are expecting significantly rising sales prices.
Whoever hopes for even better exchange rates could possibly be disappointed, because the market has already priced in the possible decoupling of the Thai Baht from gold, even if there is still room for improvement in the short term.
In contrast, however, renowned rating agencies like Bloomberg predict another strong baht, based on the high trade surpluses and very high currency reserves.
About the author of this article
Tommi Jaspers Real Estate Agent in Pattaya Tommi Jaspers is German and has been working in the real estate business for more than 37 years, of which more than 19 years as a real estate consultant in Pattaya. He is a qualified real estate agent and speaks German, English and Thai. Contact Tommi Jaspers