The price of land in Chiang Mai has risen following a residential-project boom in the northern province, according to research by Collier International (Thailand).
The research shows that Chiang Mai’s condominium market is booming again after more than a decade of stagnation.
The city, which is the main business and educational centre for northern Thailand, was a popular location for condominium development in the 1980s and 90s, but that growth ground to a halt as a result of the 1997 financial crisis.
After the crisis, from 1997 until 2012, only around 3,540 units were added to the market, partly because most Thais prefer living on landed developments.
However, more than 1,640 units were completed and registered at the Land Department during the first five months of this year.
As of end-May, there were about 18,640 units in the market, according to statistics from the Land Department – and that represents the highest number for 17 years.
Moreover, these new units have been sold at prices that are around 11 per cent higher than during the same period last year.
According to the Land Department, more than 6,000 of the units in Chiang Mai have been launched in the last two years, and the average take-up rate in the first five months of the year was about 72 per cent.
Because land has been available at a reasonable price in and around Chiang Mai, and because Thais tend to prefer to live in landed developments, condominiums have traditionally not been the most popular form of development in the city.
However, Chiang Mai province is home to a large number of universities with more than 100,000 students in total, for whom buying a condominium is often more attractive than renting an apartment, Collier International said in its research.
In addition, Chiang Mai’s economy has enjoyed sustained growth over the last decade, and its close proximity to neighbouring countries means this is likely to continue.
Over the last few years, a large number of new shopping malls and other retail developments have been built, and there are government plans for several large infrastructure projects that would directly benefit the city.
These include a second airport, a high-speed railway from Bangkok to Chiang Mai, and a motorway between Chiang Mai and Chiang Rai.
Although condominiums have not been buyers’ first choice because there is still a lot of land available in Chiang Mai, since the government announced the development of a high-speed rail link from Bangkok to Chiang Mai a few years ago, many condo developers have launched projects in provinces along the development lines, including Chiang Mai.
Of the 2,700 condo units that were available for sale in May, some 850 were in the city area. Nearly 62 per cent of these were launched between 2011 and May 2013.
There were around 1,860 units available for sale in the outer-city area, with more than 78 per cent of them launched in the same period.
The most popular location for condominium development in Chiang Mai is along Khan Klong Chonlapathan Road, in the northwest of the city.
During the past one to two years, the Chiang Mai-Lampang Road has become a new residential area. This is due to many local developers launching condominium and housing projects in this area, said Collier International.
One-bedroom units make up the majority of condominiums in Chiang Mai, the same as in other locations in Thailand.
One-bedroom units in Chiang Mai range from around 24 to 132 square metres, with an average size of about 38 square metres. Most buyers in the area are locals and young people working or studying in Chiang Mai.
The biggest target group for condo projects in Chiang Mai is students or young adults working there who prefer to live in a one-bedroom unit of their own rather than leasing an apartment.