Pattaya Condo Market on the Rebound
Thailand property experts noted earlier this year that the Pattaya condo market was about ready for a turnaround. Now the recovery is taking place at a steady pace with developers and property buyers taking a guarded look at the market.
“The pace of condominium development has slowed dramatically in Pattaya over the past three years as developers wait for the supply built during more exuberant times to be absorbed,” property analyst Surachet Kongcheep told the Bangkok Post. “Signs of a market slowdown became clear in 2016 when developers started to postpone new launches. Only 2,100 units were launched that year.”
With 2,743 units in Pattaya launched in 2017, the direction of new condo development has increased with 3,638 units during the first eight months of 2018. Although much less than the 10,000 units launched each year between 2011 and 2015, it is an indication that developers are started to become more confident in Pattaya.
Many developers chose to build condominiums in Jomtien due to the fact that land is cheaper in this part of the city. This fact allows developers to offer units at a lower price to both domestic and international property buyers. In Pattaya Jomtiem has the highest take up rate, however it consists of the most unsold units.
Sales have been improving and the current take-up rate is averaging 81 percent in the Pattaya condo market, however there are at least 14,000 unsold units available.
“Some market observers believe the real figure is higher, as some buyers have abandoned reserved units and are negotiating with developers to resell or return them,” Surachet noted. “A lot of these units were speculative purchases made for investment during the boom years; when the market started to falter, many buyers started looking for ways to avoid losses.”
Currently there are proposed Eastern Economic Corridor (EEC) regulations that are being discussed that would allow 100 percent foreign property ownership in three Eastern Seaboard providences. Should the Thai government approve this the Pattaya condo market could be in for a big revival.
“There are many foreign buyers waiting to buy condo units in Pattaya City, Wongamat, Khao Pratumnak and Naklua, but they have been unable to do so because the foreign quota is full at all projects,” Phattarachai Taweewong, senior manager at property consultant Colliers International explained to local media.
Some Pattaya developers have reacted to lagging Thai demand for Pattaya condos by leasing to foreigners the remaining units. Although this type of arrangement has a lower return on investment and many foreigners are disinterested in this type of leasehold agreements. The new foreign property ownership regulations in the EEC have not been decided at this time.
“It is still unclear whether the 100 percent foreign ownership will be applied to all areas in the three provinces or in specific locations, as the ECC Office is in the process of drafting a new city plan that will be completed within 12 months. As soon as that regulation is clear, investors will start development,” Phattarachai concluded.