Market Research pattaya C O N D O M I N I U M market PATTAYA CONDOMINIUM MARKET OVERVIEW | 1 s t h a l f | 2 0 0 9
c o l l i e r s i n t e r n at i o n a l
| T H AILAN D
The Knowledge Report Pattaya CON D O M I n I U M m a rk e t |
1 st h a l f
|
2009
PATTAYA CONDOMINIUM MARKET OVERVIEW Market Indicators 1h 2009 2h 2009F
SUPPLY DEMAND take up rate average selling price
The real estate market is big business in Pattaya, especially property development. The key factor of success in developing a condominium in Pattaya is the developers. Larger developers can raise confidence among buyers thanks to their reputation and/or consutrction track record. Based on our experience, unsuccessful condominium projects are not developed professionally and we believe that there is an opportunity for strong new players to start developing true five-star residential projects in Pattaya.
www.colliers.co.th
Pattaya is a city located on the east coast of the Gulf of Thailand about 165 km southeast of Bangkok. It is within, but not under the jurisdiction of Amphoe Bang Lamung in the province of Chonburi. The city of Pattaya is a self-governing municipality that covers the whole Tambon of Nong Prue, Na Klua, parts of Huai Yai and Nong Pla Lai. It is located within the heavily industrialized Eastern Seaboard zone, along with Sri Racha, Laem Chabang and Chon Buri. Pattaya is also the centre of the Pattaya-Chonburi Metropolitan Area, the conurbation in Chonburi Province. The real estate market is big business in Pattaya, especially property development. Many new buildings have gone up in recent years and some people think the market might be oversupplied. Some buildings are put up. There is also a market for villas, but its growth is limited. “Greater Pattaya” occupies most of the coastline of Banglamung (one of the 11 districts that comprise Chonburi Province). It is divided into a larger northern section that spans the areas to the east of Naklua Beach (the most northern beach) and Pattaya Beach (the main beach), plus the Buddha Hill headland (immediately south of Pattaya Beach), and a smaller southern section covering the area to the east of Jomtien Beach (which lies directly south of Buddha Hill), including Dongtan Beach. Jomtien’s beaches are much broader and generally in better shape, and the atmosphere locally is more sedate and family-oriented than at Pattaya Beach.
The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market
2
Colliers International
The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market
Supply Trends Condominium Locations Our study is focused on the major areas of condominium accommodation in Pattaya, which can be subdivided into four main areas: 1. Wongamat: This is the area to the north of Pattaya Nua. It is considered a peaceful, more up-market location and is a relatively new area for condominium development. The current developments under construction in this area are Northpoint, The Cove, Ocean’s Edge and many more. The condominium
units in this precinct offer a total supply of 3,434 units. During the first half of 2009, there were four condominium project was added to the supply in the area.
Table 1 : Supply Added in Wongamat Area, 1H 2009
No.
Project Name
Developer
no. of Units
1
Near Beach Residence
T K R Engineering and Supply Company Limited
59
2 3
Wongamat Privacy Condominium D
Royal and Spa Condotel Company Limited
78
Wongamat Privacy Condominium C
Royal and Spa Condotel Company Limited
4
View Talay Residence Condominium VI
76
Siam Best Enterprise Company Limited
79
Source : Department of Land, Pattaya & Colliers International Thailand Research
2. Pattaya: This area is situated alongside the city centre. The section of beach from Central Road (Pattaya Klang) south to the harbour is adjacent to the core of Pattaya’s abundant nightlife area. Many sections of the beach are covered by rented deckchairs run by local beverage vendors during daylight hours. Pattaya Nua and Klang are the areas favoured by Asian visitors, especially Chinese and Korean, while the area of South Pattaya is
popular among Middle Eastern, South Asian and Russian visitors. Condominium projects in the vicinity include Northshore, Saratta and Nova Atrium to name just a few. The condominium units in this vicinity total 6,021 units. Three condominium projects were added to the supply in this area in 1H2009.
Table 2 : Supply Added in Pattaya Area, 1H 2009
No.
