Formerly best known in the tourism business for its sleazy nightlife, Pattaya is enjoying Southeast Asia’s earliest second-homes property boom, and the buyers are first and foremost wealthy Europeans and Americans.

Last year, the resort sold more than $230 million of beach side condominiums – more than 7.7 billion baht – mostly to foreign buyers.

Though modest by international standards, the construction boom – there are almost 300 condominiums and residential projects under way in the Pattaya district – has already raised relate to about exacerbated water scarcities and rising offense against foreigners.

And the boom is pricing towns out of the market.

“Four or five years ago, you could buy any condominium unit for about $30,000 to $35,000,” said Clayton Wade, managing director of the Premier Homes Real Estate Co and a longtime Pattaya tenant. “They have all at least tripled.”

The costs are being ramped up by the insufficiency of reasonably priced vacation accommodations in the United States and Europe, a growing epidemic market for beach-side realty and a lot of gambling, including some money- laundering activity.

“We’ve got plenty of monkey business in this town,” Wade conceded.

Similar housing booms are occurring at Thailand’s other beach resorts – Hua Hin, Samui and Phuket – and to a minor degree in other Southeast Asian objectives, especially on Indonesia’s Bali.

And the take-off in second-homes sales is not restricted to Southeast Asia.

Europeans are flocking to Croatia and Bulgaria to snap up Mediterranean villas that are cheaper than what’s on proposal in Spain. Americans are going south to Mexico, Costa Rica, Panama, Nicaragua and Honduras in search of affordable getaways.

The worldwide migration from the developed world has been unleashed by a number of factors. For starters, there are a lot more filthy rich people in the wealthy countries, and much of this new riches has been generated off property.

Pursuant to estimates by The Economist magazine, the value of residential real estate in developed countries increased by more than $30 trillion from 2001 to 2005, a multiplication equal to 100 per cent of those countries’ gross domestic products.

The Economist’s dire forecast in 2005 that this property boom is the world’s biggest bubble that is about to kaboom has yet to be actualized. Instead, the bubble has spread to more far-away shores.

“Globally, what’s happened now is there are a lot of people not just buying a second home but finding that investing in real estate makes money,” said David Simister, chairman of the real-estate company CBRE Richard Ellis in Bangkok.

Simister is selling luxury properties on Thailand’s Phuket island, some of which are fetching up to $5 million. The foreigners who are buying these real estates are commonly reselling them at a huge profit.

“People are very understanding investors,” Simister said. “They understand property is an appreciating asset and total beachfront or ocean view is a limited commodity.”

In other words, the realty boom has gone global. It helps that the world is a much more connected place and that even far-flung locations are often easily obtainable.

At your $5 million villa in Phuket, you are a hour’s drive from an international airport that can take you to any country in the world. And rather than queuing at a travel agent’s you can book your ticket via the internet from your home computer while watching CNN on cable TV and munching on some Kentucky Fried Chicken, home-delivered.

This is all great news for the rich. Construction on deluxe condominiums and villas is also good commerce for local economies, providing occupations and new markets for local suppliers of goods and furniture.

But there are downsides.

Take a look at Spain, which brags the biggest second-homes business in the world, worth more than 4 billion euros ($5.2 billion) in sales annually.

Foreign buyers have driven up housing prices at double-digit rates, making accommodations largely unaffordable for most Spaniards. Around 30 per cent of Spain’s young adults live with their parents.

Sellings of prime estate to individual investors can also mean gone chances for the local tourism industry as the example of Galle, one of the most popular tourist destinations in Sri Lanka, shows.

“We are having a big trouble as foreigners have purchased accommodations in Galle city, posing a severe setback to the local tourist business,” Mayor Kelum Senaratne said.

“At least 40 homes have been purchased straight by foreigners in the Dutch Fort in Galle, and they are making renovations according to their own will despite the fort being declared a World Heritage site by UNESCO,” the mayor said.

Social scientists have expressed anxieties that this new migration of wealthy foreign homeowners into the developing world could end up causing more community problems, such as competition for water resources and rising crime, than the economic opportunities are significance.

“Governments think about [property] development in terms of investment, job creation, incoming dollars but not in terms of the social impact on the local population,” warned Allen Cordero, professor at the Latin American Faculty of Social Sciences in Costa Rica.

luxury · Pattaya · property · social · Thailand · Worldwide

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