Foreign investors have a strong interest in purchasing real estate in Thailand, particularly in the popular city of Pattaya. Situated on the mainland and situated along the coast of the Gulf of Thailand, it attracts many tourists due to its pleasant climate and convenient location. The demand for real estate in Pattaya remains high throughout the year, making it a promising investment opportunity.
- The allure of Pattaya for investors
- Trends in the Pattaya property market
- Investing in Pattaya real estate
- Considerations to keep in mind while opting for an investment property
Before the pandemic, the city used to attract around 2 million tourists annually. However, the tourist flow is gradually recovering now, which is driving the growth of the local real estate market. Pattaya is a popular choice due to its abundant recreational opportunities. Unlike Phuket, which offers a more relaxed and peaceful atmosphere, Pattaya boasts a vibrant nightlife and a wide range of entertainment options for people of all ages. Tourists can enjoy theme parks, water parks, clubs, numerous cafes, and restaurants, all at prices lower than those in Phuket. Additionally, U-Tapao International Airport is conveniently located just 40 minutes’ drive away, making transfers hassle-free. These factors contribute to the region's attractiveness for visitors and create a high demand for accommodation.
The real estate market is experiencing a significant recovery from the pandemic and is currently on the rise. This growth is largely driven by foreign investment, with citizens from China being the dominant investors. Over the past few years, housing prices in the city have consistently increased, and this trend is expected to continue in the current year. Experts predict a further 1-2% increase in the average housing cost in Pattaya.
There are 6 solid reasons for considering real estate investment in Pattaya:
- Affordable prices: In June 2023, there were 432 residential units available for sale in Pattaya. Out of these, 112 were priced at $52,000 or less, which accounts for 25.9% of the total offers. The cheapest apartments in Thailand are being sold for $32,000. Therefore, housing costs in Pattaya are significantly lower compared to the popular destination of Phuket, where it is challenging to find options under $45,000.
- Stable rental income: Rental income can be gained throughout the year in Pattaya, as there are no seasonal restrictions on the tourist season. On average, rental housing generates an annual income of 5–5.5%.
- Annual price growth: Properties in Pattaya can always be resold at a higher price, allowing for savings against inflation.
- Attractive tax scheme: There is no annual property tax in Pattaya. The only fees incurred are registration fees when purchasing a home, which range from 1–3.3% depending on the ownership form.
- Economic sustainability: The economy remains stable, maintaining a steady exchange rate for the national currency.
- Wide selection of housing estate: Pattaya allows for multi-storey construction, resulting in numerous new buildings that meet high standards for real estate.
Make sure to keep these important points in mind while house-hunting for accommodation in development projects in Thailand:
- Location of a residence and its proximity to the coast play a significant role in determining the price and liquidity of apartments. Apartments located on the first line are more expensive but also easier to find tenants and buyers for.
- The availability of nearby infrastructure such as shops, hospitals, and schools varies in different areas.
- The prestige of the housing complex and the availability of additional amenities are important factors for buyers. Many prefer to invest in apartments in development projects in Thailand that are still under construction. Developers often offer interest-free installment schemes, allowing buyers to pay for the housing gradually. This strategy also allows for potential profit through resale, as finished units tend to be more expensive than those still under construction.
- The class of apartments, their size, and the quality of the renovations also affect the speed of finding buyers. Spacious residences with modern renovations are in higher demand.
- The cost of housing is another crucial consideration.
It is important to note that the process of acquiring real estate in Thailand differs from what Europeans are accustomed to. Foreigners are restricted from owning land and can only lease it. Long-term leases (leasehold) allow for the use of villas in Thailand for 90 years. Apartments in a condominium can be purchased as private property (freehold), but only if non-residents collectively own less than 49% of the residential complex. This is why buying an off-plan home is often recommended, as it ensures more affordable options are available.
It is challenging to provide definite assurances in economic predictions because the state of a country is influenced by various factors, ranging from economic progress to the global geopolitical situation. Nevertheless, considering Thailand's popularity prior to the pandemic, it is evident that the country has not yet regained its previous level. As the number of foreign visitors increases, the demand for housing will continue to rise, leading to an increase in property value. Therefore, investing in real estate in Pattaya would be economically sound.