The seaside town of Hua Hin remains an active condominium market for Thais who purchase second homes according to researchers at property management company Knight Frank.
Activities in Hua Hin and Cha-am are as bustling as ever, with several new condominium projects launched by leading development firms. Most buyers and guests come from Bangkok with only 25% come from overseas, including expatriates working in Bangkok, says Surasak Limpa-arayakul, the Director of the Research and Valuation Department of Knight Frank Chartered (Thailand) Co., Ltd.
The total condominium supply in Hua Hin as of the first half of 2012 was 17,349 units. This figure accounts for the units that have accumulated from 2003 to H1 2012. During the first half of 2011, there were 3,956 new condominium units added to the Hua Hin and Cha-am supply.
“Over 75% of the Hua Hin condominium buyers are Thai, especially those from affluent Bangkok-based families. There are also some expatriates and foreign retirees who bought beach condominiums. The reliability and reputation of the developer tends to be the most important factor for expatriates, while an affordable price seems to be vital for foreign retirees,” said Surasak.
He further explained that foreign buyers, unlike those in other tourist destinations such as Phuket or Samui, are mostly retirees or those with Thai spouses. They have a limited budget and prefer to buy a residence for their own use as a second home during their country’s winter season.
“As foreign ownership regulations in Thailand have become more stringent, foreigners who are looking for a residence are paying more attention to condominium units that they can buy on a freehold basis (up to 49% of the total ownership). Thus, they are likely to search for an inland condominium unit that has a lower price than a beachfront unit,” says Surasak.
The historical unit take-up during the peak year for Hua Hin condominiums has been about 1,000 to 1,200 units per annum, however, during the first half of this year, there were about 1,655 units sold. Unfortunately, with the influx of new supply, the growth in demand cannot keep up, causing the take-up rate to drop from 45% in 2011 to 44% during the first half of 2012.
Previously, condominiums in Hua Hin could be sold easily, especially those in beachfront projects and/or projects that have sea views from the units. Recently, the inland condominium in Hua Hin has garnered interest, with compact sizes and affordable unit prices.
The cumulative average growth rate (CAGR) of beachfront condominium units in south Hua Hin was at 4.2% between 2010 to H1 2012, with an average selling price of THB 138,010 per square meter. For those with limited budgets, they can select sea view condominiums in Cha-am with an average selling price of THB 92,404 per square meter; however, the price will be cheaper for units located farther from the beach.
(Source Knight Frank Thailand)