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Foreign, local buyers hike residential prices

August 26, 2011

The property market at popular beach destinations is recovering, with the return of foreign buyers from Europe and Asia, according to property experts.

Major Development’s president and chief executive Suriyon Poolvoralaks, whose firm is developing residential projects in Bangkok, Pattaya and Hua Hin, said demand for residences at Pattaya and Hua Hin – from both domestic and foreign buyers – was rising, compared with last year. This was particularly true for the market in Pattaya.

He said half of total demand for homes in Pattaya was coming from European and Asian buyers. They were buying residences to use as second homes, or were investing in properties to be opened for rent, generating returns on investment of nearly 10 per cent.

Highest rental demand is for one-bedroom type condominium units with floor space of about 50 square metres, which attract rent of about Bt35,000 a month.

At Hua Hin, about 80 per cent of demand for new homes is coming from local buyers.

LPN Development plans to launch a second project at Pattaya’s Jomtien Beach after a project launched in the first half of this year sold out, managing director Opas Sripayak said.

“Demand to buy residences at Pattaya is coming from both local and foreign buyers, but we are focusing on domestic buyers who are looking for homes priced lower than Bt2 million,” he said.

The managing director of Phuket property developer Erawana, Piya Sosothikul, said foreign investors from Europe and Asia had returned to the Phuket market and were especially interested in condominium units located close to beaches.

The company’s 10 residential projects in Phuket have successfully sold out, helping to drive residential prices in Phuket upwards by 5 to 10 per cent, compared with last year.

Most people buying residences in Phuket want to establish a second home or vacation home. The most popular sizes are one- and two-bedroom units with prices averaging Bt10 million apiece.

Research by real-estate services firm CB Richard Ellis Thailand has shown a significant rise of 20 to 25 per cent in prices for residences at Phuket during the first half of this year, compared with the end of 2010.

The company also sees a positive outlook for the villa market in Phuket. Recent sales show an increased appetite among foreign buyers for luxury villas and demand for entry-level villas continues to be strong. Based on an increase in the number of new enquiries, CB Richard Ellis believes Asian buyers will become more dominant, but it expects continued demand from Europeans and Russians.

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