Thailand's Resilient Property Market

The resilience of the Thai Property Market

In most countries of the world, property markets are hypersensitive to even the smallest fluctuations in the economic, social and political climates. This begs the questions: Why is Pattaya/Thailand so different? Why is this market so resilient?

Let's begin by looking at some of the events, laws and rumors that have hit Thailand over the past five years.

The first worldwide panic was 9/11. This event not only gave a hard shake to the North American stock and property markets, but it truly shook the world on a global level. Even the Asian markets who, one could argue, could have taken advantage of a weakened West, instead took a serious tumble of their own. Even given the worldwide drop in tourism over the proceeding several months, Thailand was barely fazed, property sales continued their boom and only a few noticeable changes occurred including stepped up security in some of the area hotels.

There were only a couple of confirmed cases of SARS in Thailand and both cases were contracted outside of the country. This didn't stop people from flagging Thailand as "one of those Asian countries" and we were subsequently lumped in with the rest of them. Tourism took quite a hit, but sales remained strong and long-term renters who were familiar with Western panics continued to come in droves.

Pattaya and Jomtien like Paradise

The Tsunami

An unbelievably tragic event that still feels too recent. The Phuket and southern property markets obviously took a major hit but as a result it actually boosted the Pattaya market. It almost seems irreverent to say that this horrible event actually boosted Pattaya's property market, but it did. Apartment buyers who were tossing between buying property in Pattaya and buying property in Phuket, had made up their minds where to buy on Boxing Day 2004.

Bird flu

Bird flu, by all means, should have cut the property boom at the ankles. If one believed what they saw on CNN and FOX News, they would not have stepped foot into the Kingdom. But people kept coming. I suppose most travelers to Thailand and Pattaya know Asia better than the average viewer and are so less likely to be scared off by sensational hunting and stimulating fear news coverage

Property laws in Thailand

More recently, the changes in the property laws in Thailand, or should I say, re-enforcement of existing property laws, caused a bit of a stir. This was more a result of the laws not being clearly explained as they were vague at best. For about three weeks you could see the panicked faces of real estate agents at every bend telling people everything is okay.

Yet everything does seem to be okay. After about a month, people became more informed, received a bit of clarification and moved forward. House sales are still a bit slow, but if anything, this situation continued to drive the condominium / apartment market, particularly with foreign owned units, which are now seeing quite a premium over their company-owned counterparts.

Visa regulations

Another recent hiccup has been the overhaul of visa regulations in the area. To be honest, many buyers and renters in Pattaya are over the retirement visa age of 50. Anyway... anybody else can simply go to a Thai Embassy in Laos, Myanmar, Malaysia, Cambodia, or anywhere else in the world, for that matter.

The military coup

The most recent event to hit Thailand, was the coup. Now, for clarification, I have never been in a country when a coup has taken place before so I really didn't know what to expect.

That evening on BBC News they showed tanks rolling down Sukhumvit Road in Bangkok. But we all know the aftermath. It was so gentle it was almost disappointing, as strange as that sounds. I was half expecting a curfew, tanks rolling down Beach Road Pattaya and all foreigners given the option to be flown out by their embassy. As it turns out, we came just short of all holding hands, singing all our Isan favorites and knitting sweaters for the troops in command. This last 'event', the coup, proved once and for all that Pattaya has to be the most resilient real estate market in the world, because business was as usual and the number of sales of condominiums kept rising.

But the big question is, why is the market so resilient?

The answer:
All anybody is used to, be it food or any other product, is available in Pattaya - from Croissants to dark German bread or Baguette, Italian Salami or Mozzarella name it and you can get it - there are no sacrifices - only gains. Pattaya has an up to date infrastructure be it advanced technological developments such as broadband internet or well maintained streets and highways.
Pattaya has a multi-cultural environment. English is well understood.
But there is also another reason people typically move to Pattaya because it's a dream world - a place where "normal rules" as we know them from the West don't apply.
A place where 70 year-old men can marry 20 year-old beauty queens.
Where men look like women and everyone seems fine with that because tolerance is not just an empty word.
Where we have an abundance of sunshine and where the rainy season is less wet than the average summer in The Netherlands or U.K.
Where you can forget your licence and helmet at home and receive only a 200 Baht fine when driving on the wrong side of the street ..
essentially, people come here to Pattaya to get away from restricting serious matters and to enjoy what's important to them in their life. And if there are enough people who want to escape to their new-found 'paradise', it's certainly enough to drive a property market!