Buyers Guide to Condominium Projects Pattaya
Special publication of Colliers International Thailand
Writers introduction Almost everyone visiting Pattaya will observe that the city is going through what one could only describe as a building boom. Everywhere we look we see huge billboards, magazine advertising and sales booths promoting modern, trendy looking condominium projects of all shapes and sizes, often at quite unbelievable prices.
Mark Bowling
Senior Manager Colliers International Thailand Email : mark.bowling@colliers.com
Mob +668 5282 8120
This publication is meant as an informative guide to assist those buyers bedazzled by the sheer range of what’s currently on offer. As with any emerging property market there are many opportunities presented to savvy investors, however the uninitiated could find buying a confusing process. In this guide we outline what you should look out for and what questions you should ask. We identify a couple of areas as hotspots and point out another location where making a decent return on your investment could take considerably longer. As an end user of a condominium, of course it’s all down to your personal requirements where you choose to reside, however as an investor seeking good rental yields and strong capital appreciation you should be aware of the warning signs.
www.facebook.com/ RealEstatePattaya www.issuu.com/ MarkBowling
Over 10,000 off-plan condominium units were introduced for sale during the second half of 2011, twice as many as the first half. 2012 looks set to break all records with at least 20,000 new units coming onto the market by the end of the year. The graph above demonstrates the massive increase of developments recently introduced, this may appear overwhelming to many so please don’t be afraid to seek assistance and use our professional guidance in making an informed decision. Whichever condominium you decide to purchase, we hope you’ll enjoy your investment for many years to come and that your time spent in amazing Thailand truly lives up to all your expectations.
Contents
Allow us to introduce ourselves Why invest in Pattaya, Thailand? Top 10 Tips Where to buy? The buying process Renting your property Reselling your property
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Allow us to introduce ourselves The beginners guide to buying a condo This step by step guide is based on Colliers International’s knowledge of the local condominium market and is designed to aid first time buyers by providing clear unbiased advice and what to look out for. Complete with all the questions you should ask and tips on how to pick a good investment to enjoy for many years to come.
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Who are Colliers International Thailand? We are a multi award winning real estate services firm with three main offices employing over 200 employees across Thailand. Located in Bangkok, Pattaya and Hua Hin we form part of the world’s second largest commercial real estate network with over 522 Offices in 62 Countries employing 12,300 Professionals across the globe.
Thailand Property Awards Best Agent (Eastern Seaboard) 2010 Best Bangkok Agent 2010 Best Agency Deal 2011 Best Commercial Agent 2011 Best Property Management Company 2011 Best Property Consultancy 2011 Best Residential Agent (Resort) 2011
Colliers International offers a full range of property solutions Project Sales & Marketing | Auction | Office and Industrial Services | Corporate Solutions | Investment Services | Retail Services | Hospitality Services | Real Estate Management Services | Research | Residential Sales & Leasing | Advisory Services | Valuation
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Why buy from Colliers International? The Colliers International Project Sales & Marketing department together with a strong Residential Sales and Leasing team are dedicated to providing an impartial professional service to our clients based on guidelines set forth by the Royal Institution of Chartered Surveyors (RICS). Our commitment to you is to offer clear and concise advice on buying condominiums and to ensure you avoid potential pitfalls. We can often negotiate favorable pricing and payment terms on your behalf to ensure you get the best possible deal.
What about after sales service?
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Colliers International has a specialised Residential Sales & Leasing team committed to take care of all your requirements, whether you wish to resell or rent your property on a short or long term basis. We take away the stress of finding suitable tenants through our corporate leasing section to ensure your property is occupied and earning you money. Unlike many other agents who solely deal in project sales, we can facilitate your investment needs through our prominent local and international offices. We can also ensure your property is managed and kept under our watchful eye whilst you’re not in Thailand.
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Thailand Property Awards Best Eastern Seaboard Agent 2010 Best Bangkok Agent 2010 Best Agency Deal 2011 Best Commercial Agent 2011 Best Property Management Company 2011 Best Property Consultancy 2011 Best Residential Agent (Resort) 2011
Asia Property Awards Best Property Consultancy 2012
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Why invest in Pattaya, Thailand? Exotic Thailand is Asia’s top tourist destination and offers a world class tourist industry at affordable prices, making it a magnet for visitors, retirees and property investors alike. Pattaya is currently in the midst of a building boom and witnessing a dramatic upturn in arrival numbers, further adding considerable demand to the region.
