Pattaya has an image problem. Conventional wisdom holds that the seaside city is a uniformly unsavory red-light destination, one that’s far from family-friendly and somewhat at odds with up-scale real estate development. And many people feel that the city’s reputation is well-deserved: It does, in fact, contain a proliferation of neon-lit go-go bars, ramshackle pubs, threadbare hotels, and tattoo parlors. And — most of all — Pattaya is home to swarms of middle-aged foreign men attracted to the city’s raucous nightlife and anything-goes attitude.
For the last several years, however, Thailand´s real estate industry has argued that Pattaya is changing for the better, that it’s becoming a more conventional beach-side resort town. But is this really the case? What is the current state of Pattaya’s real estate market? And what does the future have in store? Will a slew of new real estate developments help clean up Pattaya’s image?
“A more diverse expat community”
“In the past, [Pattaya] had a reputation as being seedy, a sex tourism trap,” says Arthur Napolitano, managing director of property developer Kudu, which is currently working on The Lakes at Phoenix, an upcoming luxury condominium project on the outskirts of Pattaya. “But if you look at the area around the Dolphin round-about, you’ll see that things are changing. Amari spent something like Bt200-300 million on Mantra restaurant,” he says, referring to the sparkling new pan-Asian restaurant that has attracted positive media attention in a city not known for its glamorous eateries. “Beer bars have been demolished,” he says. “There’s a California Fitness coming, a big Central department store is coming. While Pattaya will never shed it’s image, it’s becoming gentrified.”
Henri Young, marketing director of developer Raimon Land, points to several new projects aimed at a more sophisticated clientelle. “The people behind J Avenue are launching a mixed-used development. And you can look at what Amari’s doing with Mantra,” he says. “More five-star international hotels are looking at Pattaya for sites.” And even though it’s no longer new, “the Sheraton having a property in Pattaya is attracting a different sort of clientelle…now there’s a more diverse ex-pat community,” he says.
“We’re seeing a lot more families,” says David Gray, director of East Coast Real Estate. A long-standing Pattaya property expert, Gray says that the city´s demographic may well be changing. “Now whole families are coming over, not just single men. The schools — like St. Andrews International School — are expanding rapidly. There are great options here.”
Pattaya is slowly cleaning up, says Clayton Wade, of Premier Homes, another well-established local figure. “And I wish it would rub off a lot more on the real estate industry,” he adds. “It’s getting sleazier by the second.”
Raimon Land´s Young notes that Pattaya’s emerging distinction as a sailing destination is adding value to the market. “The number of boats at Ocean Marina has increased,” he says. “People are actually mooring their boats there now. It’s added to the variety of recreational options. Golf, of course, is one of the prime attractions since there’s something like 20 golf courses in Pattaya,” he says. But sailing is a burgeoning attraction: “The wind compared to other parts of Thailand is more consistent in Pattaya,” he says, pointing to the success of Pattaya’s annual Top of the Gulf International Regatta, sponsored by Raimon Land, Jomtien’s Ocean Marina Yacht Club, and Thai Airways.
While developers might point to how Pattaya is changing, the resort´s bad-boy vibe is alive and well in the center of the city. On Pattaya Beach Road and along Walking Street — Pattaya’s central ocean-front avenues — the number of families to be seen out and about on a weeknight can be counted on one hand. (While couples with children may well choose to steer clear of this area, it still contains the bulk of Pattaya’s commercial activity.) And throughout downtown Pattaya, pharmacies display large advertisements for drugs such as Viagra, Levitra, and Cialis. Adjacent to one such pharmacy on South Pattaya Road is a small medical clinic with a sign in the window: “HIV Quick-Tests.”
And then there are the newspaper headlines. Bangkok and other cities in Thailand certainly have their fair share of unlawful activity. But if Pattaya’s local papers are any indication, there seems to be a concentration of illegal dealings and violence by the sea.
The Pattaya Today news headlines from the July 1-15 edition included, in the space of just two pages, the following headlines: “Uzbek prostitutes arrested en mass: Problem getting out of hand;” “German ex cop found shot;” “Suspected pedophile arrested;” “Faithful dog guards corpse;” “Woman drowns in paddy field well: But husband didn’t know her name;” “British restaurant owner dies at home;” and “Unhappy Norwegian hangs himself: Fell in love with go-go dancer.” Meanwhile, the Pattaya Mail from June 29 supplied these other curiosities on page 4: “Hungarian’s sex pills story doesn’t stand up;” and “Swedish businessman dies after eating som tam.”
“There will always be bumps in the market”
Pattaya’s current real estate market has not been immune to the governmental instability in Bangkok. “It’s quite slow compared to last year,” says Khun Aliwassa Pathnadabutr, Managing Director of CB Richard Ellis Thailand. “One of the reasons is politics. It has happened in Bangkok, too. The overall perception from buyers and investors is that it’s not the time to buy,” she says. But the situation will begin improving, she feels, once new elections are announced.
Khun Sombat Chancharoensin, Managing Director of developer Wise Power Land, which is developing a popular condominium and villa project, says that although the market is a bit sluggish at the moment, “the demand is still there, and people are just waiting for new elections.”
Right now, says Young, “it’s the low season, so there’s not as much tourism traffic coming through town. That will pick up in October or November. We’re currently experiencing a seasonal change, as tourist traffic drives a lot of condo sales.”
