Unit transfers and the number of unsold units are the main concerns for the Pattaya property market for the remainder of 2015.
According to Colliers International Thailand’s latest research report covering the first half of the year, the main concern for all property developers in the Gulf of Thailand city are the 10,000 units that are expected to be complied before the end of the year.
The real estate firm noted its concerns that Russians buyers and Thai speculators may not transfer their units when the projects are completed.
It also reported that some developers may postpone or delay their completion dates.
The number of new condominium units launched during the first six months of2015 was significantly lower than during the second half of 2014.Only 5,280 units were launched in 1H 2015, 39 percent lower than in 2H 2014.
Colliers said that Thailand’s economic situation and some other factors directly affected developers’ confidence, and some developers cancelled their projects when they could not achieve their sales targets.
Unsold and second-hand units are the main concern for all developers who are planning to launch new projects in the Pattaya condominium market. Demand in the Pattaya city condominium market has still not recovered.
The weakening Russian ruble is the main issue directly affecting Russian buyers, while another major problem according to Colliers is too much supply in the market, and that is affecting the confidence of buyers.
In terms of prices, condominium prices in some locations are higher than in 2014. The average condominium price in the Pratumnak area significantly increased from 2014 because some foreign developers increased their prices in first half of 2015, Colliers said.
The average price in the Jomtien area is the still lowest in the Pattaya condominium market, because many low-end condominium projects were launched in the past few years
Some infrastructure projects are becoming new factors for the Pattaya property market. The government announced some development projects in Chonburi. A new ferry pier for the Pattaya – Pranburi route, a Pattaya – Map Ta Phut motorway and a high-speed train line from Bangkok to Rayong are three projects that will probably be started next year. All development projects from the government will increase the interest in Pattaya in the future.
Approximately 2,130 units were completed and registered in the first half of 2015, bringing the total in Pattaya to around 60,885 units as of the end of June 2015. More than 10,000 units are still under construction and scheduled to be completed before the end of this year.
Only 5,280 units were launched in first six month of 2015, a significant decrease from 2H 2014, due to many negative factors outside and inside Thailand. The decreasing number of foreign tourists in Pattaya, especially Russians, who are the main buyers in the condominium market, is a main reason for the condominium market slowdown said Colliers.
The number of Chinese tourists has continuously increased in the past one to two years, but the Chinese are still not the main buyers of Pattaya condominium market.
Nearly 4,930 units or 93 percent of the new condominium units that were launched in 1H 2015 are in the Na Jomtien area. This was due to three condominium projects with more than 1,300 units in this area.
Some new Chinese developers are scheduled to launch new condominium projects in Pattaya in 2015, especially in Jomtien and Na Jomtien.
The average take-up rate in the Pattaya condominium market as of the end of June 2015 was approximately 75 percent, noted Colliers, and this was a slight increase from 2014.
More than 68,400 condominium units were launched between 2011 and the first half of 2015 and most were sold out. But more than 18,000 unsold units in Pattaya are still waiting to be absorbed, probably as many as 22,000 units if all units of speculators and investors are included, Colliers said.
In its forecast Colliers said that Chinese developers are another new group in the Pattaya condominium market, following the flood of Chinese tourists that came to Pattaya City in the past few years. Still, the Chinese are not the main buyers in the market.
The transferring issue is a major concern for Thais, foreign developers, and even well-known or no name developers. This is because many developers expect to complete their projects, with around 10,000 units, in the second half of 2015.
Some infrastructure development projects in Pattaya will be key factor for the city, while listed developers are postponing the launches of their new projects in Pattaya and shifting to areas around industrial estates, and directly targeting the workers there.
To read the full Colliers International Thailand research report click here.
