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Think of Living: 

Leading property developer Raimon Land has presented its latest assessment of the country’s two most active condominium markets, Bangkok and Pattaya, in the 12th edition of its annual research publication Condominium Focus Thailand. In addition to a comprehensive quantitative assessment of the current state of these markets, the report offers insider perspectives from a leading developer on real versus speculative demand in the condominium sector, which segments may have been underserved during the sector’s rapid expansion in recent years, and expectations for the evolution of the sector going forward.

Key insights from Raimon Land’s Condominium Focus Thailand include:

In Bangkok, condominium demand remains strong; however, with developers in recent years rushing to deliver one-bedroom units along mass transit lines, other product types have been left potentially undersupplied. In particular Raimon Land has observed a strong reduction in vacant supply of larger, family-size units in recent months. Going forward this may mean a rise in the number of larger or alternative unit configurations.

In Pattaya, luxury beachfront projects are no longer the exclusive attraction in the market, as new downtown developments by renowned Bangkok developers are launched in Central and South Pattaya, emphasizing the urban lifestyle and proximity to other amenities. 

Bangkok: Demand remains high for larger units in prime areas, although development in midtown areas will continue to outpace downtown if lending environment remains healthy 

Raimon Land’s Condominium Focus indicates that throughout the past 12 months, a total of 30 projects comprising 14,059 units were completed, most of which were one-bedroom units in midtown areas. Over the next 2 to 3 years, more than 24,000 units are expected to be completed in these midtown areas, such as Rama 9, Ratchada, Lat Phrao, Paholyothin, and the Silom and Sukhumvit BTS Line Extensions.  In downtown areas, 11,500 units are expected to be completed. 
Pricing continues to rise with 60% of new launches now asking prices above 100,000 baht per square metre and 5% asking above the 200,000 baht per square metre mark. Take-up rates are healthy across all segments, selling out 74% of new launched units on average. The price increase, however, is putting pressure on rental yields, which are ranging from 4 to 7% for new completed projects. 

“At the moment we clearly see two parallel trends in the Bangkok market,” said Mr Simon Dervillé, Raimon Land Deputy Vice President for Business Development. “In downtown areas, we still see high potential for projects in the high-end luxury segment, where demand for large-size units remains strong from both local and foreign buyers. And in midtown areas, we will continue to see more projects provided that banks continue to support both developers and homebuyers, which they have done a good job of so far.”

According to Mr. Dervillé, “high-end luxury developers, like Raimon Land, are less sensitive to changing conditions for the financing of projects, as they usually require higher down payments from their customers, and many of the customers do not rely on bank financing.” 
Pattaya: Condominium market evolving with entrance of Bangkok developers, more demand for mid-range projects in urban areas, and new sources of foreign demand

In Pattaya, beachfront projects continue to attract customers in the high-end segment, but supply is increasingly limited by the lack of available land. Developers are responding to the growing demand from Thai buyers for getaway properties. A total of 13,152 units were completed within the past 12 months, with an impressive take-up rate of 87%. The majority of those units were in projects located in Central and South Pattaya.

With 9.2 million visitors expected in 2013, tourism remains an important driver of Pattaya’s property market, with increased visitor arrivals and customers from Russia, Japan, and China. Unlike previous years, when foreign buyers were primarily looking for larger units, recent condominium buyers from these countries have been more interested in vacation homes, priced below 5 million baht, where they stay for shorter periods.

Market-wide in Pattaya, the average selling price is now at 71,357 baht per square metre, an increase of 21.2% year-on-year. This is due to the escalating cost of land, which has typically leddevelopers to opt for high-rise over low-rise developments. Within the next three years, nearly 25,000 units are expected to be completed in Pattaya, a large percentage of which will be one-bedroom units measuring less than 40 square metres. “My concern is that today only 48% of the new launched units have actually been sold,” says Mr Dervillé. “The good thing is that the demand is there, the challenge is that there are too many projects in the pipeline.”

Developers in Bangkok have taken note of the evolving market opportunities in Pattaya and are now establishing a presence in the city. This trend may limit the occurrences of projects developed by smaller players that experience financial problems and put on hold indefinitely, which has happened in Pattaya in the past.

According to Mr Dervillé: “Lately, we have seen a situation in Pattaya where there are many players, too many projects being developed, and not enough construction companies to build them. With the arrival of well-established developers from Bangkok, we will see better quality projects and hope the market will consolidate. There is great potential for the Pattaya real estate market but it needs to be regulated.” 
Condominium Focus Thailand is a research publication aimed at providing homebuyers, investors, and industry observers with an accurate picture of the supply, completions, off-plan sales, and transfers in the Bangkok and Pattaya condominium markets. In addition to these quantitative analyses, the publication also serves its readers by reviewing the global and domestic economic and property industry conditions and addressing contemporary issues in the market. In this 12th edition, the publication additionally reviews the impact of the new Bangkok city plan and real estate investment trust (REIT) structure in Thailand.
Mr. Simon Derville, Deputy Vice President - Business Development
Simon has a Master's Degree in Business Administration, with a specialization in Information Systems, from the University of Caen in France. Shortly after starting his career in London, Simon moved to Thailand and embarked on a Master's in Finance from Thammasat University in Bangkok.

He joined Raimon Land in 2003 as Research Manager and is now Deputy Vice President, Business Development.

The results of Raimon Land’s research has been used and quoted by some of Thailand’s most widely read business newspapers and real estate magazines.
Think of living, Luxury Living, Raimond Land, Bangkok, Pattaya, Project, Condominium, Focus Thailand,
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