Demand in Hua Hin begins to climb

Hua Hin property

Hua Hin property

The property market at Hua Hin is showing significant signs of recovery, especially the rental housing market, property experts say.

The number of new residential projects launched at Hua Hin has fallen from 1,061 units in 2007 and 1,001 units last year to only 190 units in this year. However, demand for project homes has recovered in the third quarter of this year from what appears to have been the bottom of the slump in the first six months of the year.

Early recovery reveals a changed market that is more focused on rentals

The managing director of property agency Knight Frank Charter (Thailand), Phanom Kanjanathiemthao, said rising demand in the third quarter had been confirmed by most of the residential projects at Hua Hin for which the agency worked as a marketing manager. Compared with 2008 and the first half of this year, sales are rising.

He said the property market at Hua Hin had been heavily hit by the global financial crisis because foreign buyers had suspended their plans to buy second homes. Sales from residential projects, both resort-style and condominiums, started falling when the crisis began in 2008 and the tumble continued into the second half of this year.

However, prices for residences and land in Hua Hin have remained stable over the period of collapsing demand.

Phanom said that from the middle of 2007 until now, residential and land prices in many countries, such as United Kingdom, Hong Kong, Singapore, the United States and others, had fallen by 20 to 30 per cent because of the economic crisis. However, prices for homes and land in Thailand have remained stable, and despite the downturn, demand for new homes has continued to support supply.

While demand for residential-project homes in Hua Hin is showing signs of recovery, most of the demand is focused on the area close to the beach, rather than further inland. This differs from two years ago, when there was strong demand for all categories of residences and at all locations, Phanom said.

Plus Property’s assistant managing director Somsakul Limsuttaphan said the property market in Hua Hin for foreign investors had changed from a trade market to a rental one. Most foreign visitors who decide to stay in Hua Hin are now asking for long-term rental, rather than buying or signing a long-lease contract.

“Ninety per cent of foreign customers are now willing to rent, rather than buy,” she said.

Condominium units for rent in Hua Hin range in price between Bt35,000 and Bt70,000 per month. The most popular size is two bedrooms, with floor space between 70 and 120 square metres. Following these are one-bedroom units between 50 and 60 square metres in size and costing between Bt25,000 and Bt30,000 per month.

Most foreign customers sign rental contracts lasting between six months and 12 months, and this is less time than they would have spent in Thailand before the country’s political uncertainty began, said Hua Hin Thai Property’s managing and sales director Vutthikorn Sathan-art.

He said the foreign rental market in Hua Hin had continued to grow, but tenants’ time in the country had fallen from more than one year to less than one year because most foreigners were concerned about Thailand’s political problems.

“Foreign buyers’ demand for residences in Hua Hin has also changed from the early-retirement market to foreigners who are married to Thais,” he said.

As a consequence, the most popular residences are no longer luxury units with prices of more than Bt20 million, but homes priced between Bt5 million and Bt10 million.

Vutthikorn said demand from local buyers had also changed. They no longer want homes priced between Bt5 million and Bt10 million, but are looking to pay between Bt3 million and Bt5 million for a residence.

The prime location for property developers in Hua Hin is between Sois 88 and 102, he said.

SOURCE: The Nation

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