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Published on December 7, 2007

The property market in Chiang Mai is enjoying strong growth, with developers planning to spend up to Bt10 billion by the end of next year on residential projects, hotels and resorts, reports a recent survey by The Nation.

Prominent among the investors is a company called Pakporn, which is a joint venture between the local Koolpuntville Group and Singapore Residences, a subsidiary of UK-based First Oriental Investment. Pakporn will spend Bt3.3 billion next year to build a luxury hotel and resort in Chiang Mai with 100-140 rooms.

The Koolpuntville Group, which is owned by the Trakarnkoolpunt family, is also planning to launch a single-detached-housing project worth Bt500 million in Chiang Mai province next year.

Meanwhile, Veranda Resort and Spa, which owns a boutique hotel in Hua Hin, spent Bt350 million on a similar property in Chiang Mai last year called The High Resort. It is now planning to spend Bt100 million to develop a single-detached-housing project in the northern city next year.

Monphyaporm, the company that operates the Chiang Mai Highland Golf and Spa Resort, has launched a Bt4-billion residential project that includes both a condominium and single detached houses.

And a survey by Diethelm Travel (Thailand) shows seven new hotels and resorts worth nearly Bt5 billion will open in Chiang Mai by the end of next year.

Koolpuntville Group president Sompak Trakarnkoolpunt says demand for residential projects in Chiang Mai has shown strong growth following completion of major infrastructure projects in the province.

Most home-buyers are locals rather than foreigners, with more than half of them buy a residence as a second home for vacations or retirement.

"Half of our home-buyers move their families to live in Chiang Mai after their retirement, while half of the foreigner buyers want a house as a vacation home. Some of them buy houses in Chiang Mai to generate rental fees, which offer a return on investment of up to 6 per cent a year," Sompak says.

Veranda Resort and Spa president Verawat Ongvasith says demand for both luxury hotels and single detached houses in Chiang Mai has grown strongly since foreign tourists from Europe, the Middle East and Southeast Asia began visiting the northern capital.

After opening The High Resort, the company has had an occupancy rate of nearly 50 per cent and expects this to rise to 70 per cent next year.

Monphyaporm managing director Woranon Samakoses says demand for residences in Chiang Mai is strong, especially from foreigners who want to buy a second or a retirement home in the area.

The Chiang Mai Highlands Golf and Spa Resort is the company's first residential project, offering both single detached houses and condominium units. Earlier, Woranon's family built and managed the golf course that gave the project its name, as well as Muang Kaew Golf Course in Bangkok.

"We decided to launch the residential project after our golfers from Japan, South Korea and Europe asked us why we did not have a residential project for those among them who wanted to buy a second home in Chiang Mai. So we decided to launch the residential project to meet customer demand," he says.

Half of the project's customers will be foreigners who are prepared to buy on the basis of a 30-year lease with right of renewal. The rest will be locals wanting a vacation home.

Chiang Mai's property market has experienced strong growth following major infrastructure projects in the province, including highways and linking roads to make for easier travelling.

Koolpuntville's Sompak says Chiang Mai town is now the centre of Thailand's northern region. It has a modern lifestyle that matches easily with the traditional Lanna lifestyle, and many property firms have been drawn to the province.

The Koolpuntville Group was the first property developer to expand its residential projects in Chiang Mai, followed by Land and Houses and others.

Several international hotel chains are also operating luxury hotels in Chiang Mai, including Marriott, Grand Hyatt and Sheraton.

"We believe Chiang Mai has potential growth, because the province is the gateway to the North of Thailand," Sompak says.

The website of the Chiang Mai Provincial Administration Organisation says 3.9 million tourists visited the province in the first nine months of 2005. Of those, 2.16 million were local travellers and the rest foreigners.

Somluck Srimalee

The Nation

Chiang Mai