Is the condo market in Pattaya and Jomtien Beach finally cooling off?

The buzz around Pattaya and Jomtien Beach is that sales are down!

A friend of mine from one of the most prominent reality companies here in town has confirmed rumours as to what was already believed, that sales are down this year. Down to what degree? Last month alone saw a decrease of about 75% compared to November of last year. Of course you'll still get the majority telling you sales are rocking and business is great.

What does this mean for the potential buyer?
  Overall i would have to say that it should mean nothing. If you want to have a place here in Pattaya or the neighboring Jomtien Beach and even down to Bang Sarae, these are still nice places to live regardless of what the property market is doing at the moment. Property is a long term investment in its own right, not a get rich quick overnight goldmine.

Is buying a condo right now a good idea as an investment?
 If you are looking to purchase to make a return on monthly rentals one thing you should consider is if you have enough friends that either holiday here regularly, or if you know enough locals to rent for long term. Agencies have a far bigger database of available properties than prospective renters.

Is buying and looking towards the equity a good odea over the mid to long term?
 I would have to say definitely. In the 10 years i have been here prices on everything have contimued to rise. This is in the wake of tsunamis, political instability, airport closures, foreign exchange rates declining by an average of 25%, property and land prices have continues to rise.

All in all Thailand is still a great holiday destination and place to live. Pattaya and Jomtien Beach are particularly convienent and ex-pat friendly beach communities. The newer condos offer better construction, more luxury and hold their value. In particular Nova Group and Tudor Group are some of the best deals going atthe moment.

Will new condo and housing projects in Thailand be completed on time?

Thailands property developers are facing a shortage of workers.

Reports from property developers are there just not enough workers available to fill the demand for upcoming projects in the new year. The new minimum wage increases still will not solve the problem.

Thailand has a 0.6% unemployment rate according to "The Nation", and the construction, infrastructure, and manufacturing sectors are looking at a shortage of approximately 200,000 workers.

While reasons for this may be debateable and the above unemployment rate skeptable, the lack of workers seems prominent.

One attempt to solve the problem has come from the Housing Business Association asking Labour Ministry to ease restrictions on foreign workers. There are an estimated 2 million foreign workers in Thailand at the present time.

While it can't be estimated just how many delays in new projects breaking ground it would seem wiser for property buyers to be looking at projects nearing completion as opposed to buying empty shells on pieces of land that have not yet broken ground.

Here in Pattaya, where there are still a huge number of new projects lined up for 2013, even if builders can deliver units on time there may be a question of the local Thai government having enough workers to complete the necessary infrastructure...which all in the Pattaya Jomtien Beach area know is lacking to say the least.

Condo market continues to soar!

The Chonburi area is expected to see 13,000 new units this year alone with another 8,000 for the Hua Hin Cha-Am region. The greater Bangkok area is expection another 60,000 units up almost 43%. This according to a survey conducted by the REIC.

There have been some declines reported in low rise residential developments, Bangkok saw a decline of 29% in comparison to this time last year. The business section in "The Nation" has allot of buzz lately regarding housing and condo prices and the amount of current and expected development. I found these numbers and this article interesting and have posted it below.

THE NATION October 2, 2012 1:00 am

 

Huai Khwang, Chatuchak, Din Daeng, Sukhumvit from Phra Khanong to Samut Prakan, Chon Buri province, Hua Hin and Cha-am show signs of a condominium glut this year, according to the Real Estate Information Centre.

A survey by the REIC found that more than 13,000 condo units would enter the market in Chon Buri and nearly 8,000 units in Hua Hin and Cha-am this year. They will account for about a half of all sales in both locations.

In Greater Bangkok, the centre estimates new condo projects will supply 60,000 units this year, up 42.85 per cent from last year, and low-rise projects - detached houses, townhouses and duplexes - will supply 35,000 units, down 14.28 per cent. This will drive volume growth for the residential market to 15.85 per cent this year.

The full-year estimate for Greater Bangkok reflects the introduction in the first nine months of condo projects with 46,000 units, up 42 per cent from only 32,500 units in the same period of last year. Of those 46,000, 39 per cent or 18,000 units have usable space of 26 square metres or less, 36.9 per cent or 17,000 units have more then 30sqm and 23.9 per cent or 11,000 units have from 26-30sqm.

The first nine months recorded 24,000 units of new low-rise residential projects. This represented a steep decline of 29 per cent from 34,000 units in the same period of last year.

Of the condo projects launched in the first nine months in Greater Bangkok, 71 per cent were developed by 34 listed property firms and the remaining 29 per cent by 100 non-listed firms.

