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Wednesday, 07 November 2012 12:29

Pattaya City Condominium Market Report 2012 Featured

UNIXX SOUTH PATTAYA, SEA VIEW

UNIXX SOUTH PATTAYA, SEA VIEW

HIGHLIGHTS

A similar number of newly launched units were introduced in the first half of this year, as compared with the second half of 2011

Just 250 units were completed and transferred during H1 2012. this is primarily due to a lower introduction of project launches during the worst of the economic crisis of 2008-2010.

A large number of Pattaya and Bangkok based developers continue to make a strong vote of confidence for the Pattaya market.

The average take-up rate for the first six months of 2012 increased by more than 4.6% on 2011.

The new Jomtien Second road will remain the most densely developed area throughout the municipality during the first half of 2012, with many more projects scheduled for the second half. Newly launched units in the first half of 2012 were similar to the total launched during the second half of last year. This was due mainly to a large number of smaller projects being introduced with a selling price of less than 3 million baht, particularly within the Jomtien area.

MARKET INDICATORS

Supply

At the end of H1 2012, the total supply of condominium units amounts to approximately 46,350. During H1 2012 a rather low figure of just 250 units were completed and transferred. This is primarily due to the massive decline in condo launches following the wake of the worldwide economic crisis, when many developers decided to put their projects on hold off until there was an upturn in the market. From one extreme to the other, we expect to see a whopping 5,900 units completed during the second half of the year according to developers reports.

Pattaya proved to be the most popular zone for the condominium market in the years prior to 2000; however from 2001 onwards the Jomtien area has displayed continual growth due to the abundance of remaining beachfront and secondary development sites, Pattaya on the contrary now faces a scarcity of development sites and those that are available are becoming prohibitively expensive. During 2005 the Pattaya City administration initiated improvements to be made along Thappraya road and introduced a new Jomtien Second Road extension. The road was designed to alleviate traffic congestion from beach road and now has many sois linking both roads together.

With the introduction of this new road which is still an ongoing project, we’ve witnessed the entire area opening up and become available for large scale resort style mass development, mostly appealing to the lower end of the market.

The condominium supply expected to be completed between 2012 and 2015 in the Jomtien area is expected to surpass 14,000 mid to low end units. The largest condominium supply is in Jomtien, representing about 41% of the total followed by Pattaya with approximately 31%.

Condominium projects in Pattaya are predominantly low rise in nature and the average number of units per project is approximately 140, which is similar to projects found in the Wongamat and Pratumnak areas. the figure for Jomtien was around 360 units as until recently many of the projects have been high rise. as land costs are generally less along the Jomtien Second Road it has enabled developers to launch low cost, low rise resort style projects often numbering over 1,000 units surrounding a large lagoon swimming pool and often based on a theme.

The pattern of overall real estate development is different for Jomtien and Pattaya, as Pattaya contains the vast majority of both hotels and commercial developments, which leaves very limited land supplies for large scale condominiums.

on the other hand Jomtien was largely spared this kind of development during the 80’s and 90’s and as a result sizable tracts of land still remain available for larger scale projects.

According to claims by developers almost 5,900 units are scheduled to be completed and transferred during the second half of 2012, which represents an increase of more that 12% on total supply. Throughout the years 2013-2015 Jomtien will continue to be the main player in the Pattaya condominium market, particularly in the middle to low end sectors.

New launches for H1 2012 were very similar to the second half of last year, with Jomtien leading the way followed by Pattaya city. Three new projects were launched in Jomtien comprising more than 1,000 units in each project.

The majority of condominium projects launched in the last 12 months have focused on mid to low end buyers, though there are some exceptions concentrating on the upper end of the market, also reporting strong sales figures. Mainstream buyers both foreign and Thai are mostly looking for an affordable holiday home, not far from the beach, with good facilities and trusted management from a recognized developer with good track record.

The average take-up rate for Pratumnak increased by an average of approximately 12% from the second half of 2011, highest of all locations in Pattaya city market. The take-up rate of Wongamat, Jomtien & Na Jomtien increased by an average of approximately 8.8% from the second half of 2011 and the remaining location, Pattaya recorded a slight decrease.

During the first half of 2012 three new large scale projects were launched in the Jomtien area, comprising more than 1,000 units per project, which were warmly welcomed by investors and the take-up rate rose in Jomtien. on the contrary Pattaya area witnessed a slight decrease in H2 2011 with no new launches during this period, however over 2,000 units were introduced during H1 2012, yet the majority of buyers preferred locations away from the city, which affected the average take-up rate.

The average selling price in Wongamat remains the highest in all of Pattaya City. there were only two new projects launched in this area during the first half of 2012, so the area appears to be retaining its exclusivity. The average price in Pattaya, Jomtien and Na Jomtien in contrast decreased slightly, in part due to the increased amount of newly launched projects aimed at the mid to lower end of the market.

 

BEACH FRONTAGE AND HEIGHT of CONDOMINIUMS AFFECT ON PRICE

Beach frontage is the key driver in attracting higher prices for luxury condominiums. Prices can rise by over 100% when a project is located by the beach, especially in Wongamat and Na Jomtien areas.The average selling price of a high rise project is higher than that of a low rise, due to the increased construction costs and the privilege of having a sea view from all units also attracts a premium. However, certain low rise projects with an emphasis on facilities such as a large themed lagoon swimming pool or amenities you’d expect to find in a resort will often command higher pricing.

 

OUTLOOK

The condominium market in Pattaya has remained robust over the last 6 months following the solid performance of 2011. Jomtien is the most popular area for many foreign and thai buyers looking to buy a second home in close proximity to the beach at an affordable price. Most of the projects launched during the first six months of 2012 and in the coming months are focusing on the mid to low end of the market.

Jomtien in particular runs the risk of oversupply to investors looking for strong yields and high capital appreciation. as a lifestyle choice and as an end user Jomtien can offer some very attractive properties at affordable prices, particularly long Jomtien Second Road.

Foreigners and Thais are almost equal in numbers as buyers, which assists developers in selling out projects 100% based on quotas. However, with the on-going EU debt crisis issues it will have a negative.



Read 856 times Last modified on Thursday, 08 November 2012 00:55
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