Report on the state of Pattaya’s condominium market has revealed that the glut of supply in the seaside resort is worrying some developers.
Some 10,000 condo units are scheduled to complete in the second half of 2015, but the Thai economy, coupled with the drop off in foreign investment, is at a point where developers are concerned that unit transfers may be cancelled by buyers at the point of completion. As such, some developers are considering delaying completion dates until the market looks to be more stable.
Due to the major decline of the Russian rouble, the number of Russian arrivals and buyers in Pattaya also declined significantly, leaving a vacuum in Pattaya’s market. While Chinese visitor numbers are increasing, they aren’t yet showing the same inclination to buy property as their Russian predecessors did. Additionally, the precarious state of the Thai economy – the baht is currently at its lowest level in six years – means that Thai speculators are also likely to cancel their purchases before the units are transferred.
The future for Pattaya’s condo market is still uncertain and will be risky as long as the Thai economy weakens and dependence on Russian investors prevails. Meanwhile, smart developers are shifting their attention to Thai, Chinese, Indian and other Asian buyers. Market analysts are hoping that things could change in the future, as infrastructure developments in the Eastern Seaboard area should give the market an uplift when they are realised: a new ferry pier is destined for the Pattaya to Pranburi route; a motorway will be laid between the city and Map Ta Phut; and a high speed train line from Bangkok to Rayong is also hoped to come to fruition.
Pattaya’s condo market has been risky for a short while now; at the end of the first semester, there were 60,885 condo units in the city, of which up to around 22,000 are left unsold. Developers only launched 5,280 units in H1 of this year, a decline of 39 percent on the figures recorded in H2 2014. Despite the concern, however, some foreign developers in the area were able to increased their selling prices by around 5-10 percent in the last few months, according to Colliers.
Source: PROPERTY REPORT