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Bangkok Post, Monday February 12, 2007

Pattaya _ New real estate projects in the resort city of Pattaya will be required to have their own water reservoirs to solve shortages during the dry season, according to Chon Buri governor Pracha Terat.

He said provincial authorities would issue an announcement in the next few months requiring developers seeking construction permits to include details of plans for water reservoirs on their sites.

"The water shortage is a big problem in Pattaya that may retard the full development of Pattaya. This problem is more severe than any government policies that are currently a concern among foreigners because water is a necessity in any community," he said.

Mr Pracha urged not only real estate developers but also Pattaya residents to manage their water supplies better, especially storing rain during the six-month rainy season to use in the dry season.

He made the comments on Friday at a real estate seminar entitled: "Is the Boom Over in Pattaya?". The event attracted high interest with 700 participants, more than half of them foreigners.

The pending amendments to the Foreign Business Act have caused concern among foreigners, as the ban on using local nominees to acquire land and property will be enforced very strictly.

A more pressing concern, though, is the growing water shortage in eastern Thailand, which has the potential to affect developments of all types, including industry in Chon Buri and Rayong provinces.

Supap Wade, the president and founder of the Eastern Brokers' Association, said that despite various concerns, real estate in Pattaya had been booming, with prices in some areas tripling from 2000 to 2006.

"In 1994, I found only six to eight real estate firms in Pattaya, but three years after that, the number totalled one hundred firms," she said.

Housing, she said, was now available in all price ranges, with single houses priced anywhere between two million and 120 million baht a unit, and condominium units between 40,000 and 150,000 baht per square metre.

"But the boom seemed to slow down after the coup on Sept 19, the capital control announcement [on Dec 18] and the Foreign Business Act (FBA) amendments. If the government does not issue any stimulus measures, the Pattaya boom may be over," said Ms Supap.

Kitti Patpongpibul, president of the Housing Finance Association, said the downward trend in interest rates this year would help boost the real estate market. Pattaya would have the most potential to recover due to its high purchasing power.

"A one percentage point decrease in interest rates would increase purchasing power by 10%," he said.

Sophon Pornchokchai, managing director of the Agency for Real Estate Affairs, said the company's survey found 315 residential projects with a total of 40,466 units currently offered for sale in Chon Buri and Rayong. They are worth a combined 108.12 billion baht, ranked second only after Greater Bangkok. About 60% were booked.

In the Pattaya-Bang Lamung area, there were 110 projects with 13,707 units worth around 65 billion baht. About half are sold. Fifty-six percent were condominiums and 35% were single houses. The largest portion of units are priced between three million and five million baht each.

Mr Sophon said the number of hotel, bungalow and guesthouse rooms in eastern Thailand accounted for 15% of total rooms in the country, following Bangkok which had 26%. The region has 51,520 rooms, second to Greater Bangkok. Among single provinces outside Bangkok, Chon Buri has the highest number of 36,306 rooms, ahead of Phuket with 31,351.

Foreign participants at the seminar raised their concerns over the nominee issue and questioned how the government would inspect nominee firms, when the law would be enforced and what the punishment would be.

One foreigner commented that the FBA amendments made foreigners feel like they were criminals despite the fact that they paid tax legally and had done nothing wrong. He said they legally bought residential units in consultation with brokers and lawyers.

A British retiree said that Thais were discriminating against foreigners and the FBA seemed to be a racist practice.

"I came to Thailand with sincerity and want to spend the rest of my life here. My house was bought in the name of my Thai wife. This law makes foreigners feel like the enemy," he said.

However, other participants said that if any foreigner had already complied with the law, they should not have any problems.

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