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Economic and cultural factors Once a sleepy fishing village Pattaya has evolved into a world class tourist destination favoured by single travelers, couples and a growing number of families. Pattaya is gradually shrugging off its unsavory image and developing into a more family oriented resort providing many activities suitable for all ages. For thousands of people who have worked in Asia for many years, Thailand is a very attractive retirement destination, in which the living
environment will feel familiar and the cost of living much lower than that of Hong Kong or Singapore for instance. Retirement visas are available for foreigners over 50 years of age with a proof of income or fixed amount deposited into a Thai bank account. Pattaya is home to several international schools, high-quality medical facilities, world class shopping, dining and leisure experiences, together with many sporting events including international Sailing, Polo, Tennis and Golf tournaments.
Thailand offers beautiful mountain ranges, dense forests, pristine sandy beaches, idyllic islands, friendly locals, delicious cuisine and cities teeming with culture and colour which repeatedly attract visitors back year after year. Year round warm weather particularly attracts visitors from Europe and Russia during their cold winter months. Peak season is between November and February. The relatively undiscovered nature of Thailand means that property prices here remain far below those in the more established European markets, although they are growing quickly and strongly (around 10% per annum). Thailand is the largest growth market in Asia. Many businesses choose Thailand as a regional hub to set up manufacturing facilities within close proximity of Pattaya on the Eastern Seaboard’s vast industrial estates. 7
Thailand has recently attracted significant foreign investment. It has become one of the Asian economic leaders and is one of the fastest-growing economies in the region. The completion of Suvarnabhumi International Airport has helped spur growth of the residen-
tial property market in Pattaya as well as made Thailand even more accessible by air. The new highway has reduced traveling time to Pattaya to just over one hour from the airport and 90 minutes from Bangkok. The country has strong business links with China and a direct rail link is currently being planned to link Southern China with the Eastern Seaboard. This will no doubt further boost the local economy and bring additional industrialisation to the outlying areas. Pattaya is geographically well positioned to welcome millions of visitors from newly emerging markets such as China, India & Russia, bringing billions of baht to the local economy. Pattaya will attract an estimated 8 million visitors in 2012 according to a source from the Tourism Authority of Thailand (TAT). Pattaya is Thailand’s premier resort destination and one of the top resorts in South East Asia. Rental potential is great, due to increased government spending luring growing numbers of tourists and an upturn in industry bringing with it a large expatriate workforce.
Top 10 tips
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As a foreigner it is possible to buy a condominium unit under your own name providing the condominium unit you select comes under the 49% sellable square metres maximum allocation to foreign buyers. In buildings that are popular with foreign buyers, it is advisable to insist upon foreign ownership whenever pos-
sible. If buying a condominium solely for resale purposes you should try to buy in foreign ownership. Thai unit pricing is often lower for a reason: it can only be sold to a Thai national or Thai company. Under Thai law, the use of nominees is not legal.
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Get in early and act quickly. As soon as a project is released it’s best to move decisively whilst you can. Cherry pick the unit(s) that best suit your requirements. The early bird catches the worm and delays in decision making can prove to be disappointing.
When considering a condominium you should try to decide what is most important to you as either an investor looking for capital appreciation or rental yields or as an end user seeking a retirement or holiday home. Low priced units may look the best value as an investment, but bear in mind a high density development consisting of over a thousand similarly sized and furnished apartments may be more difficult to resell in the future, when many units enter the resale market and supply could outstrip demand.
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If your investment strategy is to achieve an attractive yield through renting your property, it is advised that you consider low / medium density projects in areas where there is not an oversupply. Long term corporate tenants may demand easy access to the highway network, so navigating the Pattaya traffic is not an op-
tion. Retirees and long stay tourists may prefer a sea view and to be close to the beach or local amenities.
A good sized 1 Bedroom unit between 40-50 sq.m is likely to attract a longer term tenant for a minimum lease period of 6-12 months, whereas a smaller 22sq.m studio is really only suitable for monthly short term holiday lettings and may be vacant during low season (April-October). Moreover many agents may not consider listing a low income generating property for short periods due to the low commission and time involved. Of course if renting the property isn’t on your agenda, a small studio can be considered perfect holiday accommodation for your own private use.
