While property sales in Pattaya have been surprisingly brisk, only a small faction of the market here can truly say prices have risen. Certain prime luxury properties have held their value very well during this pandemic, with some even seeing a slight rise in prices, though the vast majority of the market here has seen a bit of a decline, even with many transactions taking place.
The biggest losers in the local market seem to be the lower-end of the condo market. Units in what I would call ‘resort-style projects’ have seen prices take quite a bit hit of late, though to be fair, that market was saturated and declining even pre-covid.
Looking elsewhere around the world, the rise in property prices is quite astounding in some countries.
The U.S.’s friendly northern neighbour has the hottest housing market in North America by far, even as the U.S. itself is seeing a boom. Even as the pace of U.S. sales increased by 13 per cent in March 2020 compared with 2019, the increase was a whopping 75 per cent in Canada. The average home price in Canada rose 32 per cent from a year ago, almost twice the rate of increase in the U.S.
Short supply, low borrowing costs and pandemic-inspired demand for larger homes in both countries have prompted bidding wars, offers six figures above asking price, and a record surge in overall home values — a few months ago the U.S. reported a record median gain of 16.2 per cent in the first three months of the year.
There are some notable differences between the two housing markets that may partly explain Canada’s huge surge in prices.
One possible partial explanation could be that population expansion has been faster in Canada than in the U.S. – as Canada’s liberal government increased immigration in the few years preceding the pandemic, Donald Trump was increasing barriers for entry. Canadians also escaped the 2008 financial crisis without much loss to their home values — registering a 0.5 per cent decline compared with 12 per cent in the U.S. — leaving them in better financial positions to be purchasing homes now.
The covid pandemic has seen huge changes in people now working from home. And with suburban properties being much better value for money, many Canadians are now moving to the suburbs for larger, more work friendly homes and leasing out or selling their urban digs.
After many years of booming property prices in Australia, the market took some big hits over the past few years. However, things seem to be rebounding now. Melbourne and Canberra have recently joined Sydney in the $1 million-plus median house price club as the country’s property market soars.
Australia’s latest Domain House Price Report, for the June quarter, shows that in just three months Melbourne’s median house price increased by $41,000 to $1.02 million. The most affordable area to purchase a house is in the West of Greater Melbourne at $657,500 followed closely by the North West at $694,000. Melbourne remains the second most expensive city in the country to buy a house, behind Sydney where the median house price for the June quarter grew to an whopping $1.4 million. Canberra is also close behind with a median house price lifted 10.4 per cent to $1.015 million. Other notable mentions included Brisbane ($678,236), Adelaide ($629,728), Hobart ($646,301) and Darwin ($608,519). The cheapest capital city to buy a home in was Perth, where the median price rose slightly to $595,823. When all capital cities are accounted for, the median cost of purchasing a freestanding house in Australia is now $955,927. It’s really quite an incredible number – imagine trying to get on the ‘property ladder’ as a young buyer in Australia…
UK house prices are soaring as well and have been increasing at their fastest rate for more than a decade despite the country being gripped by a pandemic. Again, as with Australia, potential first-time buyers may have more of a sinking feeling, as some watch the likelihood of owning move further out of reach.
House prices in the UK have generally been going up since the financial crisis. The latest official figures for March, show that trend speeding up even more. Property values were 10.2% higher than a year earlier – the fastest annual rate of growth for 14 years. One notable boom area has been Cornwall which, recently overtook London as the most popular search destination for property buyers.
As with many other countries with the pandemic pushing people to work from home, buyers want bigger homes with room to live and work. The trouble is they are in short supply. And with a lack of homes on the market, when demand from buyers is high, inevitably prices will be pushed up.
It should also be noted that the big spike in March came as buyers and sellers rushed to complete deals ahead the stamp duty holiday expiring at the end of the month, which was saving many buyers in the region of £15,000 on average.
Can all of this continue or will the bubbles burst?
Personally, I think we’ll see these increases continue as property purchasing in general has been the cornerstone of investment for many generations in uncertain times. Let’s hope some of this rubs off on the market here!
Stu Sutton is managing director of Jomtien Property and Serenity Developments and has worked exclusively in the Pattaya/Jomtien real estate market for 18 years. Please feel free to contact him with any queries, compliments, or good jokes, [email protected] or visit Jomtien Property’s website at www.jomtien-property.com