Thailand property developers have expanded into the condominium market in tourist destinations, especially resort beaches in Chon Buri including Pattaya, where more than Bt200 billion in projects will have been launched this year to date and land prices have doubled in five years.
According to a survey of the Government Housing Bank's Real Estate Information Centre (REIC), over 200 condo projects worth Bt170 billion have already been introduced to the market as of the middle of this year.
CB Richard Ellis (Thailand) also reported that 41,000 condo units in Pattaya will be completed and delivered to customers this year and 50,000 units in the next two years. About 40% of them are located in Jomtien, 20% in Wong Amart, 20% in central Pattaya, 13% in Kho Pra Tamnuk and 7% in Na Jomtiem.
About 60-80% are located close to the beach.
Since 2012, projects have gone down market from luxury units to units priced not over Bt2 million.
"This means the customer target has changed from foreign buyers to domestic buyers who work in the area," managing director Aliwasa Pattanathabutr said recently.
Among the new developments in Chon Buri is the 440-unit Supalai Vista Sriracha-Laem Chabang project worth Bt1 billion that was debuted by Supalai Plc early this week.
A joint venture of Thai and Israeli investors, Heights Holding Co, is bringing out the 391-unit Wongamart Tower worth Bt1.28 billion on Wong Amart beach in the second half of this year.
SC Asset Corporation Plc's latest project is the 999-unit Centric Sea Pattaya worth over Bt2 billion.
Nusasiri Plc decided to embark on a single family home project worth Bt3.9 billion in the second half of this year when it saw strong demand in this market.
Veranda Resort and Spa Co has unveiled the 360-unit Veranda Beach Pattaya condo project worth Bt3 billion.
Kingdom Property Co is following up its popular Southpoint Pattaya project with two more worth Bt10 billion next year.
Earlier, top listed property firms such as LPN Development, Sansiri and Supalai christened residential projects in Pattaya and other locations in Chon Buri.
Samma Kitsin, director-general of the REIC, said condo supply in Pattaya-Chon Buri is the largest in the country outside Bangkok.
Last year saw 96,600 residential units enter the market in Pattaya-Chon Buri, of which 56,400 were residential condos that have been 66% sold. The others are single family homes and townhouses.
"We expanded our condo project launches in Chon Buri when we saw strong demand in the market after the company succeeded in selling the first condominium, Supalai [email protected], worth Bt2.4 billion, in June," said Atip Bichanond, managing director of Supalai.
Demand for residential projects in Pattaya-Chon Buri comes from both domestic and foreign buyers who work in industrial estates in the Eastern Seaboard and in the hospitality business in this province, he said.
Naruthai Phodej, deputy director of Heights Holding Co, said the company has developed 13 condo projects worth over Bt10 billion in Pattaya-Chon Buri since 2006 aimed at both domestic and foreign buyers. Two more projects worth more than Bt5 billion are slated for the second half of 2013.
"Most of our customers buy for occupancy, but some also buy for investment because demand for residences in Pattaya and Chon Buri shows strong growth from people who move their workplace from Bangkok to the Eastern Seaboard. They are both locals and foreigners," she said.
Land prices rising
The rush to release residential projects in Pattaya-Chon Buri has pushed land prices up more than 100% from five years ago.
Chana Nantachankul, managing director of Century 21 Realty Affiliates (Thailand), a real estate broker, said prices for land located close to the beach in Chon Buri have risen an average of 20% a year over the last five years to Bt20 million per rai.
Wasan Kongchan, managing director of Modern Property Co, another sales agency, said land prices in Pattaya are going up because of both new condominium projects and the new mass transit route that will pass through the province under the government's Bt2 trillion infrastructure scheme.
Land prices in Wong Amart have multiplied from an average Bt90,000 per square wah or about Bt36 million per rai five years ago to Bt350,000 per square wah or about Bt140 million per rai this year.
"When the government's Bt2 trillion infrastructure project kicks off and is already completed, land prices will rise to Bt500,000 per square wah following the growth in demand," he said.