According to a recent survey conducted by Knight Frank Chartered (Thailand) Co., Ltd., for the past decade, the condominium supply in Hua Hin has been mostly comprised of 2 to 3-bedroom units. However, at present, the condominium trend has shifted to 1-bedroom units with selling prices of less than THB 2 million.
Frank Khan, Head of Residential Department at Knight Frank says that most of the buyers who purchased Hua Hin condominiums use them as holiday homes, rather than for investment purposes. Recently, some buyers purchased condominiums to generate rental income; this is because there are not many hotels in Hua Hin, and thus there is a growing demand for rental condominiums for short stays from Friday to Sunday, or the long weekend.
The rental market is growing quickly as Scandinavian and Russian tourists are coming to Hua Hin and renting apartments for 3 to 6 month stays. They prefer 1 or 2 bedroom apartments with full recreational facilities such as swimming pools, beach access, and tennis courts.
The condominium supply in Hua Hin was plentiful during 2012, and Thais dominated the market, representing around 75% of the buyers. This is in sharp contrast to the Pattaya market, where the target customer groups include a variety of Thais, foreigners, and professionals who work in the industrial estates of Chonburi.
There are many shopping and recreational facilities in Hua Hin that serve visitors, including community malls such as Santorini, Cicada, The Venezia, and Plearnwan; Black Mountain Water Park; and Samphannam Floating Market.
Supply Trend
Knight Frank Thailand has accumulated data on the condominium supply in the Hua Hin region from 2003 to 2012 – this includes Cha-am, Hua Hin, Khao Takiab, Khao Tao, and inland areas.
An artist’s rendering shows the AD Resort Hua Hin.
The accumulated condominium supply of Hua Hin by the end of 2012 was about 18,102 units, increasing by 35.2% from the end of 2011. The new condominium supply has increased sharply, with approximately 4,709 units from 15 new condominium projects being launched during 2012. Of this figure, a grand total of 3,255 units were offered during the first half of 2012, whereas a total of 1,454 units entered the market during the second half of the year.
Cha-am was still the most popular location in the Hua Hin condo market, a trend that continues from the previous year. This was due to the availability of the land plots as well as the existence of several commercial developments that provide an extensive range of restaurants and retail outlets, making the area more convenient for residents.
There was a large additional supply in the Cha-am area, with about 1,696 units, or 36% of the total number of units launched, from 4 new condominium development projects entering the market in 2012. AD Resort Hua Hin was the largest project, with 1,128 units in the Cha-am area.
The emerging area in Hua Hin was found in the Inland Area, with approximately 1,424 newly launched units during 2012. The projects were developed by Sansiri, with unit selling prices of THB 1.5 to 3.5 million; however, the projects were located quite far from the beach. This was followed by the North Hua Hin and Khao Tao areas, accounting for 18% and 15% of the total units launched in 2012, respectively.
Demand Trend
The unit take-up in the Hua Hin condominium market increased in 2010, with around 1,076 units sold; in 2011, there were around 1,344 units sold. The unit take-up in 2012 was especially robust, with approximately 2,879 units sold.
The take-up rate decreased from 72% in 2010 to 45% in 2011; this was due to the condominium supply influx, with around 6,000 units launched in 2011. Knight Frank’s research indicates that the take-up rate has increased to 49%, with the total demand of around 8,906 units by the end of 2012. Statistics indicate that the historical unit take-up during the peak year of the Hua Hin condominium market was around 1,000 to 1,200 units per annum. Thus, the unit take up in 2012 was tremendously higher than the unit take-up in the peak year.
Mr. Khan added that Hua Hin condominium buyers’ profiles are divided into two target groups: Thais who account for 75% of the market; and expatriates working in Bangkok and foreign retirees, including Scandinavians, Russians, and Germans, who make up the remaining 25% of the market.
Thai buyers are a strong force in the Hua Hin condo market; this is due to the fact that Thais who live in Bangkok, especially the affluent ones, are looking for a second home or a holiday property near Bangkok. About 200 kilometres from the capital or a 2.5-hour drive, Hua Hin is a deservedly a popular destination, providing many interesting tourist attractions and activities. Also, the beach in Hua Hin is considered to be more beautiful than the beach in Pattaya.
The report by Knight Frank indicated that nowadays, the market has changed. There are many medium-income earners from Bangkok who are buying condominium units in Hua Hin for weekend stays; budget condos in Hua Hin have thus sold quite well.
Pricing Trend
Due to the convenience of South Hua Hin, the resale price of condominiums in this area recorded the highest figures, with the average price of approximately THB 137,853 per square metre, as of the end of 2012. This is an increase of 6% when compared to prices of the previous year.
The condominiums in Khao Takiab represented the second highest average selling price per square metre at around THB 120,050, a decrease of 1% from the previous year. The reason for this was that the 2012 project launches in this area offered budget condominiums, with lower prices compared to the previous year.
The average condo selling price in the North Hua Hin area occupied the third rank, at around THB 103,798 per square metre, increasing by 3% from the previous year.
The average selling price per square metre in Khao Takiab significantly decreased from the previous year to THB 74,595 per square metre, as of the end of 2012.
Outlook
The Knight Frank report forecasts that the condominium market in Hua Hin will see strong growth as SET-listed property developers and other major development firms from Bangkok launch new projects in this market next year. The target market of Hua Hin condominiums is still narrow, focusing on Thai buyers, expatriates working in Bangkok, and foreign retirees, compared to other tourist destinations such as Phuket or Pattaya, where the targets are also tourist buyers and foreign investors.
The land plots for property development in prime locations, especially in the south of Hua Hin, are becoming scarce and land prices are soaring. Thus it can be expected that the future supply of condominiums will be concentrated in Cha-am and in the Inland Area, where many plots are still available for condominium projects with prices lower than that of other locations.
Mr. Khan says developers should balance the supply and demand in the Hua Hin condominium market, as the target groups are not diversifiable. Developers should also be cautious if they continue to develop large numbers of units, risking oversupply and subsequently decreasing prices. The condominium supply in 2012 slowed down from 2011, with decreasing numbers of newly launched units; however, the number of projects in 2012 increased as developers launched many smaller projects with greater privacy features.
Note: Knight Frank LLP is a leading independent global property consultancy with 244 offices, in 43 countries, across six continents. For further information, visit www.knightfrank.com.
