Pattaya profits from Russian property buyers

Blue Vision Agency Pattaya

Innar Tammisaar, an Estonian, never thought he’d live to see the day that he was thankful for the Russian language.

“Now I’m happy I speak Russian even though I hated learning it,” said Tammisaar, director of the Blue Vision Agency at the Pattaya beach resort.

Like many new property agents in Pattaya, Blue Vision advertises its services in both English and Russian, a sign of the times.

Pattaya, is Thailand’s oldest, most developed beach resort. Russians, in particular, can’t seem to get enough of the place.

In 2007, 889,656 Russians visited Pattaya, up 84 per cent from the previous year, making them the leading market for the resort after only Thais, 1.51 million of whom checked into Pattaya hotels last year.

Although Russians have been visiting Pattaya for more than a decade, only in the past two years have they started to buy up Pattaya properties. And the trend is catching on.

“I think this year, Russians will account for 40 per cent of property sales in Pattaya,” predicted Uriy Segal, the Russian president of Russian House, another newly set-up Pattaya property agency.

Last year, Russian buyers accounted for 22 per cent, or 7.7 million dollars of condominium sales made by Raimon Land, the developer of such luxury, beachside properties as Northshore Pattaya and Northpoint, which sell for more than 4,000 dollars per square metre.

That price might be high by Thai standards, but it’s cheap by Moscow’s.

“Nowadays, if you buy a condominium in Moscow, just the parking place costs 150,000 euros,” said Segal, who added that Moscow condominium prices have peaked this year at close to 20,000 dollars per square metre.

“Russian people now have money, and they are looking for property investments in China, Thailand, Cambodia and Vietnam because in Russia property is too expensive,” he said.

For Russian buyers, Pattaya still looks like a bargain in many respects.

“It’s a nice holiday destination,” said Linda Ord, general manager of the Pattaya office of the CB Richard Ellis real-estate company. “There’s shopping, great weather. There are plenty of places to eat, including a dozen Russian restaurants, and of course, it’s cheap.”

Pattaya bay and its beach, once upon a time the site of a peaceful fishing village, was first discovered by American soldiers based in Thailand during the Vietnam War and then rediscovered by European tourists (many of them of the sex-tourist variety) in the late 1970s and 1980s and rediscovered once again by South Korean, Chinese and Russian tourists in the late 1990s and 2000s.

Before Russians rushed into Pattaya’s property picture, the main buyers at the resort were British, Germans and Scandinavians, many of them looking for a second home abroad or a retirement spot.

Scandinavians, like Russians, have proven a big and growing market for properties in Pattaya and the Pattaya neighbourhood in the past two years.

Thai-Scandinavian joint ventures, for instance, have put 4.8 billion baht (152 million dollars) of new condominiums and villas on the market in neighbouring Rayong province and 259 new units in Pattaya, just catering to Scandinavian buyers.

“Russia and Scandinavia have similarities,” Ord said. “Both places have terrible winters, so for a few months, they like to come here.”

Another similarity is that both Russian and Scandinavian sales tend to be handled through their own national networks. At some Scandinavian projects, it is a requirement that buyers must speak a Scandinavian language.

“The main stumbling block with the Russian market is the language problem because they don’t speak English, even the wealthy ones, and this is why there are many more Russian property agents coming up in Pattaya,” Ord said.

Oddly, the option of studying English has become one of Pattaya’s many attractions for Russian investors.

“Some families stay here during the winter for six months and put their kids in Pattaya international schools,” Segal said. “If they want an English school in Russia, it will be very, very expensive.”

And what about the Russian mafia? When will they move to Pattaya?

“They have too much work in Russia,” Segal joked.

Russian-speaking Tammisaar, the Estonian property agent, is not so sure.

“The Russian mafia may not have moved here yet, but their money sure has,” Tammisaar said.