Many condominium units are expected to be completed and transferred in the Gulf of Thailand towns of Cha Am, Hua Hin and Pranburi during the second half of 2015, with most developers trying to attract more buyers during the eceonomic slowdown by keeping the same selling prices, or by introducing minor increases.
According to Colliers International Thailand in its latest market report on the resort market in the area, Thailand’s economic situation is still not meeting government expectations. Most Thais are not confident with their financial situation so have postponed buying any property-buying decisions for fear of long-term debt.
All property and real estate developers are more concerned with the demand situation so have most held off on launching their new projects in the second half of 2014 and the first six month of 2015.
Only 810 condominium units and one housing project with six units were launched during the first half of 2015, and the real estate firm reported that a lot of unsold units are still available on the market, especially condominium units that were launched during the past few years.
The average prices in the condominium and housing market only increased by between 3 percent and 5 percent from 2014 as all developers attempted to attract more buyers by keeping the same selling prices or increasing them only slightly.
Some condominium developers are also facing the transferring issue, so are discounting their units for all ready to transfer buyers.
New government infrastructure projects, such as the Bangkok – Hua Hin high speed train and the new ferry pier for services on the Pattaya – Pranburi route will also add interest in the long term.
According to the real estate firm, the major buyesr in the Cha Am, Hua Hin and Pranburi market are Thais, so the area not been impacted as much as other resort property markets by the decreasing number of Russians.
Large-scale condominium projects with approximately 6,000 units were launched in the Cha Am area in 2011, so the total number for that year is significantly higher than other years.
Many new condominium units were launched during the last few years, but the number of new condominium projects launched during the past three to four years continued to decrease every year. Many of these are still available on the market, Colliers noted.
Approximately 22,780 condominium units were launched between 2011 and the first half of 2015; around 66 percent were in Cha Am, 20 percent were in the Hua Hin coastal area, 9 percent were in the Hua Hin inland area and 5 percent were in the Pranburi area. The Hua Hin Inland area is the main location for housing development due to lower land prices than in the coastal areas.
Although the main buyers in the Cha Am, Hua Hin and Pranburi areas are Thais looking to buy a condominium or house as a second home, many foreigners also buy in this area, but only a small number compared with the past few years. Most are looking for small detached houses in the
Hua Hin Inland area with a price not over THB 4 million, and some are staying in beachfront condominium projects that were completed more than 10 years ago due to the lower prices. Most foreigners that are staying in the Cha Am, Hua Hin and Pranburi areas are already retired and opted to live in Thailand because of the lower cost of living, the convenience and safety, as well as the international hospitals in the area.
Property markets in other resort destinations are facing problems related to decreasing demand, while demand in Cha Am, Hua Hin and Pranburi is still increasing slightly. The average take-up rates of land and housing development units are approximately 75 percent and 80 percent for overall condominium units in the market.
Most condominium units that were sold in the past few months were priced between THB 3 million and THB 5 million per unit. Many low-level condominium units were launched in the past few years, but mid- to low-level buyers are not as confident in their financial situations so postponed their buying decision and will likely do so for the remainder of the year.
Condominium developers in the Cha Am, Hua Hin and Pranburi areas are not concerned with the take-up rate, but they are concerned with the transfer rate. This is because more than 8,000 condominium units are scheduled to be completed and transferred in 2H 2015. Most developers in the Cha Ama, Hua Hin and Pranburi areas are trying to boost sales with a number of marketing campaigns, activities and promotions, as well as sales booths outside the area, especially in Bangkok.
The average price of condominium units in all locations, as of the end of June 2015 increased from the previous six months by between 3 percent and 5 percent, although some projects are scheduled to be completed and transferred in 2015. This is because all developers tried to attract more buyers during the market slowdown by keeping the same selling prices or increasing them by only a few percentage points.
Looking forward, Colliers said that all developers will postpone launching their new condominium projects during the second half of 2015 and wait for the market to recover and for a better economic overview. All property markets in Thailand have slowed, but Cha Am, Hua Hin and Pranburi still continued to grow slightly in the past few years.
Thai buyers have been the main target group, especially for the condominium market, in the past two to three years, with the demand for properties selling for around THB 3 million to THB 5 million still continuing to grow, both for houses and condominiums.
To read the full report from Colliers International Thailand click here.
