The Pattaya condominium market has been quite popular in the past seven years, especially between 2011 and 2013 when new unit launches were the highest in the history of the beach resort city in Chon Buri.
The market has been helped by the rapid rise in foreign tourist arrivals, especially Russians who consider Pattaya their favourite destination. Russians have been the biggest foreign buyer group in the market and have also lifted overall hotel occupancy rates in the area.
Another factor that fed condo demand was the great flood of 2011 that inundated the central region of the country including Bangkok for weeks. Many residents of the capital started to take a fresh look at Pattaya as a location for second homes as it is just a two-hour drive away.
Many developers in recent years have been trying to diversify their revenue streams beyond Bangkok and have been active in all of the tourist cities close to Bangkok including Pattaya. Their interest in Pattaya was strong because of its well-developed infrastructure, and an average of 15,000 new units a year were launched from 2011-13.
A total of 78,400 new condo units were launched in Pattaya from 2010-17, considerably higher than in the 10 years prior to 2011 when the cumulative total was only 46,100. Activity was so frenzied from 2011-13 that it was not surprising when a slowdown began to set in as developers waited for the market to absorb unsold units.
The slowdown was exacerbated by the weakening Thai economy, with many buyers thinking twice about big commitments such as second or holiday homes. The sharp decline in the value of the Russian rouble also led to a large reduction in Russian tourist arrivals -- their numbers started returning to normal last year -- and some buyers from that country also cancelled condo bookings they had already made.
Most of the newly launched condominium units since 2010 have been located in Jomtien and Na Jomtien, where good land plots were still available at prices lower than in other locations. That led to the development of large-scale projects, some with 1,000 units or more. Consequently, the number of unsold units rose as the market softened, with Na Jomtien recording the lowest take-up rate of the five locations surveyed.
Unsold units in Pattaya currently total around 10,000, mostly in lower-priced developments. In the past two years, developers have been focusing on clearing the inventory in completed buildings and some have postponed new project launches as a result.
While a return to the boom years of 2011-13 is very unlikely, there are signs that the Pattaya condo market could start to pick up again in the near future. Developers are counting on a number of government-backed projects to spur tourism and investment, which will have a knock-on effect on real estate. These include the Eastern Economic Corridor, expansion of U-tapao airport to serve more international flights, the extension of the Motorway to Map Ta Phut, a high-speed rail line, a monorail in Pattaya City, and cross-Gulf ferry service between Pattaya and Pranburi in Prachuap Khiri Khan.
Much will depend on the progress of these big-ticket projects, which could help create a modest revival in the Pattaya condominium market.
Surachet Kongcheep is a veteran local property market expert. He can be reached at surachet.jock@gmail.com