Project Name
1
The Paradise Residence Condominium
2
Pattaya Klang Centre Point Condominium
3
The Pride – Tower B
Developer
no. of Units
Thanabutchai Realty Company Limited
78
Central Pattaya Centre Point Company Limited
230
Prinsiri Public Company Limited
79
Source : Department of Land, Pattaya & Colliers International Thailand Research
Colliers International
3
The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market
3. Pratumnak: This area covers the main thoroughfare connecting Pattaya and Jomtien Beach. The recent trend in the area is the opening of many upscale restaurants along Thappraya Road. Despite this, there are many condominium
units nearby; among them Royal Cliff Garden and Royal Beach Condotel have excellent reputations. This area is also very popular with Scandinavian and Russian visitors.
Table 3 : Supply Added in Pratumnak Area, 1H 2009
No.
Project Name
Developer
no. of Units
1
The Bay View II Condominium
Haven Sky Holding Company Limited
37
2
Villa Norway Residence I
Siam Ruby House Company Limited
21
Source : Department of Land, Pattaya & Colliers International Thailand Research
4. Jomtien: Jomtien beach is about 1 km south of Pratumnak Hill. The locale is home to many high-rise condominiums, beach front hotels, beaches, shops and restaurants. The area at the beginning of Jomtien is considered busy, while the
area located at the end of this beach, called “Na Jomtien�, is considered peaceful and tranquil. There are many plots of vacant land available at Na Jomtien for future development.
Table 4 : Supply Added in Jomtien Area, 1H 2009
No.
Project Name
1
Avatara Condominium
2
View Talay Residence Condominium IV
Source : Department of Land, Pattaya & Colliers International Thailand Research
4
Colliers International
Developer
no. of Units
The Grand Iyara Company Limited
31
Siam Best Enterprise Company Limited
79
The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market
Total Current Supply At the end of 2008, the supply of condominium units was approximately 39,555 units. From Jan-Jun 2009, approximately 847 units were added to the supply, bringing the current total supply of condominiums to approximately 40,402 units in Pattaya’s condominium market. The sharp increase in condominiums in
Pattaya was found in 2006, up 18.06% over 2005. The growth rate of new supply is projected to average 9.96% per year from 2003 to 1H 2009.
Figure 1 : Supply of Pattaya Condominium Units, 2003 - 1H 2009
Source : Department of Land, Pattaya & Colliers International Thailand Research
The majority of condominium supply is in the Jomtien area, representing about 65% of the total, followed by the Pattaya
and the Pratumnak areas, representing about 15% and 11%, respectively.
Figure 2 : Supply of Pattaya Condominium Units by Location, 1H 2009
Source : Department of Land, Pattaya & Colliers International Thailand Research
Colliers International
5
The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market
Future Supply Approximately 75 condominium projects with over 15,288 units will be launched in 2H2009 and beyond, with the majority in the Jomtien Beach area due to the availability of land and the
favourable location close to the beach, as well as the high density in Pattaya. Future developments will shift to the Baan Amphoe and Bang Saray areas.
Table 5 : Future Supply of Pattaya Condominium Projects, 2H2009-2013f
No.
Project Name
Location
No. of Units
Est. Completion
1
High Point
Wongamat
49
2009
2
Avenue Residence
Pattaya
228
2009
3
Maxx Central
Pattaya
48
2009
4
Pattaya Beach Resort
Pattaya
146
2009
5
TW Pattaya Klang
Pattaya
178
2009
6
Vogue
Pattaya
50
2009
7
Emerald Palace
Pratumnak
43
2009
8
Nova Oceanview
Pratumnak
78
2009
9
Phuview Talay
Pratumnak
79
2009
10
Siam Oriental Twins
Pratumnak
69
2009
11
View Talay Residence 5
Pratumnak
76
2009
12
Boulevard de Jomtien
Jomtien
10
2009
13
Jens Apartment
Jomtien
24
2009
14
Regatta
Jomtien
66
2009
15
Thaiswai Residence
Jomtien
70
2009
16
Sunrise Beach Villa
Jomtien
27
2009
17
Park Royal
Pratumnak
39
2009
18
The Urban Pattaya
Pattaya
168
2009
19
Katilina Residence II
Pratumnak
38
2009
20
North Point
Wongamat
377
2009
21
Poom Patta
Pattaya
158
2009
22
Laguna Heights
Wongamat
80
2009
23
One Pattaya Height
Pratumnak
47
2009
24
Suan Sawan
Pattaya
272
2009
25
Jomtien Beach Mountain
Jomtien
77
2009
26
Pattaya City Resort
Pattaya
192
2009
27
The Sanctury Wongamat
Wongamat
199
2009
28
TW Wongamat Beach
Wongamat
412
2009
29
Royal Beach View
Pratumnak
36
2009
30
La Royale Beach
Jomtien
165
2009
31
The Montrari
Jomtien
18
2009
32
Siam Ocean View
Pratumnak
43
2009
33
Pattaya Heights
Pratumnak
94
2009
34
Life Vela Casa
Wongamat
355
Aug. 2009
35
The Amber Royal Hill Condo
Pratumnak
56
Dec. 2009
36
LK Legend
Pattaya
279
2010
37
Elegance
Pratumnak
79
2010
Remark : The planned projects are based on reports from developers and may be subjected to delay. Source : Developers announcements and Colliers International Thailand Research
6
Colliers International
The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market
Table 5 : Future Supply of Pattaya Condominium Projects, 2H2009-2013f
No.
