Condominium development in Thailand has long been concentrated overwhelmingly in Bangkok, but a growing number of developers are looking for opportunities elsewhere. Since 2011, some listed developers have made plans for condos in other provinces with good tourism or economic potential. But success has been modest at best, and some projects were even cancelled in provinces where response was low.
In four major northeastern provinces -- Nakhon Ratchasima, Khon Kaen, Udon Thani and Ubon Ratchathani -- some listed developers and local players have been testing the market over the past six years or so, though the number of new condo units is still small when compared with the Bangkok area.
Market response to condominiums in Isan has been muted, mainly because selling prices are similar to those of townhouses, and most people in the provinces would rather have a house with land.
Condominiums are popular in Bangkok because there is a wide choice of developments located near mass transit lines and stations. This appeals to a huge pool of prospective buyers for whom convenient transport to and from the workplace is a top priority. In contrast, traffic is of little concern for buyers in provincial towns and cities.
In the Northeast, Udon Thani has seen the most activity by condo developers, with higher sales than in other provinces. In addition to local purchasers, the developments have attracted some buyers from Laos. While some newer units have yet to be sold, the overall take-up rate is 94%, mainly at projects launched in 2012 and 2013.
Khon Kaen also shows potential, with some 2,050 units launched over the past five years and a take-up rate of 79%. While the rate is lower than in Udon Thani, new condo projects are still being launched in Muang district of Khon Kaen, while Udon Thani has seen no new activity recently.
Some 1,600 condo units remain available in Muang district of Nakhon Ratchasima, where the average take-up rate was 76%. Most developments in this area were launched from 2012 to 2015, and almost all were built by small local developers.
In Ubon Ratchathani, just 720 condo units have been developed, with most launched in 2013 and 2014, with a take-up rate of 55%.
These four provinces are the main economic and education centres of the Northeast, and their populations are becoming more affluent. But land is not too expensive, with a good selection of affordable detached housing and townhouses available. Consequently, condominiums are not a priority for most people.
But land prices could rise in the future, especially in Nakhon Ratchasima and Khon Kaen, where light-rail public transport lines are planned. While land prices are unlikely to rise the way they have along mass transit routes in Bangkok, developers might be interested in securing plots to offer more condos in the future.
Surachet Kongcheep is a veteran local property market expert. He can be reached at [email protected]
