Rising property prices and shrinking home supply: a challenge for the housing market
In the post – covid period, clear trends have emerged in the Pattaya real estate market. Both in Greater Pattaya but also in rural areas, property prices are rising inexorably while the supply of available homes is continuously shrinking. This development poses certain challenges to both buyers and renters and raises questions about the future of the housing market.
In the case of condominiums, on the other hand, prices are also continuing to rise, but the supply is only shrinking marginally. However, here too, the supply of oceanfront apartments is shrinking, and these apartments are seeing the highest price increases.
Increase in real estate prices:
The rise in real estate prices has become a widespread phenomenon. In many regions, prices have risen sharply in recent years, making the dream of home ownership a distant memory for many people.
In Pattaya, however, prices for houses are still very reasonable compared to many other countries such as Germany. Already from 120,000 euros there are quite nice houses.
The increasing demand for housing is another decisive factor for the rise in real estate prices. One reason, among others, is the great demand from buyers in Russia, Ukraine and China. Many customers from these countries are trying to build a new future in Thailand. But also many Germans try to shift their center of life to Thailand due to the current developments and problems.
At the same time the attractiveness of real estate as an investment opportunity is increasing, which leads to an increased interest of capital investors. This is also fueled in Thailand by the fact that speculative gains are tax-free.
While demand is increasing, the supply of available homes is falling short of needs. There are several reasons for the shrinking supply of homes. For one, many existing properties are rented long-term or used as vacation homes, limiting the market for prospective buyers. Second, the lack of small building lots makes it difficult to build new homes. (Large lots are plentiful, but the subdivision of land into small lots is severely restricted by law in Thailand).
We expect prices to continue to rise in the future, especially due to the development of the Pattaya economic region:
An emerging center for economic development
The east coast, and Pattaya in particular, has developed into an up-and-coming economic region in recent years. Through targeted measures and investments, the government has recognized the region’s potential and launched various initiatives to promote economic development. The development of the East Coast economic region promises a variety of opportunities and holds the potential to become a major economic center in Southeast Asia.
Investments in infrastructure
In order to drive the development of the economic region, significant investments have been made in infrastructure. The expansion of roads, rail links and the port has improved the region’s connectivity and facilitated accessibility for businesses and investors. This has led to increased demand for commercial real estate and industrial facilities.
Pattaya’s has traditionally been known for its tourism sector. However, in recent years, there has been increased industrial diversification. The government has provided incentives to attract various industries to the region, including automotive manufacturing, electronics, logistics, and renewable energy. This has created a broader economic base and reduced dependence on the tourism sector.
Development of special economic zones: A key part of the expansion of the economic region has been the creation of special economic zones. These zones offer companies tax advantages, simplified business processes and improved infrastructure. This encourages investment and the establishment of international companies. The special economic zones have accelerated the growth of the East Coast and encouraged the creation of new jobs.
Promotion of the tourism sector
Although efforts are aimed at reducing dependence on the tourism sector, it still remains an important economic factor in the region. The government has taken steps to promote tourism and strengthen Pattaya’s image as a tourist destination. Improvements to tourism infrastructure, promotion of cultural and nature tourism, and enhancement of the quality of services all contribute to the region’s attractiveness.
The expansion of the East Coast Economic Region has already had a noticeable economic impact. The creation of new jobs, particularly in the industrial sector, has contributed to an increase in income levels and a reduction in unemployment. In addition, new business opportunities have opened up for local companies that are benefiting from the increase in demand.
The expansion of the East Coast Pattaya economic region has contributed to the positive development of the region. Targeted investment in infrastructure, promotion of industrial diversification and the creation of special economic zones have helped make Pattaya an emerging center for economic development. With continued growth and new opportunities, the region is attracting investors, businesses and skilled workers, cementing its place as a major economic region in Southeast Asia.
All of this naturally leads to increased demand for housing and makes real estate investment attractive.