Ms. Potjaman Vorakitpokathorn, Director – Project Marketing, Residential Department, Knight Frank Thailand, said the outlook of Pattaya’s condominium market seems unpredictable. Developers have slowed down in launching new condominium projects during the first half of 2016; only 182 units were launched, making up a total supply of 60,696 units, as of 1H 2016. The take-up rate has increased to 66% during the first six month of 2016, from just 62% in 2015. This was due to the slow growth in the number of new supply during the first half of 2016; in this period, there were only 2,876 condominium units being bought. The number of units sold decreased in 2015 and 1H 2016. The average unit sold each year was in the range of 6,000 to 6,500 units. In 2015, the new units being sold dropped to 5,733 units. Developers have tried to clear the remaining inventory by offering a guarantee rental return of 5 to 7% during the first three years when the buildings have been completed. In terms of selling price, the price of sea view condominiums in Pattaya increased 2% in 1H 2016, from 117,466 baht per sqm in 2015 to 119,795 baht per sqm in 1H 2016. The partly sea view and non-sea view condominium prices remained stable at 67,900 baht and 66,925 baht per sqm, respectively.
Supply Trend
According to Knight Frank Research, the launch of the new supply of condominiums in Pattaya has slowed, with only 182 units in 1H 2016. During the first half of 2016, the cumulative supply of Pattaya condominiums was recorded at 60,696 units. All new projects in 1H 2016 were in the Pratumnak area. There were four projects launched in 1H 2016: Turtle Creek Pattaya, New Nordic C View Boutique, New Nordic Club 4 and Paradise Ocean View Residence. In terms of condominium locations in Pattaya, the majority of new supply was in the Jomtien area, with approximately of 37% of the total, followed by South Pattaya and Wong Amart with around 16% and 14%, respectively.
Figure 1
Figure 2
Demand Trend
The demographic of Pattaya condominium buyers has changed since 2010. Previously, Pattaya was a favoured residential area for people from Russia, Germany, the Middle East, Australia, and India who also resided in Bangkok. It also drew tourists who wanted to purchase a retirement or holiday home in the coastal city. Russians were the main buyers in the Pattaya market but the numbers of such buyers have been declining steadily since 2014. The Ruble currency crisis directly affected Russian visitors and their purchasing power, which decreased, compared to the previous year. Miss Risinee Sarikaputra, Director, Research and Consultancy, Knight Frank Thailand added that the emerging buyers of Pattaya condominiums are Chinese; though Chinese buyers have replaced Russian buyers, the Pattaya condominium market has not yet recovered in 2015. The number of Chinese tourists visiting Pattaya has increased by 15.45%, whilst the number of Russian tourists visiting Pattaya dropped by 50%. Chinese investors started buying condominiums in Pattaya for investment. Most condominiums that they bought were fully furnished and the unit price was not over 5 million baht. As of 1H 2016, there were 40,361 units sold out of 60,696 units, representing a sold rate of 66%. The sold rate increased from 2015 from 62% to 66% during the first half of 2016; this was due to the slowdown in the newly launched units during the first half of 2016.
Figure 3
Pricing Trend
In terms of selling prices of condominiums in Pattaya, the view from the condominium unit is the main factor affecting the price. Condominium units with sea views had the highest average selling prices at 119,795 baht per sqm as of 1H 2016, an increase of 2% from 117,446 baht per sqm in 2015. The selling price of partly sea view and non-sea view units remained fairly stable or slightly increased at 67,900 baht and 66,925 baht per sqm, respectively.
Figure 4