Project Name
Location
No. of Units
Est. Completion Year
38
On the hill
Pratumnak
31
2010
39
TW Jomtien Beach
Jomtien
216
2010
40
View Talay 7
Jomtien
2,400
2010
41
Royal Residence 2
Jomtien
36
2010
42
Sunrise Royal Scandinavian
Jomtien
125
2010
43
The Urban Suite
Pattaya
79
2010
44
Sunset Boulevard Residence
Pratumnak
126
2010
45
The Ocean Pearl (Phase 1)
Pratumnak
67
2010
46
Tropical Dream
Pratumnak
70
2010
47
The Cove
Wongamat
103
2010
48
Tudor Court
Pratumnak
136
2010
49
Diamand Suite
Pattaya
282
2010
50
Ocean’s Edge
Wongamat
32
2010
51
The Park Jomtien
Jomtien
160
2010
52
APUS
Pattaya
158
2010
53
Tropicana Condotel
Pratumnak
70
2010
54
City Garden Pattaya
Pattaya
366
2010
55
City Condo @ South Pattaya
Pattaya
360
2010
56
Executive Residence 5
Pratumnak
60
2010
57
Jomtien Plaza Condominium
Jomtien
140
2010
58
Jomtien Beach Penthouses
Jomtien
78
Oct. 2010
59
Waterfront
Pratumnak
325
2011
60
Viewtalay Marina Beach Condominum
Jomtien
1,208
2011
61
Wongamat
Wongamat
79
2011
62
Park Lane
Jomtien
608
2011
63
The Pride 2
Pattaya
79
2011
64
Hyde Park Residence
Pratumnak
79
2011
65
Saratta Residence
Pattaya
12
2011
66
Eastpoint Condominium
Pattaya
156
2011
67
The Ocean Pearl (Phase 2)
Pratumnak
67
2011
68
AD Hyatt
Wongamat
512
2012
69
The Loft Southshore
Pratumnak
726
2012
70
W Tower
Wongamat
355
2012
71
Reflection
Jomtien
332
2012
72
Ananya Beachfront Condominium
Wongamat
50
2012
73
Life Star City Tower
Pattaya
116
2012
74
Ocean 1 Tower
Jomtien
611
2012
75
The Chateau
Pratumnak
453
2012
Remark : The planned projects are based on reports from developers and may be subjected to delay. Source : Developers announcements and Colliers International Thailand Research
A total of 4,146 condominium units will be added to the supply in Pattaya, increasing the total by the end of 2009 to 43,701 units.
Colliers International
7
The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market
Figure 3 : Future Supply of Pattaya Condominium Units, 2H2009-2012f
Source: Colliers International Thailand Research
Demand Trends International buyers are mostly tourists who visit Pattaya regularly, with most of them looking for a good return on their investment
in these projects. The following are the target tourists interested in buying Pattaya condominium units.
