The magnet of the coastal city of Pattaya on the Gulf of Thailand has been attracting property buyers and investors from Thailand and overseas for years.
Recently, with the serious demise of the important Russian buying demographic from the city due to the Ruble currency crisis, the prospect of thousands of unsold units has become a serious worry for many agents and developers.
To attract buyers some developers have been offering guaranteed returns to buy-to-let investors, with at least one guaranteeing 10 percent returns for ten years.
Does that sound too good to be true? Can that level of returns be guaranteed, especially in a city where most analysts agree there will be a large number of completed, unsold units coming onto the market within the next two years.
DDproperty.com spoke to an industry expert. He declined to be named but insisted he knew of only one credible developer on Pratumnak Hill in Pattaya that could achieve that level of guarantee to its investors.
He was keen to urge overseas investors to check whether their purchase is being made in their own name, or whether it was being made in a Thai company name due to the 49 percent foreign space allocation being sold.
He added: “It is quite possible to expect a rental return of between 8 percent and 10 percent in Pattaya if you’re wise with what you buy in the first place.
“People who are buying the 20-30 sqm shoeboxes, furnished identically, as an investment should be most concerned as there are literally tens of thousands of them available.
“However with careful consideration when buying, such as choosing a unit which has limited numbers within a project, or has a special feature to make it stand out from the rest, could provide a decent return on your investment.
“The old adage of location, location, location is, of course, of paramount importance and buyers should differentiate between what their personal taste is and what makes good business sense.”
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