“The real real estate market is fine, but the speculative market has crashed,” says Wade of Premier Homes. “But even though the boom might be over, the real existing real estate market is doing well and fine.” The Kingdom’s political instability, he says, “has almost killed the market.” But he remains upbeat: “Having said that, Thailand has always been resilient, and I can see the comeback to normality already well under way. I’m very confident that the new government can get the foreign interest in Thailand’s real estate back on track.”
Gray is also cautiously optimistic. “The property market is still here. Houses and land are still selling, but fewer people are jumping in, and some people need to get out. Prices are dropping. Some properties are undervalued. But things are still selling okay,” he says. “What we need is clarification on the political situation. When people know what they can and can’t do, a lot more people will start buying…We need the new government to clarify things. Then hopefully people will commit to buying. Thais are affected just as much as foreigners. They need guarantees, too.”
Stu Sutton, of local agency Jomtien Property, also believes that the market will survive. Things are looking up now, he says. “The dust is starting to settle after the coup. House sales still sluggish, but there’s more interest in condos.” The political uncertainly is troubling however, and he says time will help eliminate some of the uneasiness. “Grey areas make people nervous,” he says. “It’s always a roller coaster ride in Thailand — we had SARS, bird flu, the tsunami, these issues with the government, the violence in the south. But the market is very resilient. There will always be bumps in the market — that’s Thailand.”
Projects on the horizon
Of the new projects coming to Pattaya, perhaps the most prominent – at least in terms of architectural impact – is Ocean 1 Tower, a luxury condominium development which, at 367 meters in height, will be Thailand´s tallest building and one of the largest residential constructions in the world. The developer, Siam Best Enterprises, hopes to break ground soon at their Jomtien beach site, with completion slated for 2010.
Another prominent development is Raimon Land’s Northpoint, a large, high-end condominium project in the Wong-Amat area of Pattaya, north of Pattaya Bay. Raimon Land is credited with kick-starting interest in Pattaya with a previous project, Northshore, and their new follow-up development will consist of two buildings of 54 and 64 floors.
Kudu’s The Lakes at Phoenix is another notable upcoming project. Located on a 14-rai site near the Phoenix Golf and Country Club 15 kilometers outside of Pattaya, the development will comprise two low-rise, low-density buildings. Construction is expected to start in the third quarter of this year, with an anticipated completion date of 2009.
CB Richard Ellis’s The Sails has a particularly striking planned design: the luxurious beachfront condominium project will be shaped like two enormous sails. One tower will house condos, while the other will be home to a hotel. The Sails will be located on Jomtien beach; it’s due to be completed in mid-2008. Another Jomtien development, La Royale Beach, will offer both villas and condominiums.
Clayton Wade says to keep an eye on three of these new projects: Northpoint, Ocean 1 Tower, and The Lakes at Phoenix. “If they do well,” he says, “the market will do well.” Gray, meanwhile, says that the splashy new developments may grab headlines, but the smaller projects shouldn’t be overlooked.
“Some of the local projects are doing very well,” he says. “For example, A.D. Condo, in Wong Amat — probably 90 or 95% is sold already. And it’s probably 60% Thais, 40% foreigners. They offer payment schemes, and the average price is something like Bt25,000 per square meter.” He also points to La Royale, in Jomtien. “People are interested in the projects that have sold enough to guarantee completion,” he says. Ninety per cent of the other developments can’t say that.” Another project worth watching, he says, is Town and City Gardens. “They have two bedrooms for Bt4 million baht — these will sell, and they have been selling. Thais are buying.”
Young says he’s encouraged by Raimon Land’s progress in Pattaya. “We’re still making steady sales at Northpoint, and some encouraging re-sales,” he says. “One recently made a 20% gain on purchase price over a period of eight months.” And he’s sanguine about the project’s prospects for success. “People like to see the evidence of construction,” he says. “A lot of people in Pattaya buy and want to move in as soon as possible. They’re coming for holidays and they have a sense of urgency about them, more than, say, in Phuket.”
“If the situation improves and confidence returns, Pattaya is a city where you have everything,” says Aliwassa of CB Richard Ellis. “There will be consistent demand. Pattaya may not be booming all the time, but there’ll be consistent demand for the market.”
“When I started, years ago, there were three or four agencies, and four or five villages,” says Gray. “It’s only been in the last two or three years that the new developers have started coming in. Northshore satisfied a lot of pent-up demand for something new.” In the future, the market will continue to thrive. “The main thing is that the infrastructure is improving,” he says, noting that new malls and other attractions are in the works. “It’s a good place,” he says. “The market is there.”
Young notes that the market is shifting, and this will affect Pattaya´s future development. “What’s happening is that [the market] is being segmented a lot more. Before, all projects could be lumped together. But now the northern end of Pattaya has become a premium area, along with Jomtien,” he says, adding that Raimon Land is still actively seeking out new projects.
“I think there’s a lapse in the middle market,” he says. “There are a lot of lower-end projects and higher-end projects, but there’s a bit of opportunity between say Bt60,000-90,000 per square meter. People will start to realize, especially when the new expressway is completed, [Pattaya’s] appeal as a weekend destination across all market segments. Prices that seem relatively high compared to Bangkok will actually be good values.”
“[Pattaya] has started to improve,” says Khun Aliwassa. “Pattaya…can be a nice place for families, but it may take a bit more time for people to see this.”
By Newley Purnell