How much have the fluctuating exchanges rates effected the Pattaya Property Market?

Pattaya-Property-MarketThe British Ex-pat will be pleased to hear that the pound closed at just over 48 Baht to the pound on 11th June 2013 following a recent low of under 43 Baht. However, if you are a seasoned traveler or have made Thailand your second home the Baht per pound ratio seems to be staying well below 50 to 1 of late. Not so long ago in 2005 the British enjoyed 75 Baht to the pound and in early 1998 for a while the rate peaked at just over 90 Baht. (This was fueled by the Asian Financial crisis of 1997). Previously, however, the Baht had been much stronger than today, but what effects have these fluctuating exchange rates had on the Pattaya Property Market?

Over the last few years the number of British visitors and ex-pats in Pattaya seems to have declined, this is down to several factors. Firstly the recession in the UK and Europe has resulted in the potential traveler cutting back on expensive trips abroad and many of those considering retiring to exotic foreign shores have had to re-think their plans due to pension schemes performing poorly. The reduced Baht per pound ratio has also resulted in some retired ex-pats selling up and heading back home and prevented many would be buyers from purchasing property in Thailand. In reality though the number of Brits visiting or relocating to Pattaya has increased! (With a temporary dip between 2010 to 2012), but this has been eclipsed by the increase in the number of Russian tourists and property buyers, thus giving the appearance of decline in the number of British, Americans and other Europeans in Pattaya. In March 2007 Thailand and Russia implemented a mutual visa waiver agreement. This enabled Russians to visit Thailand on a standard tourist visa and has led to the rapid rise of the number visiting and relocating to Thailand. Pattaya is now being promoted to the Russian and Asian markets as a family holiday destination, so the type of tourists and would be buyers for property is changing too. This can be seen in the number of family orientated hotels and attractions that have opened or are currently being developed.

Many of Thailand’s visitors are also from India, China, Malaysia, Singapore and South Korea and outweigh the number of European tourists. There is a growing trend for property investors from Singapore buying condominiums in large numbers off plan in Pattaya to re-sell at a profit when complete. Property prices are far more affordable in Thailand compared to Singapore. South East Asia in particular is currently developing at a pace not seen in Europe since the industrial revolution and this literally creates new millionaires every day, Pattaya is a great place for many of these to invest, particularly in construction developments and property.

So, the fluctuating exchange rates have had some effect on the Pattaya Property Market, but it seems that there are other factors at work too that are having just as much if not more of an impact. Many expats, the British in particular, may be a little more cautious when it comes to investing but there are a growing number of Asians and Russians that are enjoying their ability to buy.

The future for the Pattaya Property Market looks rather interesting with a recent United Nations Populations Division report indicating that many western tourists that currently visit Pattaya will retire there based on their reduced pension funds affording them a better standard of living in a warmer climate. This really is where a stable and plentiful exchange rate will have the biggest effect. Time will tell.

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