Condominium development in Pattaya has picked up this year, but demand is still being watched closely. PATIPAT JANTHONG
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.
Signs of a market slowdown became clear in 2016 when developers started to postpone new launches. Only 2,100 units were launched that year.
The total increased to 2,743 in 2017 as some unsold units came off the market, but the figure was still significantly lower than in 2011-15, when launches exceeded 10,000 units annually.
Activity has picked up this year with 3,638 units launched in just the first eight months. This reflects a return of developer confidence, though demand is still being watched carefully.
Chinese buyers have emerged as a high-potential new foreign market in Pattaya, helping to offset the sharp drop in Russian buyers in recent years.
Jomtien has the highest concentration of condos in the Pattaya area, including some big developments containing more than 1,000 units each. Developers favour Jomtien because it has many land plots available at lower prices than elsewhere in the resort city, with potential for lower-priced projects on a larger scale.
Although the average take-up rate in the Pattaya condominium market is 81% and sales have been improving lately, there are still 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. 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.
Jomtien has both the highest take-up rate in the area and the most unsold units by virtue of the sheer numbers launched over the past decade or so, despite attractive prices.
Beachfront condominium projects command higher selling prices than those farther inland, given dramatically higher land prices. Most beachfront developments are high-end and luxury projects selling at more than 120,000 baht per square metre. Some have fetched 150,000 baht per sq m or more, especially in the Wong Amat area, where good plots are scarce.
The average selling price of condominiums in Wong Amat is around 90,000 baht per sq m. The average in Jomtien is around 66,650 baht per sq m, the lowest in the Pattaya market, as some units in this area can be had for less 1 million baht each.
Most developers are trying to attract buyers during the market slowdown by keeping selling prices steady or increasing them only marginally. Consequently, average selling prices in Pattaya this year will be little changed from 2017, although many projects are now completed, because the market has still not fully recovered.
Surachet Kongcheep is a veteran local property market expert. He can be reached at [email protected]