From an investors perspective properties in Chiang Mai are less attractive than at the coast or in Bangkok. The demand is far less and the market not as dynamic. But the city has seen rapid growth in recent years and some believe that its a good time to get in ahead of the rush. Properties in Chiang Mai are valued considerably lower than in Bangkok, Pattaya or on the islands, making them more affordable for the lower end investment budgets. An increasing supply of foreigner buyers and tenants helps keep prices buoyant and maintain the value of certain condo buildings, independent properties and project developments in Chiang Mai.
The fact that Chiang Mai is considered one of the most pleasant places to live in Thailand means that the foreign community is burgeoning and its having a significant effect on the prices of properties in Chiang Mai. However, the city is not really considered a desirable location for vacation homes, therefore it lacks the robust demand seen on Phuket and Samui. It certainly is not in the same league internationally and has a reputation instead as a tourist or retirement destination.
Investors interested in Chiang Mai as alternative to, say, Pattaya or Bangkok, will find few ready options of properties to snap up pre-build condos or villas with typical tropical views. On the other hand there is an over-supply in some quarters which presents some interesting opportunities to buy condos and houses for a bargain, renovate them and re-sell to newly arriving foreigners. Some investors have anecdotally claimed to have sold units through agents websites to buyers who’ve never seen the place. The price seems so attractive from abroad that they are willing to close the deal without inspection.
Other investors have done well with properties in Chiang Mai by buying up shells in less-successful condo buildings which are now under bank-ownership and lack proper marketing. After decorating they are able to sell them on, making as much as 40 per cent within a six month period. This however requires good knowledge of the buildings perceived status, as well as a Thai assistant to help negotiate, supervise and inspect the quality of the decorating work. In this respect local knowledge is imperative and outside investors will be at a disadvantage.
Chiang Mai has several condo buildings that are considered safe investments. These include Flora and Rim Ping, where units rarely change hands but command the highest rents, as well as Hillside 3 and 4 which are favoured by foreigners. Perhaps the most attractive of the new properties in Chiang Mai, is the trend-setting luxury developments of Twin Peaks and Peak Gardens, aimed at the Japanese expats. With its design geared towards Western tastes, Baan Karnkanok is low rise development (completion 2007) which has managed to sell out 49 per cent of the building to foreigners, and this indicates the city has room for more such condo developments.
Those with a company or Thai spouse, will find extra opportunity in the numerous houses and villas available. As far as the Thai real estate development industry is concerned, the trend and money is firmly set in housing projects which are hugely sought after by the emerging middle class. This is fairly typical of Chiang Mai properties. Many foreigners buy into these too, and they can serve as good investment provided the company is established and the project up-market. There is a real risk of oversupply here, due to the high profits currently involved.
On the other hand, the rush to the prestige and security of housing projects have left behind many very suitable houses which are no longer attractive to the Thai buyer but very acceptable to foreigners, particularly the numerous NGO and missionary families looking to rent. This presents good investment opportunities for those who know their way around Chiang Mais suburbs.