SOMLUCK SRIMALEE
THE RESIDENTIAL inventory in six beach provinces - Prachuap Khri Khan,Phetchaburi, Phuket, Songkhla, Chon Buri and Rayong - was worth Bt257.66 billion for a combined 85,200 units as of the end of last year, according to a survey by the Real Estate Information Centre (REIC) of the Government Housing Bank
The housing stock would take up to two years to absorb in the scenario that no new projects were launched during the period, said the centre.
The survey, which covers detached housing, townhouses and condominiums, found a combined stock of 44,800 units worth Bt116.3 billion in Chon Buri province; an inventory of 13,700 units worth Bt44.26 billion in Songkhla; and 9,900 units worth Bt24.3 billion in Rayong.
Smaller inventory amounts were found in Phuket, Phetchaburi and Prachuap Khiri Khan provinces.
Samma Kitsin, director-general of the REIC, said the number of residential projects launched in the beach provinces had grown strongly since 2012, especially in the Hua Hin district of Prachuap Khiri Khan and Phetchaburi's Cha-am district.
This was due to the government's plans to invest Bt81 billion for the first-phase development of a high-speed rail line from Bangkok to Hua Hin, and plans to spend Bt29.47 billion to build a double-rail track on the route.
These infrastructure plans have boosted domestic residential demand in the areas, with listed property companies and local developers deciding to expand their investment in the provinces, he said.
However, residential demand in Hua Hin showed only slight growth last year and the first half of this year, in line with the country's economic slowdown.
This resulted in slight inventory growth in Prachuap Khiri Khan province overall, with a stock of 3,700 units worth Bt17.1 billion as of the end of December.
Some 2,000 units worth Bt9.3 billion were condominiums, while the remainder were detached houses and townhouses worth Bt7.8 billion.
Meanwhile, the inventory in Phetchaburi province was 4,000 units worth Bt15.8 billion, comprising 2,900 condominium units worth Bt11.6 billion and 1,100 detached houses and townhouses worth Bt4.2 billion.
Chon Buri and Rayong are popular provinces for property developers to expand their investment, especially following the Cabinet's approval of a Bt20.2-billion budget to build a motorway from Pattaya to Map Ta Phut.
Construction of the motorway is expected to commence at the end of this year, or in the first quarter of 2016.
"The new motorway route will boost residential demand in Chon Buri and Rayong provinces from both domestic and foreign buyers working in the Eastern Seaboard, as it will speed up transportation to and from Bangkok,"said Chadchart Sittipunt, president and chief executive officer of Quality Houses.
Quality Houses has launched condominium projects in both provinces,including the Bt1-billion Point Condo Lam Chabang and the Bt1.2-billion Trust Condo in North Pattaya.
Chadchart said residential demand in Chon Buri province was more from locals than from foreigners, because of the location close to the Eastern Seaboard.
Up to 95 per cent of the developer's customers for projects in the area are locals.
According to a survey by Quality Houses, the supply of housing units in the two provinces between 2012 and 2014 was worth Bt55.19 billion, while purchase demand was Bt40.55 billion,or about 73 per cent of supply.
About 30 per cent of the buyers in Chon Buri province were foreigners, the survey found.
Chadchart said that although demand from Russians had dropped as the ruble weakened,there were more buyers from China.
Meanwhile, demand from Thais working in the Eastern Seaboard has expanded, so the company has launched residential projects in Chon Buri's Muang and Sri Racha districts, and in Pattaya.
Up to 95 per cent of the buyers at these projects were Thais, he said.
Half of the demand in Chon Buri province is for homes priced below Bt5 million, the CEO added.
Meanwhile, residential stock in the southern provinces of Phuket and Songkhla was 9,100 units worth Bt39.9 billion and 13,700 units worth Bt44.26 billion, respectively, with foreign demand - especially from Europe - falling due to economic slowdowns in many markets.
Thanan Tanpaiboon, adviser to the Phuket Real Estate Association, said newly registered homes in Phuket recorded only 3,940 units last year, while registered transfers totalled just 1,880 units - down 53 per cent from the 2013 level.
He put this down largely to the drop-off in foreign demand.
Moreover, domestic purchasing power has been dented by banks restricting the provision of mortgages among customers with high personal debt, and this has been another factor affecting demand on the resort-island over the past 18 months, said Phuket Real Estate Association president Thanusak Phundej.
He said the banks had also tightened restrictions on the provision of project loans to developers by increasing the level of presales required to get such financing from 30 per cent of a project's value to at least 50 per cent.
"This impacted developers, with less cash flow to run their business, to the extent that some had to delay project launches," he added.
"When agricultural prices fell, especially for rubber, which dropped below Bt100 per kilogram, it impacted on housing demand in Hat Yai, cutting it by more than a half since [the beginning of] last year," said Pheera Hongchayangkool, director and general manager of Hatyai Nakarin, which is 49 per cent owned by Supalai.
Local residential demand in Hat Yai is largely from buyers in a number of southern provinces, namely, Songkhla itself and Narathiwat, Pattani and Yala, said the director.