It’s certainly a buyer’s market out there, there’s no denying that. Given the current world climate, it stands to reason that many people will need to be freeing up capital to survive. I believe there are also quite a number of expat condo and house owners who feel that travel will be restricted for many moons to come and they may as well sell up now and take their losses.
But how long can a ‘buyer’s market’ really last?
The vast majority of agents I’ve spoken with have recently been very busy with both buyers and long-term renters. The buyers we’re seeing are a pretty even mix of long-term residents who are now seeing the opportunity to take advantage of the many hot deals around, as well as recently released from quarantine regular visitors who are also seeing great opportunity.
As mentioned, rentals are quite steady as well – surprising as there doesn’t seem to be that many people about. But rents have dropped considerably (up to 50% in some instances) with landlords seeing the chance to take lower rent a better option than sitting on an empty property. And the inquiries we’re receiving are 95% for long-term leases – much different than the many short-term inquiries we normally receive.
Currency exchange rates are also working in buyers favour. The Euro and US dollar have seen significant gains of late, but the one I’ve taken biggest notice of is the Sterling. At the time writing the British Pound Sterling is 42.20 to the Thai Baht. Compare this just a month ago when it was lingering around the low-39s…an increase of 8% is nothing to be sneezed at. Money markets have always been a bit of a mystery to me – how the Thai Baht has remained so strong during times of serious political, social and economic turmoil is a question for the ages. I suppose low national debt and mega-reserves of USD has helped, but that can only carry so far when a country’s GDP is in negative flux, tourism is plummeting and neighbouring SE Asian countries are making it more and more attractive for international manufacturing. It was pointed out to me that perhaps the UK’s rapid response to getting their population vaccinated may have something to do with it.
Whatever the reason, so long as Thailand can roll-out their vaccine program as intended, I believe we’ll see many more Brits vacationing and purchasing property here in the coming year.
Back to my original query – how long can a buyer’s market really last?
The rate at which these fire sales are getting snapped up is very impressive. We’ve had several listings lately that have been sold within 24 hours of listing (not all necessarily by us, unfortunately). But it just goes to show the vultures are out, and they’re not buying cheap for no reason. They know they’re not going to see great rental returns at the moment – but tough times don’t last forever, and savvy investors know that this market will bounce back, and I believe it will be sooner than later.
With massive vaccine programs taking place all over the world at present, international travel will be opening back up before we know it, and as I’ve been rambling on about the past 6 months, people will come back here in droves.
The world is now into its 2nd lockdown winter. People are fed up. People are depressed. And people are really starting to see how miserable life can be when you’re locked down in your home in frigid winters with no social interaction and doomsday news blaring through the TV.
Was lockdown in Thailand fun? Not particularly compared to the usual hedonistic fun we’re used to having. But for Europeans, North Americans, Chinese, etc. with the means behind them, being locked down in tropical climes where you may be confined to your home with your pool and garden is certainly a far more pleasant option than what they’re dealing with now.
And I believe this is also why we’ll be seeing (and are already seeing) a move toward houses rather than condos with buyers in the coming years. In a worst-case scenario of Thailand going into a full lockdown again, would you rather be trapped in your room with no access to the beach, bars or even your communal pool, or relaxing in your own tropical paradise home with private pool, garden, etc.?
In the past few weeks, we’ve seen a big increase in house hunters with very healthy budgets looking in projects such as Siam Royal View, Jomtien Park Villas and View Talay Villas – both from European and Chinese buyers.
My own project, Serenity Jomtien Villas, has also seen a lot of interest and inquiries from local and overseas buyers (gotta get the plug in, sorry). Our showrooms are now underway after finally receiving our IEE development license, with the first homes ready for viewing around July of this year. We’ve currently got a great promotion on until the end of March with either a free full furniture and décor package or a one million Baht discount. There are still some great prime plots left so get in touch for more info and a site tour.
So, take advantage of these great times for buyers. They won’t last forever. I know it all still seems a bit doom and gloom, but even the most negative naysayers must admit there is certainly some sunshine on the horizon.
By Stu Sutton
Stu Sutton is managing director of Jomtien Property and has worked exclusively in the Pattaya/Jomtien real estate market for 16 years. Please feel free to contact him with any queries, compliments, or good jokes at 086 108 6575, [email protected] or visit Jomtien Property’s website at www.jomtien-property.com