Chiang Mai Condominium Report

MAY 2012 | condominium market

thailand

Chiang Mai Condominium Report

Chiang Mai Condominium Report Executive Summary According to statistics from the Department of Land, there are approximately 16,580 condominium units in Chiang Mai. More than 2,854 units were launched from 2011 to May 2012, of which approximately 1,090 units are in the City Area and more than 1,760 units are in the Outer City Area.

Approximately 72% of the total condominium units in the market are one-bedroom units.

There are approximately 1,200 units under construction and scheduled to be completed in 2013 in City Area. Nearly 1,800 units are expected to be completed in 2013 in the Outer City Area.

Although most condominium projects in the market were launched in 2011, the average take-up rate in both areas is approximately 76%.

The average selling price in the Outer City Area is 13% higher at around THB38,650 per sq m, against approximately THB34,160 per sq m in the City Area.

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Chiang mai Condominium Report | MAY 2012 SUPPLY Historical supply by year, May 2012

Source: Department of Land, Colliers International Thailand Research Remarks: Statistics for 2012 are from January to May only.

Chiang Mai is the main business city and educational centre of northern Thailand. Many people from around the country moved to Chiang Mai for their education which lasts for four to five years.

were the best choice for developers and buyers and therefore, many condominium projects were launched during that period in the main cities of Thailand including Chiang Mai.

The first condominium project registered in the Chiang Mai City Area was in 1990 with 103 units. More than 13,200 units or around 80% of the total supply were built from 1990 to 1996. The effects of financial liberalisation in the country from 1987 to 1995 made Thailand’s economy grow very rapidly until the financial crisis in 1997. Prior to the crisis, real estate was an “in-style” business in Thailand. Condominiums

After the crisis, from 1997 until 2011, only around 3,300 units were added to the market. This was partly because Thais prefer living on landed developments. Condominiums were not the buyers first choice because there is still a lot of land available in Chiang Mai. As of May 2012, there are approximately 16,580 units in the market according to statistics from the Department of Land.

Historical supply by location and year, May 2012

Source: Department of Land, Colliers International Thailand Research Remarks: Statistics for 2012 are from January to May only.

The total number of condominium units in the City Area is the highest, and the first project there was completed in 1985 with around 103 units. In the Outer City Area, the first project was completed in 1991.

Thailand’s economic growth from 1987 to 1995 directly affected land

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prices, especially in the main business cities, including Chiang Mai. Many developers in Chiang Mai were focusing more on condominium developments in the City Area for the middle-income group from 1987 to 1995.

Chiang mai condominium Report | May 2012 Proportion of historical supply, May 2012

Source: Department of Land, Colliers International Thailand Research Remarks: Statistics for 2012 are from January to May only.

The City Area has the largest condominium market share at approximately 62% of the total supply or around 10,300 units; 86% of the supply in the City Area was completed before 1997. There are more

than 6,230 units located in the Outer City Area and more than 73% of them were completed before 1997. Approximately 2,300 units were completed in 1991, the highest on record.

Condominium units available for sale, May 2012

Source: Department of Land, Colliers International Thailand Research Remarks: Statistics for 2012 are from January to May only.

There are approximately 430 condominium units available for sale in the City Area of the total 1,770 units. Nearly 62% of these were launched from 2011 to May 2012. There are around 540 condominium

units available for sale in the Outer City Area. More than 78% of the total 2,247 units were launched from 2011 to May 2012.

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Chiang mai Condominium Report | MAY 2012 UNITS LAUNCHED Condominium units launched from 2005 to May 2012 by location

Source: Department of Land, Colliers International Thailand Research Remarks: Statistics for 2012 are from January to May only.

There were more than 2,854 units launched from 2011 to May 2012.

Of these, approximately 1,090 units are in the City Area and more than 1,760 units are in the Outer City Area. Condominium projects in the Outer City Area regained popularity in 2011 when there were around 1,460 units. This was due to increasing land prices, limited available plots of land with reasonable prices in the City Area and the extension

of the road and transport system in Chiang Mai’s Outer City Area.

The most popular locations for condominium development in Chiang Mai are along Huai Kaew Road and Khan Klong Chonlapatarn Road, in the northwest of the city. Housing projects are mostly located in the eastern part of Chiang Mai.

Proportion of condominium units launched from 2005 to May 2012 by type

Source: Colliers International Thailand Research

One-bedroom units are in the majority in Chiang Mai. A one-bedroom unit in Chiang Mai is around 31 - 39 sq m. Most buyers in the area are

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locals and young people working or studying in Chiang Mai.

Chiang mai condominium Report | May 2012 Average room size of condominium units launched from 2005 to May 2012

Source: Colliers International Thailand Research

The biggest target group for condominium projects in Chiang Mai are students or young adults working there who prefer to live in a one-

bedroom unit of their own rather than leasing an apartment.

FUTURE SUPPLY Cumulative future supply scheduled to be completed from 2012 to 2014 by location

Source: Colliers International Thailand Research Remarks: The year completion is expected by developers

Due to the limited amount of land available with reasonable prices in the City Area, only approximately 1,200 units are under construction

and scheduled to be completed in 2013. Nearly 1,800 units are expected to be completed in 2013 in the Outer City Area.

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Chiang mai Condominium Report | MAY 2012 DEMAND Take-up rate of all condominium projects in the market, May 2012

Source: Colliers International Thailand Research

The average take-up rates in both areas are similar at approximately 76%. Around 1,960 units or 48% of the total units in the market were launched in 2011. The Outer City Area shows the best performance

with more than 1,760 units being built from 2011 to May 2012. However, the average take-up rate is still close to that in the City Area.

