Oversupply Of Condos In Pattaya, Rising Stockpile Of Unsold New Units And Second Hand Units For Sale As Expats Leave Thailand
Thailand’s resort city of Pattaya is currently plagued with a real estate nightmare as the property market there is not only stagnant but also facing an oversupply with signs of price dropping already starting to appear in the market.
An excessive supply of units coupled with the fact that many long term expats fed up with the local immigration policies on visas, TM 30 reportings etc, are leaving for countries like Philippines, Vietnam, Cambodia and Malaysia while putting up their units for sale is creating not only an oversupply but a totally stagnant market.
In 2018, Pattaya saw 12,739 condominium units launched with a combined worth of Bt 62 billion, a huge jump from 2,192 units in 2017.In the first six months of 2019, despite a slow market, there was another 5,836 new units put on the market.
Despite the fact that many thought that the EEC might spur a demand for units in Pattaya, it did not work in that direction and the market is simply over supplied at the moment.
The rental market is also down for condos as legal issues about short-term rentals using platforms such as AirBNB have dissuaded tourists from doing so, coupled with the fact that the average room rates by hotels in Pattaya are simply going down month by month due to the aggressive competitive nature there. Long term rentals are also down as fewer foreigners want to stay on long-term visas or retirement visas there as cost of living there is higher than Bangkok and there is not much business activities besides the tourism related industries.
The market for condominiums in the city has been slowing down since 2015. Prior to 2015, the supply of new homes and condos averaged 15,000 a year and the oversupply had softened the confidence of buyers and developers. Developers should be more cautious of new supply launches as most buyers in the Pattaya condo market are investors expecting attractive yields. Very few buyers purchased for personal use.
“As the economy slows down and yield is not as good as expected, these buyers may refuse to accept unit transfers. The new condo supply being added should not be excessive.” commented one property consultant. Some say there is at least more than 95,000 unsold units in Pattaya currently with another 39,000 plus on the second hand market and that figure is rising day by day.
To make matters worst, lots of expats who are planning to relocate are putting up their units for sale in the second hand market. Local property brokers in Pattaya are flooded with such listings and so are online line sites but there are very few takers. In desperation, some expat owners are even discounting their furnished units by as much as 30% off the prices that they paid initially for inorder to see fast sales and for them to recoup back whatever monies they have stuck there inorder to relocate to a new country. This strategy is making the condo and property market in Pattaya totally depressed at the moment.