Despite ample supply, Habitat Group is continuing development of condos for investment in Pattaya, planning to launch two new projects in the second half to tap interested buyers.
Chief executive Chanin Vanijwongse said villa and condo projects in Pattaya with hotel management and rental yield guarantees have become more popular among developers since last year because the model offers convenience for buyers.
"In tourist destinations, renting out a condo unit is cumbersome for the unit owner to seek tenants and take care of the unit," Mr Chanin said.
In the first half of 2019, new supply launched in Pattaya slowed as new lending curbs, the political situation and the rising value of the baht affected market sentiment.
Chinese developers continued launching new condo projects but shifted from residential projects to projects for investment with branded hotel management and rental yield guarantees.
Mr Chanin said Pattaya's property market will recover in the second half because of the booming tourism sector and recovery in economic sentiment after the formation of the new government.
According to Phoenix Property Development and Consultancy, new condo supply being launched in 2019 will total 5,000 units, down from 12,942 units in 2018.
During 1990-2018, the cumulative number of completed condos totalled 88,267 units. Of this amount, 5% or about 4,400 units remain unsold.
During 2010-18, the number of condo units newly launched totalled 91,174 units. More than a third were in Jomtien, followed by Phra Tamnak with 22%, Na Jomtien and Pattaya with 18% each, and Wong Amat with 7%.
The average sales rate was 85%, with the highest rates in Pattaya and Phra Tamnak at 88% each. Wong Amat saw a sales rate of 87%, while Na Jomtien and Jomtien had sales rates of 83% and 81%, respectively.
Despite plenty of unsold supply in Pattaya, future Eastern Economic Corridor (EEC) development with a total investment of 1.5 trillion baht will spur demand from tourists and business people over the next few years, Mr Chanin said.
Habitat will launch two new condo projects in Pattaya, comprising a high-rise mixed-use project and a low-rise condo, Ramada by Wyndham Mira North Pattaya, worth 1.5 billion baht.
Launching next weekend, the low-rise condo will occupy a three-rai site in northern Pattaya with two eight-storey towers and a total of 339 units sized at 29-55 square metres and priced at 140,000 baht per sq m on average or from 3.9 million baht a unit.
All units will be fully furnished and offer a rental yield guarantee of 6% a year for the first three years and profit-sharing from the fourth year for 70% given to unit owners. They will also get a free stay of 14 days a year.
"We are on the right track since our establishment in 2012, as our seven projects in Pattaya are all property for investment," Mr Chanin said. "This business model will continue to be robust in major tourist destinations like Pattaya, due to strong growth in tourist arrivals."
Compared with Bangkok, where land prices are 2-3 million baht per square wah, Pattaya is more attractive to develop property for investment because no-beach land prices are lower than 300,000 baht and seaside plots are less than 400,000 baht.