The average condominium price in Chiang Mai is rising despite the many new units launched in the past 18 months and a lower take-up rate, says the property consultant Colliers International Thailand.
Senior research manager Surachet Kongcheep said the average condo price in Chiang Mai in the second half of this year and beyond will probably be 5-10% higher.
Starting prices for some new condominium projects scheduled to be launched later this year are already more than 80,000 baht a square metre.
The average price of a condo unit launched in the first five months of 2013 was 62,790 baht per sq m, up by 11% from last year.
The average selling price in the inner city is 14% higher than in the outer city, and most of the projects launched in this area this year are located in the inner city, with an average price of 65,000 baht per sq m.
Most of the higher-priced projects are located on Nimmanahaemin, Chang Klan and Charoen Prathet roads, not far from the Old Town.
Chiang Mai, the main business and education centre for northern Thailand, was a popular location for condominium development in the 1980s and 1990s, but that growth ground to a halt in the wake of the 1997 financial crisis.
However, developers have recently started building more condominiums there again.
From 1997-2012, only 3,540 condo units entered the market due partly to Thais preferring landed projects.
But more than 1,640 units were completed and registered at the Lands Department in the first five months of this year.
Department data showed 18,640 units available in this market as of this past May.
Mr Surachet said the number of newly completed units this year is the highest in 17 years.
More than 6,000 units were launched from 2011-12 and 1,840 in the first five months of this year.
A total of 4,260 units or 54% of units launched from 2011 to May 2013 were located in the outer city and nearly 3,600 in the inner city.
The most popular location for condominium development in Chiang Mai is along Khan Khlong Chonlaprathan Road, in the northwestern part of the city.
The Chiang Mai-Lampang Highway has become another popular new residential area over the past couple of years, said Mr Surachet.
The average take-up rates in both areas are similar at about 72% even though 1,960 units of the units available in those areas were launched in 2011.
This is still lower than last year due to the many units being launched in the second half of 2012 and first five months of 2013.
The average take-up rate is 80% in the inner city area and 62% in the outer city.
Some condominium projects launched in 2012 by listed developers sold out quickly after the official launch.
The average price this year is 35-75% higher than in 2012, depending on location, developer and project concept.
Many new condominium and other housing projects by local and listed developers have been launched over the past three years, sharply boosting residential supply in Chiang Mai, particularly in Muang district.
Mr Surachet said big-name and new retail developers alike are stepping into the Chiang Mai market with several categories and sizes.
More than 10 retail centres with total retail space of 250,000 sq m are under construction and will be completed this year.