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When buying a condominium always check what the maintenance fees of the building are. A general rule is ‘you get what you pay for’; some developments may require a very low maintenance fee but expect that the property will be poorly maintained, badly managed and will look tired in a very short period of time, which can be detrimental to you finding tenants. Expect to pay between THB 40-50 per square metre for an adequately maintained building; this will sometimes include Wi-Fi internet and local cable TV.
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You should also ask what sinking fund is payable to the juristic management upon transfer of ownership. The sinking fund is basically a contingency fund held by the juristic office to pay for building upkeep and repair work not usually covered by the maintenance fees. This may include painting the building or roof re-
pairs at a later date. In a new building the sinking fund is very rarely used for the first few years, but in older buildings the co-owners could be asked to top up the fund from time to time as necessary.
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Ensure that you check who is responsible for such things as land office transfer fee, specific business tax and withholding tax. Usually the land office transfer fee is split 50/50 and the other remaining taxes are paid by the developer or landlord, but this isn’t always the case and you could be faced with a significant un unexpected amount payable if you don’t read the contract properly.
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Use a lawyer to read through the sales & purchase agreement and handle the transfer in your absence. It’s surprising to hear that many buyers are told they don’t need a lawyer, particularly as they wouldn’t dream of purchasing a property in their home country without one, so why should Thailand be any different? A good lawyer will explain the contract to you and make sure you understand everything fully.
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Always use a reputable agent to ensure you receive the best possible advice on buying. Visit their offices to assess their ability to look after your investment whilst you’re not in Thailand. Whether you wish to rent or resell your property it’s wise to ensure you will receive a professional after sales service from someone you can trust. A professional agent
will also make you aware of any developments or developers who are best to avoid and make safer recommendations of tried and tested developers for you to consider if necessary. We provide the best possible information and resources, so you keep coming back to us each time you buy.
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Where to buy?
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Pattaya city can be divided into four zones for the purposes of this guide.
Wong Amat This is the area to the north of Pattaya Nua and is considered a more peaceful, up-market location and a relatively new setting for condominium development. Wong Amat beach is considered the finest in Pattaya and boasts several of the higher end luxury hotels and condominiums. Limited beachfront land should ensure that prices increase in tandem with the growing popularity of this area.
Pattaya This area is considered as the city centre. The section of beach from Central Road south to the harbour runs adjacent the core of Pattaya’s abundant nightlife area. Pattaya Nua and Klang are the areas favoured by Asian visitors, especially Chinese & Korean. A large number of expats working on the industrial estates also prefer this location due to easy access of the main highways. The area of South Pattaya is popular among Middle Eastern, South Asian and Russian visitors. The area behind the Avenue Shopping Complex on Soi 15 linking Second Road with Soi Buakow is experiencing a sharp increase in development with prices increasing exponentially due to its close proximity to all the local amenities and entertainment.
Pratumnak Located to the south of Pattaya and bordering Jomtien, Pratumnak is considered a quiet residential area with a mix of houses, luxury villas, high and low rise condominiums. Pratumnak features two secluded beaches, Cosy Beach and Haad U Thong which are popular with Russian and Scandinavian visitors.
Tighter restrictions on condo development and limited availability of land plots should ensure that property prices in Pratumnak will increase steadily for the foreseeable future. Just a few minutes from Pattaya city, this area is very popular for longer term tenants seeking the best of both worlds.
Jomtien Jomtien beach is about 1 km south of Pratumnak Hill. The locale is home to many highrise condominiums, beach front hotels, shops and restaurants. The area at the beginning of Jomtien is considered busier, while the area located at the end of this beach known as Na Jomtien is considered to be much more peaceful and less congested. Recently Jomtien introduced a new second road which now cuts through the centre, thus avoiding heavy traffic on beach road particularly on weekends. With the opening of this new road we have experienced a sharp increase in resort style condominium development, which should be taken into account if your intention is to buy for investment or rental purposes. There is also an abundance of land still available in Jomtien, which will ensure the area will continue to see unprecedented development for many years to come.
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The buying process
Once you’ve decided upon which project and which unit best suit your individual needs, the only way to secure the property and to stop it from being sold is to pay a booking or reservation fee. The fee generally ranges from THB 50,000 – 100,000 depending on what level of property you’ve chosen. The booking fee shows you are committed to buying the property and is generally non-refundable as a rule.
