Research by property firm Colliers International – Thailand has concluded that the supply of condominium units in the resort area of Pattaya rose 12% between 2009 and last year.
The number equates to over 4,700 units. The report states that in 2010 in excess of 3,420 were launched into the marketplace with analysis concluding stability between supply and demand within the sector.
Key areas for developments were highlighted as Wong Amat, Pattaya City, Pattaya Nua, Klang and Pratumnak.
Despite Phuket's broad market flattening, the Pattaya condo market which had 44,500 units at the end of the year remains popular with both Thai and foreign buyers.
Hong Kong's property watchdog Estate Agents Authority has issued new guidelines that brokers and agencies must obtain developers consent for any promotional materials issued.
A high profile incident early in the year provoked the issue over what was termed "rubbish flats". Purchasers created a series of mass complaints over unfinished units and the project filled with garbage.
The developer was forced to offer refunds to angry buyer as the local media jumped on the bandwagon.
Strong penalties have been imposed which ranges from mandated re-training to revocation of brokerage licenses.
Somehow Pretty Woman Julia Roberts has unwittingly managed to ignite a domino inspired pilgrimage of high-end cultural and self-awakening tourism into Bali from long haul Western markets.
Talking to my driver Ketut during a recent soiree around the island conducting research on the property market, he is able to list off locations in Uluwatu and Ubud that appeared in movie. He can't help but ooze enthusiasm about JUU-LEE-AHH and how it has picked up his business.
While I am usually immersed in all things real estate and tourism in Phuket, traveling to overseas competitor's often gives perspective and a quick pulse check on how Thailand is measuring up in Asia's great development race.
Certainly Bali has been caught up in a condo hotel craze that makes Justin Bieber or Lady Gaga pale in comparison. Currently there are between 4,000-5,000 units on the market and monthly take up rate in new projects is well into recurring double digit numbers.
With many pricing points below USD100,000 these formula driven products often have familiar brand names including Outrigger, Best Western and even Thailand's own Anantara , who are managing two projects.
One project we visited the Rich Prada located within the Dreamland mixed-use development was hosting an open house. Busloads of prospective buyers were eagerly signing reservations and snapping up units, which offered hotel management, and views over a world-class golf course.
Over 80 units were sold within the day in the over 900 unit mega offering and fatigue was setting in for the salespeople when yet another motor coach arrived and potential Indonesian buyers from Jakarta filled up the mock up unit.
Of course not every development is like this but viewing the key difference between resort real estate in Phuket, which remains, geared to a shrinking foreign market and Bali is the strong local sector.
In many cases individuals are purchasing multiple units and even some banks or financial institutions are taking on completed units for recurring rental yields. What is ultimately driving the market remains a 36-month tourism surge and strong local economy.
Winding back the clock to the Asian contagion in the 90's and then those nasty riots in Jakarta was the start of a build up of land banks by wealthy Indonesian's over the last decade. Bali's perceived less volatile ethnic climate was considered an exercise in diversification of assets.
Traveling up to the luxury villa market which was pioneered on a similar timeframe to Phuket most of the new offerings in the USD1 million and up are again hospitality led residential.
Branding is key and familiar names include W, Banyan Tree, St Regis and Bvlgari.
While pricing points in general remain 20-30% lower than Phuket, there is considerably more sales activity last year and in the first quarter of the year then our Thailand home base.
Again the underlying story remains domestic buyers and certain markets such as Japan, which see little activity in the Kingdom.
Rolling over to the secondary market and reflecting on where the how the two destinations compare in their development cycles important.
Clearly Phuket, which has dramatically shifted into a secondary centric clearinghouse given its limited penetration in the domestic market, while Bali has better diversification for the moment. The latter has resale's in the highway ahead versus the rear view mirror.
Land sales are also seeing strong movement from both Indonesian and overseas institutional purchases with appreciation and demand going skyward.
There does remain the dark side of developer off plan defaults, sagging transportation infrastructure, clogged highways, and trash disposal issue and water shortage along with mounting crime.
While a high power public struggle between islands governor and seven semi-autonomous regencies is creating chaotic overdevelopment and a limited ability to implement building regulations and zoning.
One of the most prolific cases is the possible enforcement of a 5 km none commercial zoning around the Uluwatu temple. A number of luxury hotel and residential projects have been caught up in the crosshairs.
In this aspect there remains a remarkable similarity between Bali and Phuket in terms of the control of centralized legislation and approvals and local inconsistent interpretation.
While the airport redevelopment is targeted for completion in 2013 for APEC and better connections to areas such as Nusa Dua, getting to and fro around the island has drawn heavy criticism internationally in recent articles in Time magazine and the Wall Street Journal.
As to the journey ahead, both of our competing island's are at different points in their journey yet striking resemblances are around every corner. For the moment property in Bali has the red-hot hand and who can begrudge them after the bombing in 2002 and 2005 drove tourism to its knees.