Of the low-rise residential projects launched in the first nine months in Greater Bangkok, 69 per cent were developed by listed property firms and 31 per cent by non-listed companies.

Samma Kitsin, director-general of the REIC, said yesterday that demand for condos was rising after the flood hit Bangkok and its suburbs late last year.
Of the condo projects launched in the first nine months in Greater Bangkok, 71 per cent were developed by 34 listed property firms and the remaining 29 per cent by 100 non-listed firms.

Of the low-rise residential projects launched in the first nine months in Greater Bangkok, 69 per cent were developed by listed property firms and 31 per cent by non-listed companies.

Samma Kitsin, director-general of the REIC, said yesterday that demand for condos was rising after the flood hit Bangkok and its suburbs late last year.

Prices in Greater Bangkok for condos rose 6.4 per cent on average this year, while detached-house prices increased 3.3 per cent and townhouse prices by 4.7 per cent. Developers had to cover their rising construction costs, he said.

The Bank of Thailand is also closely monitoring the condo market in Greater Bangkok as prices have spiked, central bank officials said last week.

The condo price index last month rose 8.1 per cent year on year, while mortgages increased 9.3 per cent. The detached-house price index climbed 2.4 per cent and that for townhouses 1.8 per cent year on year.

The supply of high-rise residential units in August expanded 4.8 per cent and that for low-rises by 13.9 per cent from July in Greater Bangkok.

Caution on Condos in Pattaya

There has been much speculation in recent years regarding the condo boom around the Pattaya area...is it getting over built. I saw this article in the Bangkok Post todaystating smaller developers may run short on funds for completion of projects due to rising construction costs and Pattaya possible getting over built. Future prospective buyers are always advised to consult a lawyer and conduct their own Due Diligence. Best advice is to stick to the more established developers and consult with local real estate professionals. Here is the article:

Pattaya condos 'may not be built'

Home buyers must be extra cautious in purchasing condos in Pattaya as smaller developers are expected to face difficulties in actually starting construction of their projects, according to a major developer, SET-listed Raimon Land Plc (RML).

Reuters Photo

According to the latest Raimon Lands annual research publication Condominium Focus Thailand: Update for Inner-City Bangkok and Pattaya, 28,892 condo units are expected to be completed in Pattaya over the next three years.
However data gathered over the last one year (from the second half of 2011 to the first half of 2012) shows that 3,258 units have already been officially suspended.
Simon Derville, Raimon Land’s deputy vice president for business development said the majority of the units suspended tend to be low rise, 8-storeys high and without beach front or sea view, which makes it difficult to sell.
He forcasts that the number of development projects that would not be able to secure financing due to low pre-sales could reach up to 10,000 units over the next three years.
"If you are buying from someone you never heard of, you should definitely double check, ask a lot of questions and do our own due diligence," he said adding that buyers should find out if the developer actually owns the land if they have secure financing for construction and what their previous construction projects include.

Reaching Pattaya and beyond

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It is a good question. I hear - "We diversify our advertising enough already!" Developers and Real Estate Agencies already pay to advertise in local magazines, bill boards, news papers, television and radio, and high cost booths in shopping malls. 

Are you seeing the common denominator here? This is all local advertising! What about those that are not in the immediate or approximate area?? How do you reach them?

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The truth is if i'm looking for a property i am not looking to Facebook...maybe to get an idea. Most will Google some kind of search. We look to reach those outside Thailand as well, weather they are looking for a holiday rental, short term rental, long term rental, or to buy, we can reach them and get them right to what they are looking for. 

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Condo Market still hot in Thailand!!

With all the new condos going up all over Thailand it would seem like it is a bubble waiting to burst. I just came across this article printed today that clearly suggests otherwise. Low price condos less than 5 Million Baht appear to be the big draw. Read more...

Future of Pattaya's booming condo market

Our last blog post had some very positive quotes from "The Nation" regarding Thailands Condo Craze! But ifyou're wondering just how that will affect the Pattaya - Jomtien area this article was printed just days earlier in the same paper targeting Pattaya and Jomtien Specifically...Looks like this bubble is not going to pop anytime soon, making The Eastern Seaboard and Thailand as a whole still a stable investment. Read more

Price of concrete continues to rise as demand from developers remains strong!

Saw this artice in "The Nation" If anyone is thinking Pattaya, The Eastern Seaboard, or Thailand as a whole is bubbling out you may want to have a look at this. It appears demand remains strong and pre-fab products to expedite development and cut labor costs is on the rise...Read more

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