In a recent survey conducted by Plus Property, the company found that condos dominated the market share in 5 major tourism towns accounting for 76% of the market. The cities surveyed were Chiang Mai, Phuket, Pattaya, Hua Hin/Cha-am, and Khao Yai.
“During 2016-2017, the condo markets in Chiang Mai, Hua Hin/Cha-am, and Phuket continued to grow because of demand from those wanting to purchase the rooms for vacation homes. The markets in Pattaya and Khao Yai were relatively stable due to the discharge of leftover supply, although expansion was observed in some locales and at some price points where purchasing power still existed. Nonetheless, we still see a tendency for future expansion, which will come about because of more concrete infrastructure developments. Some new supply has already started to enter the market here”, says Anukul Ratpitaksanti, Managing Director, Plus Property Company Limited.
Condo projects in tourism hotspots are seeing growth over the previous 2 to 3 years. The average sale price for the 5 cities surveyed has reached about 80% of a total supply of nearly 100,000 units on the market. Returns for investors were also quite positive while resale prices were also on the up, according to Plus Property.
“The annual rate of return stood at 6-8 per cent in Phuket and 5-7 per cent in Pattaya. Meanwhile the resale price in Khao Yai has been rising 5-6% per year whereas the resale price in the Hua Hin/Cha-am area jumped markedly in 2017, with beachfront projects experiencing a 10% price rise over the previous year and non beach projects having seen a price rise of 19%. Current buyers in the said markets prefer to purchase their room for leisure use and for letting during high season,” says Anukul.
Plus Property found that in the Khao Yai and Hua Hin/Cha-am areas, close to 100% of tenants belong to the tourist group. Occupancy in these areas is highest during October to February with the average length of stay being 45 days. Many buyers of condo units here will stay at their property during this time and then let it out when they are in their home country.
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