If there was any doubt before, the long weekend of July 25 – 28th proved it in spades – domestic travel in Thailand is booming. The greater Pattaya area found itself swarmed with mostly Bangkok Thais lining the beaches, filling out restaurants and bars, and jamming major hotels to full occupancy. It’s times like these that we tend to see mini property booms. This may sound like a crazy notion in such uncertain global economic times, but I’ve seen it too many times here to ignore it. And the proof is in the pudding…
The vast majority of realtors I’ve spoken with the past couple of weeks have been chock-a-block with property tours and sales with predominantly Bangkok-based Thai buyers. I myself have had multiple offers on my own properties over a period of just a week’s time, with all but one prospect being Bangkok Thai.
I think two things are happening here:
1) During lockdown, everyone was stuck at home in Bangkok in their cramped quarters surrounded by the concrete jungle. Now that restrictions have eased, and with people anticipating a second COVID wave, they’re seeking a second home in more scenic environs to escape to, and
2) People are simply coming away to Pattaya on holiday as they’re long due for a proper vacation and realizing for the first time what an attractive place it can be both in lifestyle and cost to purchase a decent property.
This second reason is exactly what happened in 2011 during what people refer to as the Bangkok Floods (side note: it’s hard to believe this was now almost ten years ago). We saw a mass exodus from Bangkok and with many seeking refuge in Pattaya, which is thankfully known for its lack of flooding (cough, cough). As a real estate company, we were inundated with people seeking short term rental accommodation as the hotels and guesthouses around town were filled to capacity. Thankfully some landlords took pity on these families and allowed weekly rentals for large families in their condos here just to help out. In the weeks and months that followed, we saw a sharp rise in property inquiries coming from Thais. To me, this was the start of the last property boom. We all obviously took a big hit in 2008/9, something I’ve written about before ad nauseam, and the 2011 post-flood Bangkok-Thai invasion is when it all started to come back again.
Bear in mind, prior to this, Pattaya wasn’t exactly a destination that was big on the radar of Bangkok-Thais. I remember in the early 2000’s I’d tell people in Bangkok I lived in Jomtien rather than Pattaya as the stigma attached to Pattaya was still that of a seedy little red light district full of older farangs chasing young Thai girls. Very seldom would you see Thais without foreign husbands looking to purchase property in Pattaya, and Thai buyers for off-plan condos were few and far between. Flash forward to 2011 and we saw a great influx of these same Thais who once turned those noses up at Pattaya now rediscovering it as a nearby getaway that actually has a lot to offer to families, couples, and of course, single folks. Think about how many condominium projects were launched in the Pattaya area between 2011 and now – and think about how many Thai buyers have genuinely bought units in these projects. Projects from such developers as the incredibly successful Riviera Group have seen previously unheard of numbers of sales to Thai buyers, mostly from the greater Bangkok area.
So this is what I see here once again. And very similar circumstances as well. Obviously the market has become a bit, shall we say, unstable, since the COVID crisis hit this year. Consumer confidence isn’t exactly at an all-time high. What a fantastic time to buy. This is very similar to the market here post-2009 recession – the Bangkok Thais came in and essentially saved the day.
This also brings us to something I touched on in last month’s article – in times of crisis and uncertainty, property markets surprisingly generally fair quite well. Particularly in Asian countries, land and bricks & mortar seem to be the ‘fall-back’ investment. Markets, being currencies or stocks/options, can be seen as far too volatile in times of economic uncertainty – property is tangible and well-located properties such as beachfront condominiums, will always hold their value for the most part.
While I remain bullish in this aspect of the market, without a doubt, we need foreigners to come back in to really get this engine running again. If we had a combination of foreign buyers with the domestic interest right now, I think we’d be right in the middle of a local property boom. I know that sounds incredibly optimistic but I really feel we’re on the cusp. I believe COVID has opened people’s eyes to what’s important to them and how they want to spend their lives. Would you risk being locked down in an over-crowded city in China or be here in the sunny climes of Pattaya? The choice seems pretty obvious to me.
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.