The Current State of the FIRESALE Property Market in Pattaya according to Simon Ditchburn, Developer
I don’t normally write articles. It’s not my forte. I spent most of my working life on a building site, being on the physical side of things and even now I leave the scripts and write ups to our Sales and Marketing team, but I do get asked my opinion on today’s market in Pattaya. So here is my personal view.
The Market seems to be full of fire sales and reduced prices. They are being proudly advertised as being below the Developers price. Some people would say, that this style of advertising is to excite the market. To try and make buyers move with the “buy now or you’re going to miss out tactic”.
Is this really the state of the current market, or the state of the poor individuals that have found themselves in financial trouble and need to “get rid” as soon as possible. You see, once a fire sale has been purchased. The new buyer then wants to resell, for their profit, as soon as possible and are then relying on the Developers price to be the main guide price. What would happen if the Developers then found themselves in a position, where their own sales had been completely blocked through the fire sales. Basically, this would result in a complete collapse of the Property Market and take all of the suppliers with them. The knock on effect would be disastrous.
Luckily, things are “not what they seem”. The fire sales, even though widely spread through the magazines and websites, are not in the wide abundance as you would be made to believe. In my own Tudor Court, for example, I can only think of 2 units being sold at reduced prices out of a total of 76 Units. Although reading the advertising. You would think the whole building was on fire sale and the sky had collapsed.
There is a downside to any fire sale. The seller is relying on a cash buyer. Somebody walking around the town with 2 mil Baht available in their back pocket. This clearly, will only represent the smallest number of buyers. There are far more people in a, lower cash available bracket, that wouldn’t be able to buy the fire sale even if they wanted.
These buyers represent the majority. I’m personally more worried about the majority of buyers, as they would normally require mortgages or payment plans to buy and the Banks aren’t lending. Not to Foreigners or Thais alike. This for me, because it represents the Majority of the buying market, is far more dangerous than fire sales.
Normal buying of property in England or in Thailand, is to get a mortgage. Prices are going up not down. That means in the future, as Pattaya booms. With its new Shopping Centers and Monorail driving around Beach road and its new Marina. The amount of people needing mortgages or payment plans, is going to increase. The Banks have to move. I have myself, suffered from losing 20 sales or more, directly involving the Banks not lending. Think about that. Only 2 fire sales but 20 lost to the Banks.
Well this Developer, has had enough. That’s why I have released the 15year payment plan. For the Cube Condominium. I intend to help the majority of my buyers, to go ahead with their purchase. It’s not unheard of. English Developers, in England, have done the same. With their assisted finance plans. If the Developers don’t step in. The market will surely come to a halt.
How does it work? Well it’s very simple. We take 30% of the purchase price as a down payment and then 70% is paid over 15 years, at a monthly rate. The basic principle is the same as a Bank. We only charge 5%, which is much cheaper than the Banks and there won’t be any application process like credit checks for example. You can clear the balance early. I will follow exactly the Bank regulations for early settlement. Title deeds can be released to the buyers, but will have the mortgage registered on the back side, from the Land Office to protect both parties.