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PATTAYA MARKET OVERVIEW & THE OPENING OF CB RICHARD ELLIS PATTAYA

By on Nov 15, 2007 in Property News

CB Richard Ellis, the leading international property consultant in Thailand, remains confident about the long-term prospects for the Pattaya property market and has decided to establish a full service office in Patttaya which will open on Saturday 17 November 2007.

Pattaya is Thailand’s most accessible resort destination and is also a regional centre for the Eastern Seaboard. The opening of Suvarnabhumi Airport has made Pattaya more accessible.

“Pattaya has well developed infrastructure, good hospitals, and a range of retail outlets and entertainment.  This lifestyle package makes Pattaya attractive,” according to Ms. Aliwassa Pathnadabutr, Managing Director of CB Richard Ellis Thailand.

“We believe that Thailand has a significant competitive advantage in the leisure sector which includes retirement and second homes, which is why we have opened offices in Thailand’s major resorts.  CB Richard Ellis has focussed the expansion of their business on servicing the hotel and resort, and luxury residential property markets and the Pattaya office will be the fourth CB Richard Ellis office in Thailand.”

According to the CB Richard Ellis Research & Consulting Services teams, the total condominium stock in Pattaya including Condotels was about 24,800 units at the end of 2006 and is expected to reach 27,800 units by the end of the year. Less than 10% of the total condominium stock is the luxury supply.

CB Richard Ellis is seeing more launches condominium projects in Pattaya.  The 543-unit White Sand Beach on Jomtien Beach was the latest luxury condominium launched in this resort destination. The project will comprise a luxury Mövenpick Hotel, a high-rise condominium tower housing 303 units, and ten low-rise condominium buildings having 240 units. Construction is scheduled for completion in 2010.

The other recently launched condominium project in Pattaya is The Chateau Jomtien. It is situated in the Pratumnak area, housing 317 units in four towers. The Chateau Jomtien offers 1-3 bedroom units of 78 – 199 square metres and duplex penthouses of 253 – 320 square metres with sea and city views. This exclusive condominium development is expected to be completed in 2010.

The villa market in Pattaya just started to be active in 2003 as a result of the growth in the tourism industry and the rising trend of second and retirement homes in Thailand.  There are 17 luxury villa projects, comprising 626 units, being marketed in Pattaya as of Q3 2007, and about 54% have been sold.   Most of the projects are located next to a beach or within proximity to the beach. Prices of these luxury villas ranged from 6.8 million baht to 60 million baht. More than half of all villas in Pattaya are located on Jomtien Beach.  However, as the result of increase in land prices, more villa projects are expanding to Na Jomtien and Bang Sarey to the east of Sukhumvit Road.

In the group 1 hotel sector in Pattaya charging over 2,500 baht per night, there were a total of 6,500 hotel rooms in Pattaya at the end of June 2007, increasing by 4% from the beginning of the year. However, there are only 4 hotels comprising 1,300 rooms which are truly luxury supply, charging over 5,000 baht per night. Luxury hotel rooms comprise about 3% of the total hotel stock in Pattaya. The majority of hotels in Pattaya are in the mid-range and economy categories, accounting for 70% of the total stock in Pattaya, with the room rates below 1,500 baht per night.

The residential market in Pattaya faces challenges from strict enforcement of property ownership laws. Foreigners are limited to 49% of the ownership area ratio of a condominium project. For many condominium projects, either the demand from foreign purchasers exceeds the limit or the majority of potential purchasers are foreigners. Then the challenge for developers is to sell the 51% Thai quota of a condominium. To effectively strengthen this resort market, the foreign ownership quota should be extended.

CB Richard Ellis believes that Pattaya is on the upward trend of the property cycle although the growth of the overall property market in Pattaya is less than expected, mainly due to the Foreign Business Act amendment issue.  The 9% per year average growth rate in tourist arrivals to Pattaya is a positive sign for both the hotel and residential markets. CB Richard Ellis expects to see developers launching more residential condominium and resort home projects in Pattaya and stronger interest among Thai and foreign buyers, both for owner occupation and investment. The growth in the number of hotels managed by international chains will also be positive in raising Pattaya’s image by harnessing the marketing power of these brands to promote the destination. 

“The establishment of our office in Pattaya is another important step forward for CB Richard Ellis   demonstrating our ongoing efforts to enhance our business operations in Thailand and the rollout of our comprehensive resort services. With the addition of this office in Pattaya, we believe that we will meet the business objectives and real estate needs of our clients throughout the country,” added Ms. Aliwassa.

Ms. Linda Ord has been appointed to be the General Manager, responsible for all transactions in Pattaya. She has successfully led the CB Richard Ellis Pattaya Residential Sales team since 2005 and has worked on high-end projects in Thailand for 2 years.  Prior to joining CB Richard Ellis Thailand, Ms. Ord worked for CB Richard Ellis Vietnam where she was mainly involved in residential and retail transactions.

According to Ms. Ord, the Pattaya office will provide a full real estate services covering the luxury condominium and villa, commercial, investment, and hotel sectors, including sales, leasing, research, consulting,  valuation, and property management. The new office will cover main nine areas in Patttaya; including Naklua, Pattaya City, Pratumnak, Jomtien, Na Jomtien, Bang Sarey, East Pattaya, Mabprachan, and Huay Yai, and the Eastern Seaboard.

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