Pattaya's luxury condominium market booms in Thailand
dpa German Press Agency
Published: Friday February 9, 2007

Pattaya- Thailand sold 16.6 billion baht (461 million dollars) worth of beach-front condominiums last year, of which 49 per cent were sold in Pattaya, the kingdom's oldest beach resort, a leading property developer disclosed on Friday. "Pattaya has led the way as a resort destination for condominiums," said Nigel Cornick, chief executive office for Raimon Land, a developer of several luxury condominium projects at the beach resort such as Northshore, where starting prices ranged between 5 to 7 million baht (138,900 to 194,400 dollars) per unit.

Addressing a property seminar in Pattaya, Cornick said the resort remains Thailand's top seller in the luxury condominium market because of its proximity to Bangkok and the Eastern Seaboard, Thailand's main industrial corridor, plus its attractiveness as an investment.

As a tourist destination, Pattaya is best known for its sleazy nightlife.

There are some 315 housing and condominium projects, with 40,466 rooms, currently underway in the Pattaya vicinity.

Sales have continued to be robust despite recent efforts by the Thai government to curb speculation in the sector, which is said to rampant.

"We've sold 1.4 billion baht (41 million dollars) worth of real estate in the past 3 to 4 months," Cornick said of Raimon's newest luxury condominium project in Pattaya, the North Point, which sells for up to 140,000 baht (1,400 dollars) per square metre.

But Cornick acknowleged that it was "still early days" to judge the impact of recent changes in Thai law that are likely to take some of the wind out of Pattaya's property boom.

In December the government introduced capital controls, which were later lifted on property investments. Then in January amendments to the Foreign Business Act were proposed that would make it more difficult for foreigners to invest in property using various loopholes in Thai law.

The amendments will essentially stop property investors from setting up shell Thai companies using nominee Thai shareholders to facilitate villa and condominium purchases by foreigners.

Under Thai law, foreigners are prohibited from owning land.

Under current legislation, however, foreigners can hold up to 49 per cent of condominium property. The real estate sector, especially those catering to foreigners, would like to see the government facilitate long-lease arrangements allowing for 30-year leases renewable for another 30.

"I think what you'll see happening is developers will be required to look at other structures and the other structure will be lease-holds," predicted Cornick, of the impact of the amended Foreign Business Act.

© 2006 dpa German Press Agency