As many as half of the important Russian overseas property buying demographic in the Thailand resort city of Pattaya have disappeared in the wake of the collapse of the Russian ruble.
That figure, which could be even higher according to some, comes directly from a number of experienced real estate agents and developers working in the city, where Russians and buyers from Eastern Europe have been particularly prevalent in recent years.
To highlight the importance of Russian property buyers in the city, at least one high-profile property developer has opted to postpone one project at Jomtien Beach and refund all payments made by buyers. According to market insiders, this happened to avoid the risk of Russian buyers failing to make their final transfer payments upon completion of the project.
Underlining the issue, Sinchai Wattanasartsathorn, President of the Pattaya Business and Tourism Association, said in a recent interview that the decline has put the brakes on Pattaya’s tourism industry, as well as its real estate sector, as many Russians had become property investors.
Sinchai went on to say: “Many Russians who bought condos have stopped making their monthly payments, which has consequently affected the project developers, and we have to prepare for the worst to come.”
Veteran Pattaya real estate agent Clayton Wade told DDproperty.com: “Most, if not all agencies, are receiving regular ‘Hot Sale’ emails from Russians wanting to get out of their monthly payment obligations for their current purchases, and as well trying to dump their previously purchased apartments and houses.”
“It is amazing to me just how quickly this Russian ruble debacle has happened, and I agree with Sinchai in that I think that this is only the beginning of the property dilemma and its effects on the Pattaya condominium industry. “
Wade, mentioning Sanpetch Suppabawonsathien, President of the Thai Hotels Association, said in mid-December that the Russian tourist market in Pattaya was slumping for the first time in 12 years, and as a result Pattaya hotel reservations from the Russian market had already dropped by 70 percent for this high season, with about between 40 percent to 50 percent fewer arrivals.
Wade said: “Having my office right on Jomtien Beach Road, it looks like even more than 50 percent less than last year to me. As well, taking the above figures in mind, I would say that there is probably less than 20 percent of the previous year’s Russian property buyers – and my figure may be high.”
Wade was realistic about this year’s high season for the Gulf of Thailand city.
He added: “This will be the year we remember as not having a ‘High Season’, after experiencing a good number of years in which we saw good business almost year round do to great numbers of Russians arriving in Pattaya almost year round.”
Cees Kuipers of Town and Country Properties partially echoed Wade’s comments. He told DDproperty.com: “My company isn’t a big ‘peak-season’ player as we cater more to the domestic market all-year round, however, I can say that 2014 wasn’t a particular highlight for Thailand in general. I think there has to be quite a bit of image-rethinking.”
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
