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Austrian developers' focus on European retirees has paid off.
Nina Suebsukcharoen
This seaside resort seems little affected by the political problems shaking Thailand and the financial troubles besetting the world. But a closer look would show that the real estate market has been affected, though some developers are doing better than others.
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| At The Falls, the price of a leasehold house starts at around 5.5 million baht and it is houses not the condominiums that are selling well, although penthouses are winners here as everywhere else. |
Among the latter are two Austrians, Paul Derstroff and Michael Ruess, who are developing the 70-rai The Falls Hua Hin estate on the hillside of Khao Takiab through their Swiss-owned company Vital Residence Ltd.
Their niche concept of an estate for European retirees is helping them in these uncertain times.
Mr Derstroff thinks that other developers also still have buyers to go by what he has heard from property agents. But the increasing number of projects has made the market much more competitive.
''But for us we don't compete with these projects, we are concentrating on the target group, it's a niche and buyers want to move to Thailand,'' he said.
The Austrian duo are not the only foreign developers in Hua Hin. There are also Scandinavian housing developments up on the hills behind the market as well as a project called Modena being developed by a Danish businessman farther south in Pranburi.
There are far more foreign developers in Thailand's other key resorts - Phuket, Pattaya and Samui. However, like most of them, The Falls is being developed with the company's own capital without any banking support, but it does benefit from having obtained Board of Investment (BoI) privileges.
While one might expect that the global financial downturn would lead to buyers asking for bigger discounts, this does not seem to be an issue Mr Derstroff has to tackle. His company's leasehold houses and condominiums are modestly priced compared to the much steeper prices at some developments in other resorts, especially in Phuket.
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| Mr Derstroff and Mr Ruess with Kwandee Preecha, sales and marketing manager of The Falls. |
At The Falls, the price of a leasehold house starts at around 5.5 million baht and it is houses not the condominiums that are selling well, although penthouses are winners here as everywhere else.
To spur condo sales, the developers are considering selling the units on fractional basis. ''Some people don't live here all year round so may be two people could buy one apartment together,'' reasons Mr Derstroff.
They are also unperturbed by the growing popularity of mixed-used de velopments, pointing out that the retirees who buy residences at The Falls would have all the services and facilities of a five-star hotel.
So far The Falls has recorded 20 re servations with eight or nine contracts signed and more people visiting the company's new office in the Hua Hin market. It appears that those who made up their minds during the soft launch in the middle of the year will be paying around 7% less than those who jump in during the high season when the official launch gets under way.
As the development has attracted a mixed bag of international buyers, including people in Japan, Oman and Germany aside from those in Switzerland and Austria, marketing will be carried out in Hong Kong and Singapore.
Land prices in this area are far from cheap. Mr Derstroff estimates that beachfront plots in Hua Hin cost as much as 50 million baht a rai and similar plots in Pranburi five million. Plots farther from Hua Hin beach but offering good sea views are obtainable for two million baht.
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| Though the villas come in a row, residents would not feel as though they’re living in a box because VaSLab designed a roof garden to break the constricted atmosphere of traditional row houses. It also used non-X and Y axes to create wave movement in the design. The ample use of glass panels also allows residents in all rooms to enjoy a seaview from many angles—even occupants in the back of the third floor can have a seaview with a movable room panel. |
These prices do not appear affect the Austrian duo's commitment to Hua Hin as they intend to stay here 30 years if not more if possible. ''We see a big future in Europeans and other foreigners. They retire and they want to move to a warm country. This market is getting bigger and bigger - we follow the atmosphere in Europe and people there want to retire sooner than later.''
Thailand outshines other retirement choices within Europe or close to the continent is several ways. Many of them find southern France and Spain far too expensive with an apartment there costing three to four times what it does here. While Bulgaria and Turkey are other countries they tend to focus on, Mr Derstroff mentioned that they are not of everybody's taste with the infrastructure also lagging behind Thailand's.
''I think the quality of life is much better here than there and many clients come straight from Spain because Spain is too expensive.''
Foreigners also feel more secure in Thailand. ''We feel that this is a really safe country. We come from Austria and for me this is one of the safest places in the world. I feel the same here as I do in Austria, it's very safe and I can walk around everywhere.''
As far as Mr Derstroff is concerned Thailand outshines all its regional competitors too. ''When we sit and discuss with friends there is always the question of showing one option to Thailand and in the end there is no option because compared to the other countries Thailand has always been the way it is for the past 30 years. Tourists who come here know regardless of what government is running the country it is business as usual, still the same country and the same people.''
Mr Derstroff noted that everyone saw the current financial crisis coming because the financial heavyweights were selling and reselling mortgages until nobody really knew who was financing what. While it is now necessary to reboot the system and change things somewhat, in his opinion the big shock is wearing off in Europe after the authorities took strong action to support banks and financial institutions and even took over the very weak ones.
''Basically, there is a secure feeling that the whole situation is under control and we have seen people becoming more confident about the economy and starting to spend money again.''
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