By and large the last few months leading up to the start of high season have been indifferent for the real estate professionals in Pattaya. An unsettled government, whiffs of scandal and uncertainties about how the land office will view applications all combined to affect some – not all – areas of the market. So how do real estate agents view the coming of the high season? Do they anticipate and upturn or more of the same? John Davids spoke to half a dozen of them just days after the season got underway…
Perhaps not surprisingly the coming of the high season is being greeted with a mood of optimism among the agents I spoke to. Pessimism in business is no good whatever your line of work. It couldn’t be more true of the property business.
But is the optimism well founded and based on sound reasoning?
Based on my chats with the six I believe the answer is yes. But I would qualify that by saying that the picture is looking brighter in some areas than others.
For example, interest in new condo developments remains high. The opportunity for “own name” ownership while the first 49 per cent of the apartments remain on the market is undiminished. Remember, up to 49 per cent of any condominium block can be owned by foreigners without needing to resort to other, more convoluted ownership routes.
"It's difficult in the second-hand resale market at present," said Heiner Moessing of Siam Properties. “I’m finding that buyers are prepared to spend 20 or 30 percent more on new condominium developments to secure an ‘own-name’ property.”
Heiner says he is definitely noticing an increased interest in new properties. “The tendency is toward newer projects even if they are at higher prices,” he added.
Heiner continued: “Our website is bringing in a lot of enquiries, but we are well established and known within the market. We see our success as a combination of experience and knowledge of the Pattaya property market, a perceptive understanding of our customers’ requirements and above all … integrity.”
“We had a sleepy October but you get a couple of months like that each year. Now things are looking quite nice and I believe interest will go up over the next few months,” Heiner concluded.
Heiner’s thoughts on the prospects for the high season are shared by Julian Stanley of Pattaya Dream Homes. “I’m absolutely, positively optimistic about the high season,” said Julian who can point to the statistics of ‘hits’ on his web site as the reason for this.
Hits on the site for condo searches were a little under the 2,000 mark on the day I spoke to him. “I would say that about 80 per cent of the enquiries I’m getting, web hits, emails or telephone calls are to do with condos,” he said.
“We have many potential foreign buyers arriving here over the next three-four months. I don’t know if this is a natural upturn based on the season or not.” Julian’s company only started in January this year so he has
not previously experienced the low to high season transition. “I’m optimistic, but I’m not ordering the Mercedes just yet,” he joked.
On a more serious note, what did he think of other areas of the market? “The market in stand-alone houses is stagnant at present. Major developers have stopped pre-building and are just trying to sell from plans which doesn’t make our job easy. Much better for us are developments like The Meadows from Town & Country where they have built many of the units. That’s the class way to go in my book. People can see what they are buying.”
Stuart Daly of Pattaya Realty was also noticing a lot of web-based interest with “serious buyers telling me they are coming over,” he said.
“After the year we have had with no stable government and hints of scandal I’m glad we are through that and can look forward with confidence,” he added. “Things are looking up and I’ve been speaking to Bangkok-based agents who are also hopeful.”
Any trends emerging? “New developments are hot but I don’t see any special trend as such. Condos are doing a bit more for the own-name aspect. But we are still selling houses. I’ve noticed more buyers putting the property in their Thai partner’s name but protecting themselves by taking out 30 year leases and signing agreements that ensure that the house cannot be sold without the agreement of both parties.”
When I heard this I winced a little. But, after putting down the phone, I reflected that if that was the only way I could own a house (my preference), as opposed to a condo, how bad would that be? I’m in my 50s and were someone to offer me a guarantee of living another 30 years I would bite their hand off in acceptance. If my current partner could stay with me for 30 years (and previous convictions in the matrimony department make that a big ‘if’) I reckon she would probably deserve to have the house when I’m gone.
But each to his own and I am not trying to influence prospective buyers by saying the above. The opportunity to buy in my own name would remain my first, second and third choice.
Another agent who reported a shift in attitudes on the ‘own-name’ front is Einar Olgeirsson of Pattaya General Real Estate. “With houses some buyers are looking at the perpetual lease route,” said Einar. “It’s like signing a prenuptual. And there are still other options people can be looking at if they want a house.”
He added: “We have done all right considering the problems we’ve had lately. Of course, things would be a lot better if foreigners could buy as they did before. There are still a lot of things that need sorting out, but I’m pretty optimistic.
“People are buying at the cheaper end, such as townhouses. That way the commitment is not high and it allows them to get a foothold in the property market. If they settle to the Thai way of life then they can upgrade later. If not, the property is still affordable for other purchasers, including Thai people. I believe this to be a sensible approach in these uncertain times.
“We have people booked to come here in November, December and January and we’re getting a lot of emails, particularly regarding new constructions that have availability within the first 49% own-name category.”
When I spoke to Craig Rhodes of Country Properties he, too, was in a positive mood. “I’m okay, feeling pretty good at the moment,” he said. “Apartment sales are good and people still want to be here. That’s the main thing.
“We started out in land brokerage but have pretty much switched our emphasis to apartments now. With land it’s difficult at present. We’ve sold a couple of plots lately. If someone comes to us wanting to buy land we tell them we can do it but we don’t know what the land office will say when they get there. We’re not hiding anything and we are strongly recommending that buyers take a third party opinion, from a lawyer, perhaps, before they go too far down the line.”
He concluded: “You have to get on with things and make the best of what’s going on. I’m encouraged by our apartment sales.”
Claus Dieter Meyer of Thaiproperties.biz said: “Low season is low season, like every year. Now we are getting more enquiries and I’m optimistic. I’m sure the high season will see an improvement especially in January and February.”
Claus’s company is also focussing more on condos. “I think people are looking a little concerned about the restrictive regulations at the land office. So they are looking a little more to condos, especially projects where you can still own in you own name.”
He concluded: “If there was to be a change in the law everyone would be happy.”
So, as you can see – a recurring theme in most of my conversations is the question of own-name ownership and a possible change in the law. How can this be addressed? Well Pattaya has more bizarre rumours circulating than I care to try to count. Indeed, with the editor’s permission, I might regale you with six or seven in a future issue. But for now, I’ll concentrate on one – namely the possibility that a Thai government might one day relent and widen the criteria which allows foreigners to own a rai of land for their own housing purposes. At present you need to have received an inheritance or have a seriously large amount of money to invest here – baht 40 million.
This ‘one rai’ rumour was repeated to me a couple of times during my ring-around and is a sure indication of where agents would like to see things headed. I don’t know all the ins and outs of this debate but it seems to me incongruous for Thailand to want outsiders to invest in the country but then make it difficult for all but the very rich to live here.
Of course, a balance must be struck which means that prices will not become prohibitive for Thais themselves. We don’t want a situation such as the one that developed on the Isle of Man in the Irish Sea. Because the island is a tax haven many monied people want to live there. House prices have rocketed to such an extent that the Manx people themselves cannot afford to buy on their own island.
There does not appear to be a ‘magic wand’ that can be waved over the ownership question to satisfy all parties … but a solution needs to be found. And the sooner the better or it maybe it will take more than a change in the season to improve the housing market.
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