Leading property developer Raimon Land has released the 11th edition of its annual research publication Condominium Focus Thailand: Update of Inner-City Bangkok and Pattaya. Available now as a free download at www.raimonland.com, the new report highlights growing acceptance of condominiums in the residential market, brisk pace of new project launches along major public transit lines in Bangkok, and an ongoing shift away from beachfront areas in Pattaya.
Despite the flood-inflicted difficulties of late 2011, Raimon Land’s research shows that homebuyers remain strongly confident in the future of the Thai real estate market. Lingering concerns over floodwater management and robust expansion of public transit systems continue to drive interest in condominium projects in Bangkok along the mass transit lines, while Pattaya’s attractive returns generate an extra push for both property supply and demand.
“The trend looks set to continue in the foreseeable future” – Simon Dervillé.
“With mass transit lines extending further away from the heart of Bangkok, a large number of new developments are popping up in new hotspots along their paths,” said Simon Dervillé, Raimon Land’s Deputy Vice President for Business Development. “Over the past 12 months, we have seen the completion of 6,135 new condominium units in the new development areas compared to just 3,730 in prime city center. This trend looks set to continue in the foreseeable future, with 30,100 out of 44,168 units due to complete in the new areas.”
He continued: “Developers are now more focused on mid-tier projects in the city vicinity or away from the beach over high-end developments in prime areas because the lands are more affordable. This has led to a massive number of units in midtown zones and we start to see unsold inventories building up with additional inventory from speculative purchasers.”
Meanwhile, Bangkok continues to offer great value on the international stage, with average price per square meter rising by just 2.27% to 116,681 baht – putting the city roughly two to three times cheaper than Beijing and Shanghai, and six to eight times cheaper than Singapore and Hong Kong.
Attractive returns drive Pattaya Market
Due to project delays and sometime halts in construction, the Pattaya condominium market saw a sharp drop in unit completions from 7,400 in H2/2010 and H1/2011 to just 731 in the last 12 months. Another 28,000 units are expected to complete in the next three years, and for now the take-up rate in existing supply is still great but this will have to be monitored in the next couple of years, says the report. The lower segment (under THB 3 million) is doing well as demand for second homes grows along with the city’s ever-expanding range of attractions.
While beachfront locations still remain as exclusive and desirable for property buyers as always, development activity has shifted away towards non-beachfront zones. Of the 14,309 units launched in H2/2011 and H1/2012 across 31 projects, only 2,688 are located on beachfront sites, which still command much higher prices than non-beachfront developments as expected.
Raimon Land’s Unixx project in south Pattaya.
The take-up rate among newly launched projects is just at 51.7% for non beachfront properties, and 70.3% for beachfront properties.
“Because entry prices in Pattaya are still relatively cheap, Pattaya offers higher rental yields than in Bangkok,” Mr. Dervillé added. “The market here is shaped by the leisure industry, which leads to shorter rental contracts in general and more fluid prices.”
Raimon Land’s Condominium Focus Thailand report is a research publication aimed at providing homebuyers, investors and industry observers with an accurate insight into supply, completions, off-plan sales and transfers.
The report covers condominium projects launched since 2003 in Bangkok and Pattaya. Raimon Land collects this data by surveying the projects listed in the publication, on a monthly basis through a variety of sources comprised of site visits, interviews, press articles, investor research on listed companies and other research agency reports.
The data catchment area of inner-city Bangkok includes Sukhumvit, Silom/Sathorn, Central Lumpini, and Riverside locations, as well as along mass transit lines. In Pattaya, the report covers the areas from Naklua in the north of Pattaya down to Na Jomtien in the south.