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Jomtien Absolute Auction

The recent auction of luxury villas close to Jomtien was a first for the Pattaya area. A particularly bold move by the developer, a world class auction company was brought in to auction off the 4 finished and 17 unfinished units. 13 of the units were auction off with no minimum and no reserve bid — called an ‘absolute’ auction. This is a common way of marketing luxury high end properties in Australia and other areas of the world.

The auction took place on December 19 at the Royal Cliff Hotel. Although there was a large crowd of pre-approved bidders, at times the bidding was less than robust. The auctioneer even commented ‘I know some of you are only here to watch and that you’re not really interesting in buying!’. Not really a fair comment — since there was no indication of expected sales price, of course everyone showing up is a potential buyer! Many couldn’t even guess the market price!

I recorded the sales prices of each of the units that sold for no minimum bid. The units went for about what I thought they would. The lowest price auctioned unit was a 144 square meter (total area) 2 bedroom 1 bath unit on 87 square wah which went for 5.8 million baht. The most expensive was the large 418 square meter 4 bedroom 6 bath + maid quarters unit on 240 square wah of land which went for 12.1 million baht.

The land around the area of these villas (about 3 blocks from Jomtien beach) would sell for at least 6 million a rai. Once the land is subdivided into parcels with road and electric it would be worth at least 8 million a rai. So on the above two (example) units, the costs excluding the land value are as follows: * lowest cost unit: 5.8 m baht. land value = 1.74 m. house = 4.06 m cost per m2 = 28k * highest cost unit: 12.1 m baht land value = 4.8 m house = 7.3 m cost per m2 = 17k

The budget for maintenance fees of 27 baht per sq wah of land per month will leave the developer with a maintenance budget of almost 92 k baht per month or over 1m baht per year. This will indeed be a profit center for the development, as the cost of security guards is under 10k per month, and there are no common areas. In any event, it is a pricey development and the costs are not much out of line with other like developments.

The large units sold for the cheapest cost per square meter of house — around 17k per sq meter finished (not including land cost). Luxury developments here in Pattaya still sell for multiples less than in Phuket. The developer was obviously happy with the prices realized since there were some remaining units (the ones which were conditional sales) which didn’t sell. These were marketed off at around the price set at auction or a little bit less.

Maybe we’ll see more of these kind of sales in the future.

previous article about previewing the auction

mpeg auction clip

4 Comments

  1. Hi Dozer was there any suspicion that these auctions were rigged? Its very common practice in travelling car auctions?

  2. By rigged if you mean were there shills — it didn’t seem like it, but you never know. The bidding was much slower than a regular auction, the people would hesitate before a bid, you could see all of the individual bidders and who eventually won.

  3. Rumour has it that the chanot for the whole development hasnt been given the ok to be sub-divided into the indivdual plots yet…….so purchasers could be in for a nasty suprise come this August (completion time)….Terms were 30% by end Jan and then 10% a month with last payment end of August. Whole thing sounds a bit fishy IMO.

  4. Yes, good point … also I also posted on thaivisa. thaivisa forum entry on ultimate auction. You can read more about it there. Message to readers of coolthaihouse. Keep your money in your pocket (outside of a small deposit to hold a piece of property) until you go to the land office to do the transfer. I’m not sure if anything fishy is going on in this case… but as far as rules for living in Thailand …. you don’t get any extra points for being overly trusting….. or a fool and his money are soon parted….. in any event if anything is out of whack it will be a huge story at the end of August so stay tuned.

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