Earlier this year, Thailand property experts noted how the Pattaya condo market seemed primed for a turnaround. It looks like the recovery is now taking place. The revival is happening at a steady pace as both developers and property buyers continue to carefully watch 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.”
New launches picked up last year with 2,743 units released. The trend has continued into this year with 3,638 condo units launched during the first eight months of 2018. While this is significantly less than the 10,000 units launched annually between 2011 and 2015, it is a sign developers are more confident in Pattaya.
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Pattaya condo market revolves around Jomtien
Jomtien is home to the most condominium buildings in the Pattaya area. Many developers opt to build in this part of the city due to cheaper land. That allowed them to offer lower priced units that appeal to both domestic and international property buyers. Jomtien has the highest take up rate in Pattaya, but also contains the most unsold units.
Currently, the average take-up rate in the Pattaya condo market is 81 percent. Sales have been improving in the past few months, but there are still at least 14,000 unsold units available, according to Surachet.
“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.”
EEC could soon benefit Pattaya condo market
Should the Thai government approve proposed Eastern Economic Corridor (EEC) regulations that will allow 100 percent foreign property ownership in three Eastern Seaboard provinces, the Pattaya condo market would be in for a windfall.
“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.
At the moment, some developers in Pattaya have responded to slow Thai demand for Pattaya condos by leasing out remaining units to foreigners. However, these have a lower return on investment and many overseas buyers are turned off by leasehold agreements. It remains to be seen if or when the new foreign property ownership regulations in the EEC will take effect.
“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.