One has to worry though on what will happen to all those keen investment and lifestyle buyers once guaranteed returns roll off and hotel supply and demand switch places. But as always-good locations, and strong properties will prosper while those who simply tried to cash in on a trend will wilt.
For now Julia and company perhaps need to look for a sequel on the island of the fire spitting property gods – could I suggest Eat Pray and Sell as the suitable mantra of the moment.
Readers continue to write into the site asking for an update on the status of the former Shangri-La mixed use resort project in Bangtao.
Currently as those in the area can see part of the project which stalled during the global financial crises a few years ago has been put up for sale though CBRE Thailand.
On offer is 70 rai with 160 meter beach frontage of the 139 rai original site.
The owners who are the listed Indonesian firm PT Jakarta Setiabudi International Tbk. (JSI) reportedly have no plans on developing the property in the near future.
As Indonesia which is Southeast Asia'a largest economy is surging ahead the group who own three Hyatt properties and 4 run by international chain ACCOR as busy on the domestic front.
Certainly the parcel of land remains one of the most strategic hotel development sites and remains attractive given its proximity to destination resort Laguna Phuket.
Further up the road in Layan, Japanese firm Kajima are working on multi-million dollar ocean view villas which could enter the market within this year.
A new upscale integrated residential project called The Odyssey will rise on the doorstep of Laguna Phuket in Cherngtalay.
Located on 57 rai which transacted in March of this year, the site is where the former Explorer development was located. Back of the project is the team from the La Colline estate in Layan.
Leading Thai design house A49 are engaged for what is being hailed as a unique offering of lush tropical gardens, a reforestation of the current denuded site and creation of waterways, and lagoons.
With a Q3 launch planned, included are 260 luxury apartments with 2, 3 and 4 bedroom configurations. Building heights will be 23 meters (7 stories) with swimming pools on the top of each structure.
Unit areas range from 140 square meters up to 325 square meter for the 44 penthouses with their own plunge pools.
Recreational facilities include three tennis courts, squash courts and a large sports center.
A single story high end commercial community mall is targeting residents with it's 171 meters of road frontage. Retail will include restaurants, boutiques and an international quality supermarket.
Viewing the master plan the creation of extensive parks, and green areas which will include solar panels, a recycled water treatment plant support obtaining a LEED green certification.
Talk about life in the fast lane, a new 27 story private residence in Mumbai is turning heads around the globe.
Designed by leading US based architects Perkins + Will the owner is India's richest man Reliance Industries Mukesh Ambani.
Highlighting life at the very top are three helipads, numerous swimming pools located indoor and out. Additionally there are 160 parking slots and nine elevators.
Valued at USD1 billon the glittering home is named Antilia after the mythical island.
There is little chance of being left 'home alone' is this mega residence.
For those of you who missed last Friday's Greater Phuket AMCHAM Resort Market Update, we are attaching a link so you can download the presentations.
We had expert David Simister (CBRE) Greater Phuket, Antony Picon (Colliers International) – Samui/Pattaya, Duangjai Kraus (Engel and Voelkers (Hua Hin) and Andrew Langdon (JLL Hotels) – Resort Transactions.
The information gives a great sense of where the market's are currently. The link is to the AMCHAM website and downloads of the presentation just need to be clicked.
To download <link>http://www.amchamthailand.com/ACCT/asp/reports.asp?SponsorID=654&DocCatID=55&OrderBy=DocDt&Available=All*CLICK</link>
One of the island's largest property developers Laguna Phuket has started pricing properties in US dollars in order to address potential buyer concerns over currency fluctuations.
Currency risk over the past 36 months has sidelined numerous purchasers which can be traced back to then slide of the UK pound and Euro. At the same time the Thai baht has continued to appreciate at the expense of the USD.
Laguna has priced all units in the overseas currency with the exception of the Lofts which has a low pricing point starting from THB8.9 million.
Flip flops on currency remain a significant business issue in Phuket which can be traced back to the 1997 Asian economic contagion which saw hotels flee to quoting room rates in dollars. Going into the next decade the perceived safe haven vanished and as the region rebounded the shift went back to Thai baht rates.
For island property many significant estates substantial pools of completed unsold inventory which creates balance sheet headaches. Cash flow looks to be a primary motivating factor in the new marketplace.
Local upscale property firm Tawan Property continues to spread their business model into growth sectors.
A recently announced partnership between affiliate Tawan Cruises and Sunseeker for the management of the latter's fleet of 18 boats is an example of shifting business paradigms.
Yacht management continues to be a growing segment given the expansion of the marine business based in Phang Nga Bay.
Nearby Krabi currently has two significant marina projects in the works.
Another Tawan initiative was the start of up tourist friendly high speed rigid-inflatable boats (RIBS) for spills and thrills into the scenic East Coast and nearby islands from Ao Po Grand Marina.
