Expert Agent Interview: Beli slon - Verona Konrad


  Beli Slon
(TH) +66 92 712 5959 - Mob.: +66 86 15 000 79

Verona Konrad

Verona Konrad


  1. In which country do you sell property and to what level has the real estate market in your country been affected by the global crisis?

We are active in Thailand, namely in the resort areas of Pattaya, Phuket, Samui, and Hua Hin. As anywhere, we do feel the impact of the global crisis and the region which has suffered most is Pattaya. Previously the Russians accounted for about 30% of the total number of buyers but today, due to the obvious economic reasons the overall demand is down. However, this is not the biggest problem which we have encountered. There is also the fact that some buyers, who have bought units in condominiums under construction for payment by instalments, are no longer able to afford their future payments. The decreased numbers of buyers have forced many developers to put their projects on hold. This is mainly true for Pattaya.

In the more expensive regions like Phuket, Samui, or Hua Hin, which has attracted significant foreign investment, there is neither speculation nor profiteering on the market right now. However if we look at the luxury property market in Pattaya, we see more or less the same picture: nobody is selling property at half-price. Those who can afford to purchase prime real estate usually do not have affordability issues. Obviously now their payments have increased too but they still have no problems continuing with scheduled payments.

  1. Have property prices risen or fallen in the last 12 months, or have they bottomed out?

How is the price on newly built condominiums calculated? The first thing to consider is inflation, which has remained unchanged for the last 30 years in Thailand and is about 3%-3.5% annually; then there are costs of labour and building materials. When compounded, we have an annual 10% rise in prices. These prices are offered by developers. It is much harder to estimate the secondary property market in Pattaya, as some districts record price increases of up to 20% per year and in others, between 4% and 6% is a more realistic level.

  1. What advice would you give property owners in your area now who are thinking of selling up?

I would advise them to wait. It is not a sellers' market but a buyers' market right now. Any crisis is the best time to buy marketable units which otherwise could not be found at such low prices. Right now we have a lot of apartments to offer at a price even lower than those offered by developers.

  1. It means that it is a hot time for investors.

No matter whether you are planning to resell your property in the future or to rent it out � nearly all units on sale in newly built condominiums will soon be completed.

  1. Does property in Thailand represent good value for the investor and if so, why?

It does. Not only does it represent good value; it is quite stable. Thailand and Pattaya are popular tourist destinations enjoying high demand. It is possible for foreigners to buy property in Thailand which actually makes long-term investments very attractive to overseas investors. There are a couple of projects on the market with 10% annual rental income guarantees for 10 years. It is next to impossible to encounter a similar opportunity in any other property market in the world and it's no surprise that these programmes are still in high demand.

  1. Do you believe the local Government in Thailand is actively encouraging or discouraging foreigners into buying property? How and why?

I believe that the Government has provided good opportunities for foreign citizens to own freehold units in condominiums: up to 49% of the living area in such buildings can be purchased by individual foreign investors.

  1. What would you estimate the percentage split between local buyers and international buyers?

In the regions we operate in, foreigners prevail. If you look at the capital, then you will find the overwhelming majority of homebuyers are Thai. During the last two years local buyers have become more active in the seaside resort areas, too. They do not buy apartments as their second home, as they used to; now they invest.

  1. Which country do you find the majority of your property buyers are coming from? Has this changed significantly over the last 5 years?

The international demographic of buyers changes constantly. First the Americans came, followed by the Europeans. Step-by-step they reshaped the local real estate market, giving it a more appeal for foreigners and they also launched new projects. Then came the 'Russian era', and right now the Chinese are taking over the part of the market which previously belonged to the Russians. The Chinese buyers are straight and determined and we expect their number to grow. They are already buying and buying in a very organised manner.

  1. How long will it take the property market in your country to return to pre-crisis levels?

At least two years. It is the shared forecast of all players of the local real estate market. In two years all the projects which are now under construction will be completed, and we will deal with the finished product. The main task for the developers right now is to complete all their projects and not to leave those ugly skeletons of neglected constructions. The following six months will be filled with speculation, after which the market will start its recovery.

  1. What can we do to avoid the same situation again?

Now it is obvious that many purchases were made under the influence of the moment. Both the real estate agencies and developers did not attach much importance to 'due diligence'. We have to learn more about our customers in the future in order to better understand what they can afford: it is common practice all over the world nowadays.

We hope that the current crisis will help all of us draw a good lesson and become wiser; to think not only about short-term financial benefits, but about the long-term perspective too. We all should realise that payment by instalments can easily become difficult if circumstances change. Three years ago, when developers used their own funding and sold units to buyers on instalment payments, nobody could imagine what impact it would have on the market, which still depends on tourists to a significant extent.

  1. What's the biggest benefit for investors buying in Thailand over anywhere else?

I am absolutely sure that a prudent investor should not put all their eggs in one basket and different markets should be considered. However, the biggest benefit of Pattaya is the absence of seasonality. It means that one can earn on rentals all year round. Long-term rentals are in high demand. There are rental guarantee offers allowing investors to choose an apartment, transfer the money, and start getting revenues immediately. Return on investment is also high compared to other real estate markets, with Pattaya potentially reaching 12%-15% per year. Also of note is the fact that we deal with newly-built homes which continue to increase from 5% to 7% per year.

  1. What attracted you to selling property in the region?

I was attracted by the prospect for development. I clearly understood that there was a lack of good real estate agencies on the market and the market itself looked dynamic, but chaotic. I believe that any property market works better when managed by real professionals; professionals who know what they are doing, who communicate with each other and who work together hand in hand for the sake of everyone.

Agent Profile

  Beli Slon
(TH) +66 92 712 5959 - Mob.: +66 86 15 000 79


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