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Once you’ve reserved the unit and it’s been withdrawn from the open market you will be expected to pay a larger deposit usually between 20-25% of the purchase price upon signing the sales and purchase agreement. This usually occurs 2-4 weeks after the reservation has been made, which generally allows visitors to return home and to make the bank transfer. It is not necessary for the buyer to hold a local bank account in Thailand to purchase property, but it is recommended if a rental income is generated from the property when completed. When transferring funds to the developer’s account it is essential that you only send foreign currency such as USD, GBP or EUR. Not only will you receive a more favourable exchange rate from Thai banks than you will from your overseas bank, but sending foreign currency is essential in obtaining foreign ownership of your condominium. You should include “To purchase XYZ condominium” in the reference box of your funds transfer form on each payment sent, this will also ensure you receive the property in foreign ownership as you will need to show proof of funds entering Thailand for the purpose of purchasing a condominium.
Depending upon how long the scheduled construction period of your selected unit is, you will be asked to make a monthly payment over the entire period, whether it be 12, 24 or 36 months. The amount required over this period is usually between 30-50% of the purchase price, however we can at times negotiate these terms on your behalf in order to provide a tailor made payment schedule to meet both the buyer and seller’s individual needs.
is generally through a backlog of work at the land office and not cause for serious concern. When the Chanotes become available it is advisable to engage the services of a lawyer to thoroughly check through the documentation and to facilitate the transfer of ownership. Upon transfer of ownership you will also be required to pay for additional expenses such as deposits on your water and electric metres, together with sinking fund and the annual maintenance fees in advance.
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Once the construction is completed our job is to assist with a full inspection of your property and to carry out a snagging list, making sure that everything is in full working order and that the level of workmanship is to a satisfactory standard. As soon as the unit has passed all requirements it is expected that the final payment be made to the developer upon acceptance. There is usually a time delay in your acceptance of the unit and receiving the Chanote (Land title deed) from the land office. This
Renting
your property Colliers International Thailand have many years of experience leasing residential property to short term holiday makers and long term corporate tenants. We ensure a full inventory is completed and photographs are taken when a tenant moves in and fully checked off when the tenant vacates the property, this ensures there are no disputes over missing or damaged items during the lease period.
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We prepare the lease agreement, manage the check in/out, collect a security deposit and ensure the rent is paid promptly into your account. We can also ensure that any maintenance or repairs that need addressing are dealt with efficiently, to ensure your tenant is satisfied at all times and the property well looked after. We can also arrange maid cleaning service to prepare your property prior to viewing by potential tenants.
A well presented and tastefully furnished condominium in a prime location can provide a very good return indeed. Many investors in Pattaya build up a large portfolio of properties, often using the rental income to continue to buy into additional off-plan projects. It’s not unheard of for investors to hold over 50 apartments bringing in an average yield of 8-10% net per annum, which in the current climate can be considered a safer option to having your money tied up in potentially volatile stock markets.
“Could this be the 8th Wonder of the Modern World? Can it be true, a Condo in Wong Amat Beach for Under
1 Million Baht?”
Yes it is True, you can now own a condominium in the exclusive area of Wong Amat Beach for less than 25,000 EUR, 31,000 USD or 20,000 GBP – FULLY FURNISHED! Serenity – Wong Amat is the latest project from the highly regarded, award winning Nova Group and is located just a stone’s throw from their hugely successful Palm condominium. Comprising 8 stories 153 Studio, 1 and 2 bedroom units, Serenity is just 200 metres from the nearest beach. Not only does Serenity tick all the boxes as a perfect holiday getaway and weekend retreat, this prime development is anticipated to offer early bird investors a strong capital appreciation over the 18 month construction period, together with higher than average rental yields thanks to it’s sought after location and ingenious room layouts. All units include the following items: 32” or 40” Flat Screen Televisions (Both in 1 & 2 bedroom units) Television Cabinet Fridge Freezer Queen Sized Bed & Mattress 2 Seater Sofa Fully Fitted Kitchens with Cooker Hob and Extractor Fitted Wardrobes Fully Fitted Bathrooms Built in Ceiling Air Conditioning Units Thailand Property Awards Best Eastern Seaboard Agent 2010 Best Bangkok Agent 2010 Best Agency Deal 2011 Best Commercial Agent 2011 Best Property Management Company 2011 Best Property Consultancy 2011 Best Residential Agent (Resort) 2011
Asia Property Awards Best Property Consultancy 2012
Reselling
your property 19
Early bird investors maximise their investment potential by buying in the pre-launch stage of a newly introduced project. By moving in quickly on the prime units within a building, they carefully select the units that everyone else will want at a later date. This is a smart way to achieve excellent returns for very little investment, but it can be risky if things go wrong. As an example and for the sake of this exercise let’s say an investor (A) buys a prime unit during the pre-launch stage for THB 10m in a brand new development. He pays a deposit of 20% and then starts paying his 30% stage payments over the construction period of two years. After the first year buyer (B) expresses an interest and specifically wants this prime unit, by which time the developer has already increased his prices by 25%. Investor (A) has paid THB 3.5m or 35% of the original selling price in the first 12 months, but
now the property is worth THB 12.5m according to the developers price list. Buyer (B) agrees to buy the property and pays investor (A) THB 6.0m which includes payments already made to the developer and the 25% price increase. By investing in the very early stages of the project investor (A) has cleared over 70% profit in just one year. This however is a gamble and you need to research the market fully or ask for assistance from a reputable agent before taking on this kind of investment strategy. A badly chosen project or poorly selected unit can make all the difference between a successful resale and being stuck with a property you had no intention of seeing through. You may even find yourself out of pocket if you’re unable to make the final payment to the developer.
