Beachside holiday homes

Risinee Sarikaputra, head of research at Colliers International Thailand, said foreign investors began buying again from residential projects in Pattaya last month. Their purchases were focused on condominium units with prices between Bt10 million and Bt20 million.

Most of the buyers were expatriates working in Bangkok who wanted a vacation residence, rather than a property investment.

"Pattaya suits buyers who are looking for a vacation residence, rather than buying a property to let for rent, because the returns on investment from rent in Pattaya are lower than those in Bangkok, for units of the same size," she said.

Rent for a one-bedroom luxury condominium unit in Pattaya is between Bt50,000 and Bt70,000 per month, whereas that for a luxury unit of the same size in Bangkok is between Bt100,000 and Bt120,000 per month.

However, investors who buy now and expect to resell their unit next year may generate a return on investment of 10-15 per cent, depending on the location, she said.

Pattaya's latest buyers are from Scandinavia, the UK, the US, Russia and Australia - all of whom prefer beach locations for second or vacation homes.

The Agency for Real Estate Affairs said there were 110 new residential projects in Pattaya at the end of May. They offer a total of 13,823 units with a market value of about Bt77 billion. Of these, 47 per cent are already sold and the sales process continues for the rest.

Property firms that have launched projects in Pattaya include Raimon Land, Major Development, CP Magnolia, which developed The Chur Pattaya, and Pacific Shore, which launched The Beaches Destination resort and spa, worth about Bt10 billion.

According to a survey by Colliers International Thailand, most of the firms are still building their Pattaya projects. They slowed down the speed of construction to help them save cash while sales were slow. However, some of them have lifted their construction rate in the expectation demand for residences will soon recover, Risinee said.

"We think this is a good time to buy a residence in Pattaya because most of the property developers are offering special promotions, such as price discounts of 15-20 per cent. They are also offering free furniture and home appliances. And when investors buy now for resale next year, they may get a return on investment of more than 10 per cent," she said.

Real Estate Information Centre director-general Samma Kitsin said the Pattaya property market had faced a tough period, starting last year and including the first quarter of this year. Some buyers had rejected deals with property developers out of concern for their future earnings. Foreign buyers also faced a hard time when their earnings fell as a result of the global downturn.

Samma said that in the first quarter, most residential projects in Pattaya were offering prices discounted as much as 20 or even 35 per cent. Some developers slowed their construction processes to wait and see how the mood of customers changed.

He said demand for residences in Pattaya was beginning to recover because of attractive sales campaigns and reasonable prices. The Real Estate Information Centre believes the Pattaya property market will improve in the second half of the year, he said.