Realty market in the Hua Hin area will see strong growth as developers from Bangkok launch condominium projects there in 2014, according to Knight Frank Chartered (Thailand) Co.
House buyer target is still narrow, focusing on locals, Bangkok expatriates and foreign retirees, while other tourist destinations such as Phuket and Pattaya also attract tourists and foreign investors.
Prime locations, especially in the south of Hua Hin, are becoming scarce and land prices are soaring, so the future supply of condos is expected to be concentrated in Cha-am and inland, where many plots are still available with prices lower than other locations. Condo developers should balance supply and demand, as the target groups are not diversifiable. They should also be cautious if they continue to produce many units, risking oversupply and falling prices.
The condo supply last year slowed down, with fewer new units but more projects, as developers embarked on many smaller projects with greater privacy features, executive director Frank Khan said yesterday.
In the past decade, condo supply was mostly two- or three-bedroom units, but now the trend has shifted to one-bedroom units priced under Bt2 million. Most are holiday homes rather than investment assets.
Recently, some have been bought for rental income, as there are not many hotels and there is growing demand for units for short stays from Friday to Sunday, or long weekends.
Scandinavian and Russian tourists are renting apartments for three to six months. They prefer one- or two-bedroom apartments with full recreational facilities such as swimming pools, beach access and tennis courts.
The condo supply was plentiful last year and locals were about 75% of the buyers. This is in stark contrast to Pattaya, where the target customer groups are a variety of locals, foreigners and professionals working in the industrial estates of Chon Buri.
There are many shopping and recreational facilities in Hua Hin that serve visitors, such as the Santorini, Cicada, Venezia and Plearnwan community malls, Black Mountain Water Park and Sam Phan Nam Floating Market.
Condo supply in the Hua Hin area increased by 35.2% to 18,102 units last year with 4,709 units coming from 15 projects launched that year. Of the new units, 3,255 were offered in the first half and 1,454 in the second half.
Cha-am was still the most popular location in the Hua Hin area condo market with about 1,696 units, or 36% of the total number of units launched from four projects entering the market in 2012.
The emerging area in Hua Hin was found inland, with 1,424 units launched in 2012. The projects were developed by Sansiri, with units selling for Bt1.5 million to Bt3.5 million. However, they were located quite far from the beach.