Affordable Beachside Living at Na Jomtien, Pattaya
from only THB 988,760
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EASY PAYMENT PLAN
10 %
10,986
70%
Deposit
per month
balance
Thailand Property Awards Best Eastern Seaboard Agent 2010 Best Bangkok Agent 2010 Best Agency Deal 2011 Best Commercial Agent 2011 Best Property Management Company 2011 Best Property Consultancy 2011 Best Residential Agent (Resort) 2011
Asia Property Awards Best Property Consultancy 2012
Our job is to provide clear unbiased advice on which projects you should consider and to assist you with careful unit selection. We are the only real estate agency in Thailand to produce a thorough condominium report twice yearly to provide you with an educated insight into current trends and market conditions. Once you’ve selected your property we can provide advice on setting your resale price, list your property on our website and offer extensive advertising. Buyers regularly come to us for specific resale units when they see that a project appears to be sold out on a 21
developer’s price list, but understand many of the original investors would have made their resale units available for purchase.
city center residence
New project right in the heart of busy Pattaya.
City Center Residence, Pattaya is an ideally situated condominium project for those seeking utmost convenience with all that the city has to offer within easy reach. Perfect for owneroccupiers and also an ideal investment with high yield potential, City Center Residence offers everything the thrill seekers of Pattaya expect from a holiday residence right on their doorstep. Several unit types are available, fully furnished from an unbelievable 1.39m for a studio suite or 2.19m for a 1 bedroom apartment. • Year of completion - February 2015 • Number of buildings - 3 • Number of apartments - 668 • Swimming pool - communal • Security • CCTV • Internet - WI-FI • Parking • Gym (fitness) • Garden • Kid’s playground
Residences Facilities: • Luxury swimming pool • main pool/ lap pool / pond • Landscaped gardens with water fountain • Children pool • Fitness center • Underground Parking • 24 hours security • WI-FI Internet • Telephone line • CCTV • Each building with separate lobby • Room cleaning service available
Construction starts 1st quarter of 2013, estimated completion 1st quarter of 2015 Thailand Property Awards Best Eastern Seaboard Agent 2010 Best Bangkok Agent 2010 Best Agency Deal 2011 Best Commercial Agent 2011 Best Property Management Company 2011 Best Property Consultancy 2011 Best Residential Agent (Resort) 2011
Asia Property Awards Best Property Consultancy 2012
Pattaya Office 519/4-5, Pattaya Second Road (Opposite Central Festival Pattaya Beach) Nongprue, Banglamung, Pattaya, Chon Buri 20150 Thailand Tel: (6638) 427 771 Fax: (6638) 427 772 Email: info.pattaya@colliers.com
Bangkok Office (Head Office) 17/F PloenChit Center, 2 Sukhumvit Rd., Klongtoey, Bangkok 10110 Thailand Tel: (662) 656 7000 Fax: (662) 656 7111 Email: info.th@colliers.com
Hua Hin Office 27/7 Petchkasem Road | Hua Hin, Prachuabkirikhan 77110 Thailand Tel: (6632) 530 177 Fax: (6632) 530 677 Email: info.huahin@colliers.com
www.colliers.co.th