Figure 4 : international tourists visiting pattaya, 2007 & 2008
Source : THA,TAT & Colliers International Thailand Research
8
Colliers International
The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market
1. Russians: Marketing agents and developers identify the main buyers as visitors from Russia. In 2007, 889,656 Russians visited Pattaya, up 84% over 2006, making them the leading market for the resort after only Thais, 1.51 million of whom checked into Pattaya hotels in 2008. However, the number of Russians visited Pattaya has declined in 2008 to 564,483 persons. Although Russians have been visiting Pattaya for more than a decade, only in the past two years have they started to buy up property in Pattaya and the trend is catching on. 2. Expat Market: Located in such centres as Hong Kong, Singapore, Tokyo, Bangkok, Phuket and Chiang Mai, the expat market is attracted by Pattaya’s comparatively low land prices and cost of living. Knowing Asian markets well, they are particularly attracted by a potential yield of circa 9-11% on prime developments and spectacular rates of capital growth, which can be as high as 50%. 3. British: Before the Russians rushed into Pattaya’s property picture, the main buyers were British visitors, many of them looking for a second home aboard and a retirement spot. 4. Scandinavians: Like the Russians, this group has proved a large and growing market for properties in Pattaya and the surrounding areas over the past two years. Another similarity is that sales to both Russian and Scandinavian buyers tend to be handled through their own national networks.
travelling to the area, up 32% over 2002. The important factor behind Korean’s love of Pattaya and as property buyers is their love of golf, as Pattaya has many golf courses in the surrounding area. 6. Middle East: The Middle East has potential in terms of property purchases in Pattaya, with visitors from the region up 25.08% over 2002. 7. India: The number of Indian tourists visiting Pattaya is up 42% since 2002. 8. Thailand: The attitude of Thais towards the resort is as a residential area and they take the following issues into consideration: - Location: A short distance from Bangkok, with a driving time of approximately one and a half. - Geographic area: They prefer to buy a resort property in a beach rather than a mountain area since the beach offers many sporting activities for the whole family. - Completed facilities: These should have restaurants, entertainment and shopping options.
5. Korean: Korean visitors tend to be interested in buying property in Pattaya due to the increasing number of tourists From 1-15 June 2009 the Land Department in Pattaya shows that the majority of condominium buyers are foreigners, representing 82% of the total, while just 18% of buyers are Thais.
Figure 5 : Proportion of Thais and Foreign Buyers of Condominium Units in Pattaya, Jun 1-15, 2009
Source : Department of Land, Pattaya & Colliers International Thailand Research
Colliers International
9
The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market
Approximately 319 second-hand condominium units were sold in the first half of June 2009, while 73 of the total 392 units sold
were newly completed.
Figure 6 : Demand for NEWLY Condominium PROJECTs and Second-Hand comdominium Projects among Thais and Foreigners, Jun 1-15, 2009
Source : Department of Land, Pattaya & Colliers International Thailand Research
Condominium units in highest demand are those measuring less than 50 sq m, representing about 83% of the total, followed by
those between 50 sq m and 99 sq m, representing 14%. Demand for units bigger than 100 sq m represents just 3% of the total.
Figure 7 : Demand for Condominium in Pattaya by unit Size
Source : Department of Land, Pattaya & Colliers International Thailand Research
10
Colliers International
The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market
We have measured the absorption of units in projects that were marketed during 2008 and applied this as a proxy for demand during the year.
the end of 1Q2009. Thus, there were approximately 5,701 units available for sale, making the cumulative selling rate of condominium units up until 1Q2009 54.32%.
A total of 12,479 condominium units in Pattaya were marketed in 2008, with the cumulative number of units sold 6,778 at
Figure 8 : Demand for Condominium Units in Pattaya
Source : Colliers International Thailand Research
Demand by Unit Type The most popular type of condominium unit in Pattaya is studio and 1-bedroom types, while the least favourite type is the bigger unit with three bedrooms. However, many units are still
remaining due to the global recession, which slowed down the sales rate in the first half of 2009.
Figure 9 : Demand for Pattaya Condominium by unit Size
Source : Colliers International Thailand Research
Colliers International
11
The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market
Demand by Location We have measured the absorption of units by location in newly launched projects during the year and applied this as a proxy for demand by location. In 2008, the Wongamat area showed the highest absorption rate, with the percentage sold at 59.96%. This area was followed by the Pratumnak and Pattaya areas, with 42.88% and 30.29%, respectively. The percentage sold in the Jomtien area was the lowest, at only 13.98% of the total number of units launched
in 2008. Demand for condominium units in the Jomtien area showed to be the worst performance due to the high number of units currently available and over supply in the area. In an economic downturn, all consumers, except those in the livefor-today segment, typically re-evaluate their consumption priorities.
