Where Should You Buy Your Condominium?

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Where Should You Buy Your Condominium
Where Should You Buy Your Condominium

 

Where Should You Buy Your Condominium
Where Should You Buy Your Condominium

Hidden gems in Hua Hin Investment-worthy condominium locations are still available by the sea, but it’s wise to do your homework before spending

The Hua Hin condominium market appears to be oversupplied, the consequence of a building boom that has been going on for the past seven years or so. Some very large new projects are still under way. This poses a challenge for anyone looking to buy in the popular beach resort area for investment purposes, or indeed for anyone hoping for value appreciation in the future. However, there are still some investment-worthy areas. Currently, the take-up rate of condominiums in Hua Hin and neighbouring Cha-am is low at around 55%. Out of the total supply of 19,444 units in the market, there are 8,666 units available, according to the Knight Frank Chartered database. Statistics show the annual take-up of condominiums in Hua Hin was 800 to 900 units per year between 2008 and 2010.

This rose to between 1,800 to 2,000 units from 2011 to 2014, it is expected that the market may require four to five years for all of the remaining units to be absorbed, assuming that there is no significant new supply during that time and that demand for condominiums remains at the same level as the past four years. Cha-Am is currently the worst-performing location with 52% of the units unsold, or 6,524 out of the total of 8,666 unsold units. The majority of unsold units in Cha-am are below two million baht each. Most are studios and one-bedroom units with no sea views. Many of the projects where they are located are on or near the beach but the units in question face inland.

There are also some locations in Hua Hin that are worth investing in. Between Hua Hin Soi 1 and Hua Hin Soi 85, the oddnumbered Sois that branch off Phetkasem Road toward the beach, only 399 units are available. The area is very convenient with a full range of facilities and amenities. The Khao Takiab area farther south of the town centre is also interesting, with 606 units available for sale. However, most projects in Khao Takiab are low-rises because of local building rules and regulations. One-and two-bedroom units priced from three to five million baht each are seen as promising for investment. One-bedroom units in this area tend to be comfortable, with sizes starting from 37 square metres, much bigger than their shoebox counterparts in Bangkok. Sea-view units remain the best investment, with average selling prices growing at a much faster rate. In 2014, the average selling price of a sea-view unit was 130,932 baht per square metre, representing a compounded annual growth rate (CAGR) of 6.6% since 2007.

The average for non-sea-view units was half as much, at 64,454 baht per square metre, while units with partial sea views averaged 74,219 baht per square metre. The scarcity of beachfront land and concerns about an oversupply of non-sea-view units has brought about the widening divergence in prices between the two condominium Where Should You Buy Your Condominium? types. Selling prices of studios in the Hua Hin – Cha-Am area range between 1.3 million and 5.6 million baht, whereas one-bedroom units range from two million to 15 million baht. Two-bedroom units range from 3.2 million to 19 million baht and three-bedroom condos from 4.6 million all the way up to 60 million baht.

The minimum unit prices of condominiums of every size in Hua Hin are higher than in Cha-am, Khao Takiab and Khao Tao. Studios in Hua Hin start at 1.9 million baht, onebedroom units at 2.8 million, two bedrooms at 4.9 million and three-bedroom units from 13.5 million baht. The Hua Hin condominium market was previously popular among affluent Thai families from Bangkok but recently it has expanded to capture new demand from medium-income Thai buyers.

Though the majority of buyers are domestic, 25% of are now foreign nationals. But in comparison to Phuket, the Hua Hin buyer market is not as diverse. Since last year, however, we have started to see seen more foreigners interested in Hua Hin condominiums, especially from Hong Kong, Singapore and Taiwan. Most are looking for two-bedroom units for their own use. The condominium market in this area is becoming more competitive, but only in certain sub-locations. Investors thus need to do their homework and should seek to buy in a sub-market where there is a lack of supply. Developers, meanwhile, should be cautious about where they launch projects, especially in Cha-am where the huge amount of new units has led to the highest competition.

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