Real estate firm Plus Property has revealed that condominiums in the Thailand resorts of Pattaya, Phuket, Hua Hin and Cha-am and Khao Yai have become a new, attractive, low-risk asset class for property buyers and investors.
Results revealed today (Thursday) from its 2016 real estate survey underlined that resort condominiums are attractive investments due to two-fold benefits, which are resale profits and yields from rentals.
The findings are supported by the rising number of tourist arrivals. In Pattaya the supply of condominium units is now 38,000 while demand stands at 82 percent In Hua Hin and Cha-am the supply is 7,400 units with demand at 73 percent. Phuket supply is at 13,000 units with demand at 68 percent.
These figures, according to the firm, confirm the vibrant real estate outlook in Thailand’s resort towns.
Poomipak Julmanichoti, Managing Director of Plus Property, said the government’s stimulus packages has precipitated the decisions for residential purchases. As well, the decreasing returns on other types of investments and the upcoming cut in deposit protection by the Deposit Protection Agency to THB 1 million per bank account has prompted long-term investors to look into property investments.
“Therefore in 2016, condominiums will be a very appealing investment asset class because investors can take profits from higher resale prices in the future, as well as yields from rentals which are relatively high at present.”
Plus Property said that while the majority of condominiums in Thailand are in Bangkok and major provinces, condominiums in resort towns have gained popularity due to comparatively lower prices compared to those in Bangkok. Average returns from rentals are at 10 percent per year, provided that the condominium units are leased throughout the year which is possible thanks to the rise in tourist arrivals to Thailand that tend to increase every year.
The statistics of tourist arrivals in Thailand indicated there were 29.88 million visitors during 2015, an increase of 20.44 percent compared with 24.8 million in 2014.
According to the survey from Plus Property the popular resort towns for tourists are Phuket, Pattaya, Hua Hin and Cha-am and Khao Yai. Average monthly rental fees for a 30 sqm one-bedroom unit are as follows:
In Hua Hin and Cha-am the rental fees range from THB 680 to THB 800 per sqm – or THB 20,400-= to THB 24,000 per month, contributing to gross rental yield of between 10 percent and 12 percent per year;
In Pattaya the range is between THB 650 and THB 830 per sqm, or THB 19,500 to THB 24,900 per month;
In Phuket the rental rates are similar to those in Pattaya, which are from THB 680 to THB 800 per sqm or THB 18,900 to THB 24,000 per month; and in Khao Yai the rates are in the range of THB 460 to THB 500 per sqm, or THB 13,800 to THB 15,000 per month.
The survey also found that during 2015, resort towns like Pattaya had 83 condominium projects totaling 38,015 units that completed construction and were available for sale, of which 82 percent or 31,123 units were sold at an average price of THB 72,581 per sqm, leaving only 6,892 available units.
In Hua Hin and Cha-am there were 28 finished projects offering 7,476 units of which 73 percent or 5,452 units were sold at the average price of THB 83,448 per sqm. Now only 2,024 units are available.
In Phuket there were 68 completed projects which offered 13,755 units in total, of which 68 percent or 9,306 were sold at an average price of THB 85,094 per sqm, with 4,449 units left.
“Condominiums will be in the spotlight in 2016 because of the increasing demand for residences in many segments,” said Poomipak.
“For example travelers and the foreign skilled workers in Thailand have demands for accommodation in the short- and long-term.
“While the condominiums in Bangkok’s central business districts, often purchased for investment purposes, are decreasing in number due to the limited availability of land for project development, the condominiums in Thailand’s leading resort towns would make the attractive long-term asset class for investors and consumers.
“Most condominium projects in these destinations have completed construction, so buyers can visit the projects and inspect the units without risking the chance of delayed construction, and can either move in or rent the units to immediately benefit from returns.”