Hua Hin area condo market slow
Pandemic brings halt to new project launches but prices hold steady
The condominium market in the Cha-am, Hua Hin and Khao Tao area remained slow in terms of both supply and demand in the second half of 2021, according to Sunchai Kooakachai, director and head of research and advisory at Knight Frank Thailand.
A survey by the real estate services firm found that only two new projects were launched for sale last year in the three resort communities: Cha-am in Phetchaburi, Hua Hin in neighbouring Prachuap Khiri Khan and Khao Tao to the south of Hua Hin.
The Covid-19 pandemic over the past two years has caused developers in the area to take a wait-and-see approach before launching or developing a new project. Although Hua Hin in particular remains a popular holiday destination for Bangkok residents, sales of condominiums continued to slow from the first half of the year.
Supply: Cumulative supply of condominium units in the three markets from 2008 to the end of 2021 totalled 28,055 units, with 58% in Cha-am, 11% in Khao Takiab, immediately south of Hua Hin municipality, and 13% in Khao Tao, just south of Khao Takiab.
Another 10% were located in Hua Hin municipality and 8% in hilly areas inland from the town. Of the total supply, 45% offered sea views of varying quality. In the entire area, only one project, a 136-unit condo in Hua Hin Soi 94, was launched for sale last year.
Demand: A total of 20,571 units out of the total supply of 28,055 have been sold, representing a sales rate of 73% in 2021, similar to that of 2020. In the second half of 2021, only 154 units were sold, bringing total sales for the year to 380 units. All told, 7,484 units remained for sale at the end of 2021, including approximately 3,200 units or 50% of available supply in projects launched five or more years ago.
Some 90% of condo buyers in the area are Thais living in Bangkok and another 5% Thais from other areas. The remaining 5% are expats, mostly retirees and mainly from Scandinavia, the Netherlands and France. Most foreigners living in Hua Hin prefer to buy a house or a villa because they are more private and suitable for long-term occupancy.
Khao Takiab, which is situated at the southern end of Hua Hin.
Condominiums in Khao Takiab enjoyed the highest sales rate at 96%, followed by Khao Tao at 95% and areas inland from Hua Hin at 90%. The sales rate was 83% in Hua Hin town and 60% in Cha-am. The latter has the highest number of unsold condos at 6,468 units, or 40% of all remaining supply.
At present, there is almost no land next to the sea available for development in Hua Hin. Some seafront sites are available in Cha-am but it is less popular than Hua Hin, which offers more convenience and amenities.
Ample space remains for development in the hilly areas inland from Hua Hin, which should be of interest to investors because parts are still within Hua Hin city limits and are popular with foreigners.
Prices: The average asking price for sea-view condominiums in the area was 141,670 baht per square metre at the end of 2021, a rise of 2% from the first half. New sea-view projects have an average asking price of 250,000 baht per sq m, while units in projects without sea views can be had for as little as 70,700 baht per sq m.
Prices have remained relatively stable but with the number of unsold units in the Cha-am area still high, developers continue to offer promotions and discounts to close out sales.
Outlook: The overall condominium market in the three resort areas in 2022 is expected to be relatively stable, with very little new supply coming on the market while developers monitor the course of the pandemic and the economic and tourism recovery.
Condos in seafront areas are in short supply so their selling prices will tend to increase. But in Cha-am, it may take some time to move unsold units and prices may fall at some projects given the age of the developments.
Although the pandemic has had a negative impact on the condominium market in the area, it has also generated more interest among people in Bangkok.
This group of buyers see the area as a place where they would prefer to ride out the pandemic rather than being in the capital. This has resulted in more demand for homes in Cha-am, Hua Hin and Khao Tao, which is likely to expand further once the pandemic has passed.