By Andrew Batt:
Bangkok residents seeking holiday homes are driving a surge in demand for properties in Hua Hin, Cha-am and Pranburi.
New research from Colliers International revealed that the property markets in Hua Hin, Cha-am and Pranburi continue to grow, fuelled mainly by people from Bangkok looking for second homes or weekend condominiums. Cha-am is increasingly a focus for developers, partly because it is perceived to be quieter and more convenient for Bangkok residents than Hua Hin, and partly due to the rising prices and limited availability of land near the beaches in Hua Hin.
More than 3,560 condominium units had been built in Cha-am by the end of last year, and more are in the pipeline. Hua Hin, on the other hand, is still considered the best location for a more diverse holiday experience given the greater range of facilities such as hotels, entertainment, residential and retail development.
CONDOMINIUM MARKET
Supply: Approximately 770 units were completed and registered at the Land Department in 2012, and the total current supply is around 8,820 units. The market has grown steadily since 2003, by an average of 535 units per year. In addition, more than 6,100 units are still under construction and are expected to be completed this year.
Approximately 47 percent of the total supply is in the Hua Hin Coastal area. Many developers focused on Cha-am in 2011 and 2012 and some huge projects were launched there, so in the next two to three years, Cha-am will represent the biggest share of the market.
Of the 6,780 units launched in 2012, approximately 3,500, including one with more than 1,000 units, were in Cha-am. The limited availability of land at reasonable prices in Hua Hin is pushing developers to focus more on Cha-am. Many listed developers are focusing on the condominium market outside Bangkok, with Cha-am and Hua Hin among their biggest target locations for the future.
Demand: The average take-up rate at the end of 2012 was approximately 55 percent. The rate was highest in the Hua Hin Coast area at 73 percent, with a similar rate in the Hua Hin Inland area, compared to 47 percent for Cha-am and 63 percent in Pranburi. The low take-up rate in Cha-am reflects the sheer number of new units launched over the past two years, and it will take time to absorb all the supply.
Price: The average selling price in the Hua Hin Coast area at the end of 2012 was the highest at more than THB74,000 per sqm, around 5 percent higher than in the first half, as prices rose for units still available at some completed projects. The average price of completed projects in the Hua Hin Coast area is more than THB130,000 per sqm. Prices at year-end in Cha-am were little changed from the first half of 2012 because of the large number of units launched.
HOUSES AND LAND
Supply: Approximately 1,850 units were launched in 2012 and most are for sale in phases, a dramatic increase compared to the past few years, reflecting the confidence of both customers and developers in this area. In addition, the floods in the central part of Thailand at the end of 2011 were positive for the property markets in areas that were not affected, as some people sought temporary homes or considered buying second homes for use in future emergencies.
In addition, many new facilities have opened in the past few years, so the Cha-am,Hua Hin and Pranburi areas have become popular tourist destinations just a three-hour drive from Bangkok. Many more people from Bangkok are now looking for second homes for the weekends or for their parents.
The Hua Hin Inland area contains by far the greatest number of available housing units located to the west of Phetkasem Road (Highway 4), which creates a boundary between the Coast and Inland areas. Many cheaper units are located on the hillsides outside of town.
The high numbers in the Hua Hin Inland area mean there are many units waiting to be absorbed by the market and that older, unmaintained units may now be difficult to sell. In addition, some projects stopped construction and will restart again only after buyers sign agreements. Land prices of some parts of the Hua Hin Inland area is still lower compared to the area along the coast.
Demand: The average take-up rate of all locations was approximately 58 percent of the 5,600 units on the market. The rate was highest on the Hua Hin Coast at 68 percent, followed by Pranburi at 61 percent, and Cha-am and Hua Hin Inland at 56 percent. The best sellers were houses priced below THB4 million in the Hua Hin Inland area, which were bought mainly by Thais.
Price: The average selling price in the Hua Hin Inland area is the lowest, although many villa development projects are located there. Many of the housing projects feature small bungalows on small plots of land, suitable for two people. A lot of other mid-range to low-end housing is also located in this area.Prices start as low as THB730,000 for townhouses and go up to THB25 million for villas.
The average price in the Hua Hin Coast area is the highest, given the presence of some luxury projects where beachfront villas can fetch between THB20 million and THB40 million.
SUMMARY
The condominium market in the Cha-am, Hua Hin and Pranburi areas in 2012 continued to grow compared to the previous year. Many developers, especially listed developers, launched new projects while some local developers planned projects of their own.
The condominium market will keep growing in 2013 at a rate similar to that of 2012. Many housing projects were launched in 2012, especially in the Hua Hin Inland area which has around 70 percent of the total supply. The mid-range to low-end housing market was the most fashionable; the take-up rate of houses priced lower than THB4 million was the highest in 2012 and nearly 100 percent of the buyers at this level are Thai.
Andrew Batt, International Group Editor of PropertyGuru, wrote this story. To contact him about this or other stories email andrew@allproperty.com.sg
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