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  • Pattaya
Price £38,700
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Property Description

Profit from Russia's Financial Crisis with Pattaya Property
There are Investment opportunities to be had at the moment in buying up some fire sale properties from Russians who are unable to complete on their purchase due to the collapse of the rouble.

The Opportunity
Our colleagues in Pattaya Thailand receive offers from Russian sellers looking to sell on their distressed properties on a daily basis. With over 14 years’ experience in the Pattaya market, we cherry-pick the best of these proposals to offer to our clients. We only pick the best 5-10% of the properties offered to us to ensure that, in each case, the property is being sold significantly under developer prices and are located in projects which are in high demand in order to ensure maximum occupancy rates. Such units will typically offer buyers a rental yield in the region of 10-12% per annum and are usually priced at under THB 2.5 million.
The most attractive properties are usually being offered by owners who are very close to foreclosure. Owners are thus prepared to accept offers well under their original buying prices in order to avoid their units being ceased by the developer due to breach of contract. Therefore payment from the buyer is usually required in full within a two week period. As a result, these offers are only suitable for cash buyers.

Upon completion, our colleague’s furniture division, Pattaya Furniture, will equip non-fully furnished units to full turnkey, ready to rent, standards affordably and in under two weeks.
The company’s rental division, Pattaya Realty, will then offer the units to rent to our large database of prospective tenants, including several multi-national corporations we work with who require high-quality housing for their employees working in senior management roles at the large industrial estates located a short commute from the city.

Rental revenues are paid into owner’s bank accounts either within Thailand or internationally on a monthly, quarterly or annual basis. There are no taxes on rental revenues earned in Thailand.
Sample Offers
Golden Tulip
36.2m2 One-Bedroom Apartment with Pool Views
Asking Price: THB 2,460,000
Developer’s Price: 3,077,000
Discount: 20%
Rental Returns: Short-Term - THB 30,000/month Low Season/12 Month: THB 25,000/month
Rental Yield: Maximum – 14.6% Minimum – 9.75%

The safest buy-to-let investment in Pattaya is in a development right in the heart of the city centre. A very high proportion of tenants prefer the convenience of having all of Pattaya’s attractions such as Walking Street and Central Festival Mall within easy walking distance. However, after three decades of development, there are very few remaining building plots or modern, fully-featured developments in this part of the city. As a result of this high demand and low supply, occupancy rates here are very close to 100% year-round. Golden Tulip is a unique project in that it occupies one of the last remaining large plots in the centre, thus offering a fully featured resort – with large lagoon pools in a highly-desirable location. The project is also unique in that it will be managed by Golden Tulip, one of the largest hotel brand in the world.
The layout of Golden Tulip is such that the units with the best views – those over the pools – are all larger sized-units, starting at over 50m2.

A combination of larger-sized units and premium prices/m2 means that pool view units here cost a minimum of THB 5 million. The more compact one-bedrooms units are all outwards facing where the views are less than ideal. However, one building on the project has views over the pool and gardens of the adjacent Mercure Hotel, which is as pleasant as the project’s own internal pool views. We have one remaining unit with this view, located on the seventh floor of the building.
Construction of the project is now underway, ahead of a completion date of late 2016.

Amari Residences
35m2 One-Bedroom Apartment with Pattaya Bay Views
Asking Price: THB 3,300,000
Current Market Value: (approx. THB 120,000/m2) THB 4,200,000
Discount: 21.4%
Rental Returns: Short-Term - THB 35,000/month Low Season/12 Month: THB 30,000/month
Rental Yield: Maximum – 12.7% Minimum – 10.9%

Amari is one of Thailand’s top hotel brands. Amari Residences consists of hotel-operated units on the lower half of the tower, with residential units in the top half. The project is located in the highly-desirable Pratumnak area of the city, which is highly popular with the long-term rental market due to a combination of close proximity to the city centre, excellent sea views from the towers here and its very peaceful nature compared to the heart of the city. While there are several towers in this area with good views West over Koh Larn Island, Amari Residences is unique in that it faces north, giving most units here a view over Pattaya Bay and the cityscape.

Completing at the start of 2016, the developer sold out of all units in the building over two years ago, which led to a very active resale market on the project. We have two units available on the 20th and 21st floors, both which benefit from excellent views over Pattaya Bay.

42m2 One-Bedroom Apartment with Partial Sea Views
Asking Price: THB 2,675,000
Developer’s Price: THB 3,100,000
Discount: 13.7%
Rental Returns: Short-Term - THB 25,000/month Low Season/12 Month: THB 20,000/month
Rental Yield: Maximum – 11.2% Minimum – 9.0%

Acqua was completed on 9 December 2014, with the result that buyers now have just a few weeks to come up with their final payments or else they will be in breach of contract and lose their apartments. This is the sixth project from an award-winning developer. There is a waiting list for units on their previous projects as they have their own in-house rental division. Located in the up-and-coming Jomtien area of the city, Acqua benefits from the fact that it is located just 200m from the beach and just 50m from the main public transport route linking Jomtien to the city centre.

With around 350 units, the project is not as impersonal as the large resorts in Jomtien and unit sizes are large enough for year-round living. The level of facilities on offer here are exceptional for a smaller development, with a large swimming pool in the centre of the project plus two infinity pools on the top floors, from which there are excellent sea views.

