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Status of the Thailand Condominium Market in Resort Areas 2006
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The strength of tourism in Thailand is the driver of the property market in the major resort areas. The Four most popular resort destinations are Pattaya, Hua Hin, Phuket and Koh Samui.
Pattaya
Last year Pattaya was the number one tourist destination for visitors who stayed in 4 and 5 star hotels. 6 million visitors arrived in Pattaya in 2006 and continues to be the destination of choice in 2007. With an average annual growth rate of 10% since 2001, the area has seen an increase of tourists from China, Russia and Korea as well.
Hua Hin /Cha Am
5.5 million affluent Thais, local expats and foreign tourists visited this area making it the second most popular resort destination in Thailand. Hua Hin’s proximity to Bangkok and its heritage as a home to the Royal Family has earned it a reputation as a safe, clean, high-end resort town for families and couples alike. The area is undergoing robust development and growth.
Phuket
Ever the popular resort, Phuket has fully recovered from the tsunami and continues to grow in leaps and bounds. With a muiltitude of airlines to choose from and an ever-expanding list of direct flights from all locations, Phuket had over 4 million tourists visit last year. Big name hotels such as Raffles, Hyatt, Shangri-La, Peninsula and Four Seasons all have new projects under development and sales of villas and condos continue to be strong.
Koh Samui
Koh Samui continues to attract an eclectic mix of high-end and young travellers looking for a unique combination of laid-back fun and first-class dining and lodging. It currently has only one airline servicing the island but drew over 1 million visitors last year mostly from the UK, U.S., Germany and Australia.
2006 Condominium Market in Thai Resort Destinations
73% of the condominium market comes from Bangkok and the other 27% is from Resort Destinations. 44% of the condominium resort market is attributed to Pattaya, 38% from Phuket, 14% from Hua Hin and 4% from Samui.
In December 2006, the average price per square meter of units sold in resort areas was roughly 87,000 THB, an increase of 39%. Due to increased focus on foreign ownership of land and proposed changes in ownership structures, the demand for condominiums in resort areas is expected to jump considerably. Foreigners can own condos on a freehold basis as long as the development does not exceed 49% foreign ownership in total. Leasehold, on the other hand, has no foreign ownership restrictions and remains very popular in select resort areas. These factors are contributing to a strong demand for condominium projects throughout Thailand.
Many resort areas have fewer condominium developments compared to villa developments. This has led to a dramatic increase in planned and current construction of condominium projects. Combined with efforts to increase leasehold periods beyond the traditional 30 years and Thai banks considering new ways to extend mortgages to foreigners, the real estate market in Thailand is extremely attractive!
Average Condominium price/m2 by Resort Area (2004-2006)
For information, at print, 1 USD = 33.0 Thai Baht - 1 Euro = 44.5 Thai Baht
Sources : TAT and Raimon Land
Contact us at property@infinsolutions.com
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