The weakened ruble is causing Russian investors to urgently sell their properties, creating an exciting buyers’ market in Pattaya. Read on to find out more.
Pattaya Hit Hard by Weakened Russian Ruble
The coastal location, the never-ceasing waves of tourism, the large expat population, and the appeal of an international city: Aside from all this, there are even more reasons why the coastal city of Pattaya has been an amazingly popular investment destination for foreigners wanting a piece of Thailand’s booming real estate market.
Over the past decade, the demand for real estate in Pattaya has been especially high among Russian investors who see the city as an accessible tropical destination with a year-round demand from vacationing rental tenants. Prior to 2014, an estimated 100,000 Russians were either living in or investing in Thailand, and over 60% were in the Pattaya area. Out of this 60,000 population, a significant number had recently purchased off-plan units in modern condominium developments. This particular investment type is generally attractive to investors who don’t need to live in the property themselves, as it allows them to buy below-market price and make payments in increments while they wait for the development to reach completion.
While Russian investors have been a steadfast demographic of property buyers for many years, beginning in the second half of 2014 they started to feel the effect of a weakening economy back home. Due to low oil prices, the crisis in the Ukraine and sanctions against Russia, their ruble currency has since collapsed. As a result, many Russians who are still making their income in the rubles must either make twice as much to afford their recently purchased properties, or sell them before the next payment in their payment plan is due.
How Does the Russian Economy Affect the Property Market in Pattaya?
This financial crisis in Russia is certainly a precarious situation for property owners in Pattaya that are directly affected by it. However, for other international investors with their eyes on Thailand it is something big to be capitalized on. The city is now truly a buyer’s market for those buying secondhand, yet new-build properties from owners who are eager to sell now.
One real estate agency in Pattaya, Beli Slon is the largest agency dedicated to the Russian market and is currently listing dozens of new-build properties that have prices slashed by as much as 30% off the market value. Others are selling for 10% less than what the initial pre-sale price was. Beli Slon’s managing director, Verona Konrad says that these opportunities to “buy well,” or buy below the property’s intrinsic value have never before been seen in Pattaya.
“Buyers in this market have a strong upper hand at the moment with the power to carry out sharp negotiations on truly high-value properties, and all with little time and minimal effort,” Konrad said. “Many of the available properties from our Russian clients are still unfinished and are selling for even less than what the original presale price was. The deals are basically unheard of, and Pattaya has no shortage of them.”
Get the Low Price Properties While You Can
Buying a property is always a big decision, but because there’s no telling how long the incredible deals will last, buyers are advised to act quickly in order to get the best possible value. Although rare, Beli Slon has even sold properties that are still on active rental-guarantee contracts, meaning the new buyers were not only able to purchase at below-market prices, but are also already collecting guaranteed rental income equaling up to 13% of their property’s original purchase price. For obvious reasons these deals don’t last long, yet they do still exist in Pattaya’s extreme market situation.
“It’s a simple concept that the lower you buy, the higher the value and the higher your profit will be when you eventually go to sell,” Konrad said. “Those who can wait for the market recovery, which, given Pattaya’s general desirability should happen relatively soon, will be remarkably rewarded.”
To learn about specific opportunities within Pattya’s second hand property market contact Beli Slon here.