After more than 10 years of stagnation, the condominium sector in the northern Thailand city of Chiang Mai is booming again The first five months of 2013 saw the hhigest number of units come to market in the last 17 years, and at prices that are some 11 percent higher the the same period in 2012.
According to statistics from the Department of Land and presented by Colliers International Thailand, there are approximately 18,640 condominium units in Chiang Mai – more than 6,000 of which have been launched in the last two years alond. Average take-up rate in the first five months of 2013 was around 72 percent.
The report noted that because land has been available at a reasonable price in and around Chiang Mai, and because Thais tend to prefer to live in landed developments, condominiums have traditionally not been the most popular form of development in the city. However, Chiang Mai province is home to a large number of universities with more than 100,000 students, for whom buying a condominium is often more attractive than renting an apartment.
In addition, Chiang Mai’s economy has enjoyed sustained growth over the last decade, and its close proximity to neighbouring countries means this is likely to continue. Over the last few years a large number of new shopping malls and other retail developments have been built, and there are government plans for several large infrastructure projects that would directly benefit the city, including a second airport; a high-speed railway from Bangkok to Chiang Mai; and a motorway between Chiang Mai and Chiang Rai.
The report noted that condominiums have not been buyers’ first choice because there is still a lot of land available in Chiang Mai, but after the government announced the development of a high-speed train from Bangkok to Chiang Mai a few years ago, a lot of condominium developers have launched projects in provinces along the development lines, including Chiang Mai.
According to the report. Chiang Mai’s economy has grown over the last several years and it is an educational centre for the northern part of Thailand. There are more than 10 universities and more than 100,000 students in the province, as well as a lot of people who moved to Chiang Mai for their employment. In addition, the government plans to develop a lot of infrastructure in the province and build links to other provinces, such as a high-speed train from Bangkok to Chiang Mai, a second airport, a motorway from Chiang Mai to Chiang Rai to support logistics and a new industrial area in Chiang Khong.
Chiang Mai will probably become a main business city for ASEAN, especially for Myanmar, Laos, Thailand and China.
The previous Chiang Mai town plan expired in December 2006, so there was no town plan regulating and controlling development and construction from2006 until May 2013. The new Chiang Mai town plan, released in May 2013, affects some locations in Chiang Mai, especially in the City area.
The average land price in some locations of Chiang Mai increased more than 100% over the past few years, especially on Nim Man He Min and Chiang Mai – Lampang Roads and some other main roads. Most new developments in 2012 and 2013 are in the Outer City area, due to the increasing land prices in the City area.
There were some condominium projects launched in 2011 – 2012 and some are planned for launch in the second half of 2013 and next year, most of which are in the Outer City area. This is because developers seem to target the middle-income market in
Chiang Mai, not just students or the low-end market in the university zone. The average price of condominium units launched during the first five months of 2013 is around 11% higher than last year. The increase in the minimum wage and logistics costs over the past few years also affected the market, noted the report.
Interested readers can read the full Colliers Chiang Mai summary reseaeach report here.
Andrew Batt, International Group Editor of PropertyGuru, wrote this story. To contact him about this or other stories email andrew@allproperty.com.sg
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