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The Importance of Real Estate Research

Nov 28, 2017 | Emerging Trends Advisors, Thailand

It is only natural that real estate developers will try to obtain as much information about the local real estate market as possible. This information needs to be not only comprehensive but also accurate, and it is often the search for reliable information that is the most difficult. Generally, this information isn’t available, certainly not publicly, so many developers will employ their consultants and analysts to compile their data.

Real estate market research is required to understand market conditions and trends as well as to get a better understanding of what customers and potential customers are looking for. Many developers will ‘hold’ land waiting for the right opportunity to start construction to maximise their profits. They will need to establish who their target audience is and what property they should construct. Doing this without accurate information is impossible.

Sometimes developers will also look to purchase land for a particular type of project. Once again, information regarding this project will need to be collated. Is the demand for high-end condominiums, hotels or rental properties? You also need to establish that there isn’t an oversupply of these types of property and that the forecasts for this market are positive in the medium to long-term.

The property market in Thailand is extremely competitive. Developers need to be entirely focused on market trends and be leaders and not followers. All too often the followers arrive too late in the marketplace but to be a leader you need this reliable information. Any developer worth their salt should carry out extensive research before embarking on a new project.

In many developed countries, information regarding the real estate market is readily available online. Even the general public will be able to search for specific transaction information such as sale prices or market trends. Of course, greater transparency aids bringing buyers and sellers together and leads to an efficient marketplace. The fact that buyers, sellers and even lenders have access to this information means that everyone is competing on a level playing field. It would be foolish to think that transparency guarantees that everything will run smoothly as housing bubbles can still occur, but the chances of being caught out are significantly less in more transparent countries.

Sadly, Thailand is not particularly transparent with the data that is presently available although massive steps are being taken to address this. Developers, banks and the Land Offices are working closely together to try and establish accurate and comprehensive information that everyone needs. It is expected that price data on actual transactions will soon be available online – something that will surely be welcomed by all parties.
Of course, it is not only developers who require accurate and comprehensive information, and it is buyers too. As we have seen, particularly in Pattaya, Thailand is becoming a popular destination for property investors looking to make the most of the relatively low land prices and potentially high returns that can be generated. As with all markets, some deals are better than others so investors will need accurate information on which they can make decisions.

The property market in Pattaya has changed significantly in the last few years and to current trend is for rental guarantee concepts. That doesn’t mean to say that other properties are not desirable, but they do carry a more significant element of risk than projects that offer a guaranteed rental return. Quality, advisers such as Emerging Trends Advisors (ETA), will have carried out their due diligence and research into projects. This means that they can offer investors accurate advice giving them greater confidence.

The more information that buyers, sellers, lenders and investors have, the better it is for everyone.

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