PRICE Average selling price of condominium units available for sale in Chiang Mai, May

Source: Colliers International Thailand Research

The average selling price in the Outer City Area is 13% higher than in the City Area. This is because most condominium projects in the City Area were built for the middle-income market. These projects are

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usually located around universities targeting students or people working at the university or working in the City Area.

Chiang mai condominium Report | May 2012 Outlook The real estate market in Chiang Mai continues to grow in 2012 and will carry on for the next few years. This is due to the expansion of Chiang Mai and projects being developed by the government and private sectors. As the locals in Chiang Mai prefer to live in landed property homes, many landed development projects were launched in the past few years. However, the new generation of people from Chiang Mai and other provinces, as well as foreigners, now choose to live in condominiums. Moreover, Chiang Mai is a major business center in the northern part of Thailand. It has a huge potential for the AEC in 2015 because of its proximity to Myanmar, Laos and China. There are several new shopping malls and community malls under construction in Chiangmai, some of which are scheduled to be completed in 2012 in the Outer City Area.

Local developers are very well known. They acquire high market share with only few condominium projects. Some listed companies from Bangkok also launched condominium projects in Chiang Mai and

were welcomed by the locals with very high sales volume. As most buyers in Chiangmai are the locals, all developers may not see much movement in the market in the near future. Their numbers are still limited when compared to the increasing residential supply over the past few years. The developers may pause while trying to build brand loyalty with the current projects in the pipeline. Brand awareness will make it easier for their new projects to sell out easily and quickly in the future.

There are some of condominium projects which are planned to be launched in the second half of 2012 and next year, most of which are in the Outer city area. This is because all developers seem to target the middle income market in Chiang Mai, not just students or low end market in the university zone. The average price of condominium units launched during the first five months of 2012 is higher than last year by around 5.5%. The increase in the minimum wage and logistic cost in these few years also affects the market.

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Chiang mai Condominium Report | MAY 2012

APPENDIX

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Chiang mai condominium Report | May 2012 Zoning

City Area Most condominium projects are located in the City Area, especially along Huai Kaew Road as the universities are located there. The City Area includes Chiang Mai’s old town and its surrounding area. This runs from above Road No. 1141 and Suthep Road to the Super Highway and Chotana Road in the north, and Charoenrat Road and Chiang Mai – Lamphun Road in the east.

Outer City Area The area along the Khan Klongchonlapratarn Road is the new location for condominium development as it directly connects to the City Area. This area starts from the southern side of Road No. 121 in the north and continues on Road No. 121 in the east to Road No. 121 in the south, but excludes all parts of the City Area.

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Bangsaen Condominium Report | MAY 2012 COLLIERS INTERNATIONAL THAILAND MANAGEMENT TEAM PROJECT SALES & MARKETING Monchai Orawongpaisan | Senior Manager RESIDENTIAL SALES & LEASING Napaswan Chotephard | Manager RESEARCH Tony Picon | Associate Director Surachet Kongcheep | Senior Manager OFFICE & INDUSTRIAL SERVICES Narumon Rodsiravoraphat | Associate Director RETAIL SERVICES Asharawan Wachananont | Associate Director ADVISORY SERVICES | HOSPITALITY Jean Marc Garret | Director ADVISORY SERVICES Napatr Tienchutima | Associate Director REAL ESTATE MANAGEMENT SERVICES Prasert Saiphrawan | Senior Manager INVESTMENT SERVICES Nukarn Suwatikul | Associate Director Wasan Rattanakijjanukul | Senior Manager

522 offices in 62 countries on 6 continents • A leader in real estate consultancy worldwide • 2nd most recognized commercial real estate brand globally • 2nd largest property manager • 1.25 billion square feet under management • Over 12,300 professionals COLLIERS INTERNATIONAL Thailand: Bangkok Office 17/F Ploenchit Center, 2 Sukhumvit Road, Klongtoey, Bangkok 10110 Thailand tel +662 656 7000 FAX +662 656 7111 Email info.th@colliers.com Pattaya Office 519/4-5, Pattaya Second Road (Opposite Central Festival Pattaya Beach), Nongprue, Banglamung, Chonburi 20150 tel +6638 427 771 FAX +6638 427 772 Email info.pattaya@colliers.com Hua Hin Office 27/7, Petchakasem Road, Hua Hin, Prachuap Khiri Khan 77110 Thailand tel +6632 530 177 FAX +6632 530 677 Email info.huahin@colliers.com

VALUATION & ADVISORY SERVICES Phachsanun Phormthananunta | Director Wanida Suksuwan | Associate Director PATTAYA OFFICE Mark Bowling | Senior Sales Manager Supannee Starojitski | Senior Business Development Manager / Office Manager HUA HIN OFFICE Sunchai Kooakachai | Senior Manager

researcher:

researcher:

Thailand Surachet Kongcheep Senior Manager | Research email surachet.kongcheep@colliers.com

Thailand Phattarachai Taweewong Senior Researcher | Research email phattarachai.taweewong@colliers.com

researcher:

researcher:

Thailand Wiparut Ruangsombat Researcher | Research email wiparut.ruangsombat@colliers.com

Thailand Benjaporn Wong-ek Researcher | Research email benjaporn.wong-ek@colliers.com

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