Cosy Beach View
49m2 One-Bedroom Apartment
Asking Price: THB 2,300,000
Developer’s Price: THB 3,348,702
Discount: 31.3%
Rental Returns: Short-Term - THB 25,000/month Low Season/12 Month: THB 20,000/month
Rental Yield: Maximum – 13% Minimum – 10.4%

Cosy Beach View was completed in January 2015 and the developer now requires payment of the outstanding balance or the unit will be forfeited according to contract. The owner has already reduced the price heavily as this unit needs to be sold before the middle of March. Cosy Beach View is a 24-storey tower building located in the highly-desirable Pratumnak area of the city.

This location is very popular with long-term renters due to the fact that it is only a seven minute journey from here to the city centre, but the area is very quiet at night. The project is located just 300m from the beach and a major shopping street. Although this apartment is located on only the third floor and so will not benefit from sea views, spectacular sea views are to be had from the facilities level on the 14th floor which includes a large swimming pool. At 49m2, apartments are comfortably-sized compared to most new apartments being built in the city which average around 35m2.

The Gallery
35m2 One-Bedroom Apartment
Asking Price: THB 1,890,000
Current Market Value: (approx. THB 68,000/m2) THB 2,380,000
Discount: 20.5%
Rental Returns: Short-Term - THB 22,000/month Low Season/12 Month: THB 18,000/month
Rental Yield: Maximum – 14% Minimum – 11.4%

Completed in 2013, The Gallery has a proven history of high occupancy rates and demand for resales. This unit is supplied fully furnished and the current owner has been successfully renting it out short-term for the past two years.

The project is located in the up-and-coming Jomtien area and benefits from being located just 300m from the beach and the many shops and restaurants on the beachfront, while the main public transport route is just 100m from here, offering quick and easy access to the city centre.

Economic Overview
Pattaya in Thailand has been one of the world’s fastest-growing real estate markets since the opening of Bangkok Suvarnabhumi Airport in September 2006, reducing journey times to the city to under 90 minutes. A new high-speed railway link to the city due for completion at the end of the decade will reduce the journey time still further – down to under 45 minutes.

Rapid growth of tourist numbers and the increasing number of expats attracted to the city by its year-round tropical climate and highly-affordable living costs led to a real estate boom which has lasted for nearly a decade, with no signs of slowing down any time soon.
Whereas the property markets in Spain and Florida were decimated by the financial crisis of 2008, the property market in Pattaya weathered the storm due to the highly cosmopolitan nature of the city’s tourists and expat populations. Whereas the European and US buyers were well down during the 2008-10 period, rapidly increasing interest from Russian buyers at that time more than compensated for the downturn in demand from European and US buyers.

From 2010 through to the summer of 2014, Russians were the biggest group of visitors to the city and were the biggest group of property buyers, accounting for approximately one-third of the city’s visitors and one-third of real estate buyers.

Since December 2014, however, there has been a major shift in the market due to the collapse of the Russian rouble as a result of international sanctions and tumbling oil prices. With the Russian rouble having lost half of its value against the Thai baht over the past twelve months, many Russians are now unable to complete their property purchases or else are looking to liquidate their assets in Thailand in order to raise capital. This has led to a unique opportunity for cash buyers from other parts of the world to obtain high-yielding properties at well below market values.

While the collapse of the Russian rouble has led to the number of Russian tourists visiting the city by as much as 50%, Pattaya’s cosmopolitan nature has once again ensured that the city has seen little effect from the rapid slowing of demand from Russians for accommodation. The slowing of the Russian market has been compensated for by rapidly increasing demand from China – where visitor numbers for 2015 to date are up 30.2% on the same period in 2014, with similar increases for visitor numbers from India, the Middle East, plus other East Asian markets such as Malaysia, Singapore and Korea.

As a result, demand for rental units in the city has remained high throughout the period, with no signs of any weakening in demand on the horizon. Owners of properties in Pattaya are still seeing rental yields of 8-10% per annum, as has been the case for the past five years.

In addition to high rental yields, investors can also look forward to high capital growth over a five year period, due to the following factors:
1. The opening of the high-speed railway link at the end of the decade will make Pattaya commutable from Bangkok for the first time. This will lead to increased demand from domestic Thai buyers.

2. Whereas the China is already the number one source of visitors to the city, the market is very much at the ‘early adopter’ stage when it comes to Chinese property buyers. Demand from China is more than doubling each year, but from a very small base. By 2020, however, they will undoubtedly be the biggest buyers in the market.

3. ASEAN, which is a South East Asian equivalent to the EU, comes into effect on 31 December 2015. This will lead to free movement of labour and capital between the ten member states which has a combined population of 617 million. This is sure to have a highly positive effect upon the economies of all member nations.

4. Russia is no stranger to financial crises, having suffered a similar situation in August 1998, from which it was able to bounce back within a two year period. With Moscow now strengthening ties to Beijing in order to compensate for a reduction in trade with Europe, the country will – sooner or later – recover. This will, inevitably, see the number of Russian visitors returning to the 2013/14 numbers at some point in the not-too-distant future.

Images relate to a completed furnished unit in Cosy Beach View and are for illustration purposes only.

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