By Clayton Wade
Managing Director
Premier Homes Real Estate Co., Ltd.
clayton@premierinternational.com
Just as in English, the word ?secondhand? in the Thai language is the same?mur song (hand-second), and in the real estate industry it applies to any property that was previously owned by another and is being sold?again.
As well, here in Pattaya and throughout the Eastern Seaboard, there are real estate agencies that deal in the brokering of existing re-sale or secondhand homes and condos?what I like to call ?Real Estate?.
Now in places like America and Australia, the real estate industry will most often have a good balance between the sale of secondhand properties and the sale of brand new construction.
As we have all seen, the past five years or so here in Pattaya have brought a tremendous amount of new construction and with it a shocking number of new housing and condominium developments, and these new ?first-hand? residential properties have captured almost the entire market share.
Well, obviously, it would be great to see this construction boom continue as long as possible, but while we are all wondering which way the new construction market really is going, we are seeing a developing interest in the purchase of existing or secondhand homes and condos.
There seems to be a growing number of foreigners and Thais showing interest in purchasing secondhand homes and condos in Pattaya and the Eastern Seaboard.
Is it possible that we have been going through a huge price-adjustment period in which the over- inflated prices we all witnessed climbing and climbing during this most recent real-estate boom are beginning to settle into their ?true values? and sellable prices?
I have often said that one of the most dynamic reasons for our area?s real estate success is that ?The World keeps getting worse and worse and Pattaya and the Eastern Seaboard keep getting better and better!?
Could this be what we are seeing? Could we be seeing the beginning of a new cycle of real buyers who really are looking to relocate to live here?
Foreigners and Thais that want to see their new houses or condos now?and purchase and move in now!
Interestingly enough, we seem to be seeing signs of just that?foreigners looking to purchase existing houses and condos to move into, purchase houses and condos to rent until they retire, and some even looking to purchase because they feel the time to buy is upon us.
There are signs that foreigners that have been living here for years are starting to look around at the housing and condo market because they feel this is the time to buy.
In fact, we have not seen such a tremendous buyers? market like this possibly ever with such a huge supply of both resale and newly constructed houses and condos.
So, what does all of this mean? Perhaps we are starting to see property owners getting serious about selling their properties while, at the same time, we are also starting to see buyers getting serious about good deals out on the market place.
One thing for darn sure is the great abundance of secondhand homes and condos on the market for sale and, finally, at great prices as well!
And you can rest assured, we are going to see a mother lode of brand new properties enter the market as a result of this most recent construction boom, and you just know that there is going to be a huge price adjustment necessary to move all the newly-constructed properties that will be on the market.
How can I say something so outlandish? How about because of the extremely high number of unsold property units available right now in Thailand?s major provinces?
Are you surprised? An oversupply of new construction all around you and you didn?t even know it!
Recently, in fact just two months ago, my good friend Samma Kitsin led his Real Estate Information Centre (REIC) in making a startling discovery as a result of their survey throughout the major provinces of Thailand. He found that as of the end of December 2012 (60 days ago!) there was an inventory of 71,770 housing units worth 229.26 billion baht unoccupied and available on the market, and top Thai researchers are already predicting that it will take at least two years to sell them completely.
We are not talking simply about foreign tourist areas. No, we are talking about such locations as Prachuap Kiri Khan, Phetchaburi, Ayutthaya, Khon Kaen, Songkhla, Rayong, Nakhon Ratchasima?as well as Chiangmai, Phuket and Chonburi.
Just when we were all concentrating on the pending oversupply developing here on the Eastern Seaboard we find that it is not exclusive to Chonburi and other foreign development areas, it?s all over Thailand.
Having said that, Chonburi is at the top of this unwelcome list with its inventory totaling 31,340 property units worth 92.43 billion baht?and climbing!
Sixty-one percent of that number is condominiums?yes, 19,010 condo units valued at 56.38 billion baht with the rest (39 percent) valued at 36.05 billion baht being low-rise residences made up of detached houses and townhomes!
An inventory in Chonburi of 31,340 property units worth 92.43 billion baht in unoccupied and available housing units and I?ve got invitations to new property launches, soft launches and just stop by and pick up a brochure invitations coming out my ears!
Now yes and obviously we have a huge oversupply problem brewing and that is not a good scenario for property development, but it?s fabulous for the end user?the buyer!
Do you remember that 15 percent surcharge levied just two months ago in Hong Kong against foreign property purchasers to stop the Hong Kong market from overheating from all the foreign (mostly mainland Chinese) purchasers?
Well I was in Hong Kong last weekend and I just had to laugh at the front page of the South China Morning Post which reported: It?s too early to conclude that the cooling effect was short lived, say analysts [Now here?s the good part] as property prices in the secondary market hit a new record.
You see, even though we face a huge oversupply, there are still huge numbers of foreign and local buyers purchasing houses and condos, and the numbers are most likely going to continue to grow year in and year out.
So the big guys?the quality branded condominium and housing developers?are still selling now, and the resale market is also starting to open up, and all we are going to do is go through a price adjustment period and offer the buying public some really ?killer deals? while we work this housing inventory down to a more stable level by lessoning the supply.
It?s always been the same here in the Land of Smiles??give the public a great price and a quality product and they?re all smiles!
Our very special thanks to Clayton Wade, managing director of Pattaya?s Premier Homes Real Estate Co., Ltd. for preparing this Pattaya Today column.
Clayton Wade has been running Premier Homes Real Estate Co., Ltd., with his wife, Khun Supap, for more than 17 years. He himself has been in the real estate industry going on 27 years, having started his career in the United States where he was licensed and practiced both real estate sales and property management in Seattle, Washington.
Clayton personally was responsible for bringing in the first 53 General Motors executives for the start-up phase of Thailand?s General Motors manufacturing facility and had a three-year exclusive with the company. Following that experience, he placed most of the start-up executives for the Eastern Seaboard?s BMW manufacturing facility.
Clayton Wade is a council member with the Gerson Lehrman Group, the New York based international research and consulting firm, and has been a national panel judge with the Thailand Property Awards for many years.
The American-born entrepreneur is known throughout the Asia-Pacific region for his writing, public speaking and television presentations. His many accomplishments in promoting real estate on Thailand?s Eastern Seaboard include having been a guest speaker with several of Thailand?s top political and business figures on CNBC?s Managing Asia.
Premier Homes is Pattaya?s leader in exclusive property sales and rentals, which may be seen by visiting their website at: www.premierinternational.com. Clayton Wade may be contacted at +(66) (81) 634-2915 or at: clayton@premierinternational.com
Source: http://pattayatoday.net/property-business/property-today/a-real-estate-roller-coaster/
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