The latest research to emerge from the Pattaya property sector makes grim reading for investors and speculators in the Gulf of Thailand city, where there are currently more than unsold 19,300 units on the market.
In its Pattaya City Condominium Market 2H 2014 research report, Colliers International Thailand noted that approximately 10,000 units are sold per year in the Pattaya condominium market, and that there may be more than 22,000 units available if all of those belonging to investors and speculators are included in the figures.
The real estate firm reported that construction is slowing, and that the slowdown is directly affected by the financial performance of property developers in the city. It noted that many developers have postponed or delayed their completion dates.
Colliers also reported that new condominium prices may not significantly increase during 2015. It attributed this prediction to the fact that many unsold and second-hand condominium units on the market has affected the price of new condominium launches. It did note an exception in the luxury sector, however.
Demand in the Pattaya City condominium market may not recover during 2015, it reported. The Russian rouble decreased in value in 2014 and may not recover during 2015, and this Colliers said will directly affect the Pattaya condominium market.
Colliers also revealed that most Thai buyers are also concerned with the oversupply situation in Pattaya, and have postponed their buying decisions this year.
To illustrate the oversupply situation, Colliers reported that approximately 16,916 units per year were launched during the period between 2011 and 2013, and more than 12,460 units during 2014. This was at a time when only between 10,000 and 14,000 units per year were being sold.
Political issues in the last quarter of 2013 and the first few months of 2014 were a major concern for developers, and only around 3,800 units were launched in the first half of last year.
After the new government as formed in August 2014, confidence was restored in the last six months of the year developers launched more new projects – nearly 8,670 units in all – although the Pattaya condominium market already showed signs of oversupply.
Colliers added: “Some Chinese developers are scheduled to launch new condominium projects in Pattaya City in 2015, especially in Jomtien and Na Jomtien, as well as some Thai developers from Bangkok who have announced the launch of new projects in 2015.
“The Pattaya condominium market has still not recovered and is directly impacted by the oversupply problems.”
In its market forecast, Colliers reported: “Chinese developers are becoming the new group in the Pattaya City condominium market, following the flood of Chinese tourists that came to Pattaya during the past few years.
“Some water park projects are under construction and expected to be completed between now and 2016. When all of the projects have been completed, many Thai and foreign tourists will be attracted and the property market in Pattaya.”
Read the full Colliers International Thailand Pattaya H2 2014 research report HERE.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
