Chon Buri condo projects face delays

Condominium projects in Chon Buri may be hit by shortages of labour and construction materials despite strong demand driven by industrial estate expansion, say property experts.

Meesak Chunharuckchot, chief executive of Chon Buri-based developer Life and Living Co Ltd, said a major concern in the province's property market is that projects may be unable to complete construction as scheduled.

"Almost all residential projects in Chon Buri have good sales but their construction may be delayed," he said yesterday at a seminar on the residential situation in beachside provinces held by the Real Estate Information Center (REIC).

"Big problems are labour and construction material shortages."

In recent years, the key driver of the property market in Chon Buri and surrounding areas was the tremendous growth of industrial estates on the Eastern Seaboard, driven by relocations of factories in flooded zones and a leap in growth of the automotive industry.

According to industrial estate developer Hemaraj Land and Development Plc, investment in the auto industry in the area grew by 45% last year due to the arrival of foreign automakers.

Samma Kitsin, REIC's director-general, said the number of new condo units launched from the fourth quarter of 2011 to the third quarter of 2012 was quite large at about 20,000.

The centre's research showed that more than half of units remaining for sale in Chon Buri in the third quarter of 2012 were condo units, accounting for 56,376 of the total of 96,187.

The condo supply a year earlier was only around 36,000 units.

"This number is too large, quite an oversupply," Mr Samma said. "The longer construction period these projects take, the more problems there will be from buyers dumping units if more new projects are added to the market."

Chon Buri's condo supply was second only to Bangkok, where 124,600 units were available.

About 42,400 condo units were available in the Pattaya area.

However, only about 11,900 Chon Buri units were complete, while 32,300 were under construction and 12,100 had not started construction.

Clayton Wade, managing director of Chon Buri-based property firm Premier Homes Real Estate Co Ltd, said Chon Buri or Bangkok do not face a property crash but oversupply will make property prices go down.

Mr Meesak said the booming property market in Chon Buri will be accelerated by an expansion of an industrial estate in Rayong and the government's infrastructure investment.

"Facilities to support the property sector will be a big problem if the market is driven by new factors," he said.

About the author

Writer: Kanana Katharangsiporn
Position: Business Reporter