Figure 10 : sales proportion of Newly Launched Units in 2008 by Location
Source : Colliers International Thailand Research
12
Colliers International
The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market
Price The sales price on all projects varies considerably, depending on the launch time, the project/unit design, level of interior finish, facilities, location and quality of the product. The condominium market in Pattaya is attractive to both Thais and foreigners, due to its proximity to Bangkok and the number of completed facilities in the area. The key factor when purchasing property is location. It is significant to consider the property’s surroundings, access and convenience of infrastructure. Pricing
alone is not the top priority. Another critical element is timing and identifying the right property. The average sales price will vary according to location, building specifications and decoration. In order to clarify the price, we will focus on the following locations since condominium prices are a function of land prices, which depend on location.
Table 6 : Average Selling Price of Condominium Units in Pattaya, 1H 2009
Area
Average selling price
Wongamat
THB90,000–135,000
Pattaya
THB85,000–120,000
Pratumnak
THB70,000–110,000
Jomtien
THB95,000–130,000
Source : Colliers International Thailand Research
During the global recession, there has been some demand for Pattaya condominiums, although the majority of this demand is for self-use, rather than as an investment. From the data of the Department of Land, Pattaya, from Jun 1-15, 2009, it can be seen that the highest number of condominium units sold in Pattaya were those units with prices below THB 1 million, while the lowest numbers sold were those in the price range of above THB10 million. High-end properties, not only in Pattaya
but in all areas, are seeing some of the largest declines. This is not surprising since the buyers in this sector of the market are typically cash rich, astute business people who know that they have a good chance of securing a better deal by holding off. In the low end of the market, mortgages can be harder to secure and, with this sector poised to become more crowded as prices decline, some time will likely need to pass before demand starts to pick up.
Figure 11 : Demand for Pattaya Condominium by Price Range, Jun 1-15, 2009
Source : Department of Land, Pattaya & Colliers International Thailand Research
Colliers International
13
The Knowledge Report | 1st Half | 2009 | Pattaya Condominium Market
Outlook: Facilities, activities and infrastructure in Pattaya has been developed continually, with many new developments to serve the residents. The retail market is complete as Avenue Pattaya and the Central Festival Pattaya Beach. Shopping centres make it convenient for the residents in terms of offering daily products and services. In addition, premium or luxurious products and services can be found in Pattaya, including international medical centres and schools. The key factor of success in developing a condominium in Pattaya is the developer, who should have proper funding and strong experience in condominium, residential or hotel developments. Larger developers can raise confidence among buyers thanks to their reputation and/or construction track record. A prime condominium site should be on the beachfront or a hillside site that offers sea views and beach access, also providing buyers with a level of privacy. The right products also need to be provided to meet the current trends in demand. Based on our experience, unsuccessful condominium projects are not developed professionally and we believe that there is an opportunity for strong new players to start developing true five-star residential projects in Pattaya. Notes The condominium rating used in our research is based solely on property ratings and the rates achieved obtained from market research. The rating system used in our report is not that of Colliers International.
294 offices in 61 countries on 6 continents USA 94 Canada 22 Latin America 17 Asia Pacific 64 EMEA 97 US$ 1.6 billion in annual revenue 1.1 Billion square feet under management 12,700 Professionals
Contact information THAILAND: Patima Jeerapaet Managing Director
Risinee Sarikaputra Director | Research
Colliers International Bangkok Office: 17/F Ploenchit Center Klongtoey Bangkok 10110 Tel: 662 656 7000 Fax: 662 656 7111 Pattaya Office: 492/2 Thappraya Road Nongprue Banglamung Chonburi 20150 Tel: 6638 364 411 Fax: 6638 364 414
This report and the figures shown herein has been prepared by Colliers International as a guide only. Any interested party seeking to rely on the contents should undertake its own enquiries as to the accuracy of the information. Colliers International does not guarantee, warrant the accuracy or represent the information contained in this document, and excludes unequivocally all inferred and implied terms, conditions and warranties arising out of this document, as well as all liability for loss and/or damage arising therefrom, including any loss of profits, business or anticipated savings.
14 Colliers International www.colliers.co.th
w w w. c o l l i e r s . c o. t h
This report and other research materials may be found on our website at www.colliers.co.th Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. Colliers International is a worldwide affiliation of independently owned and operated companies.