Many developers have now decided to postpone launching new projects in our region during a market slowdown and are focusing on selling their unsold units.
The Cha Am, Hua Hin and Pranburi residential markets showed lower growth in the first half of 2018, a trend that is predicted to continue in 2018; because of this, developers need to wait until more unsold units in the market are absorbed. Residential prices in the Cha Am, Hua Hin, and Pranburi for the first half of 2018 were similar to the second half of 2017. Condominium markets grew rapidly in 2011–2012, launching more than 9,000 new units per year, but then decreased from 2013 onwards.
Nevertheless, many unsold units still remain available in the market. Many developers are trying to attract more buyers during the market slowdown, so they are keeping the selling prices similar to 2017 or increasing by only a few percentage points in some projects. In addition, many developers also launched marketing campaigns or special discounts for some of their unsold units that are still available.
Developers still have not dramatically increased their housing and condominium prices in 2018, due to the market slowdown and the high number of unsold units in the area. The most popular houses have unchanged prices with more than 80% of all housing projects located in the Hua Hin Inland area. Approximately 65% of new housing developments are in this area, especially the Hin Lek Fai and Tab Tai sub districts.
The Cha Am area has shown a significantly higher number of condominium units being undertaken due to some large-scale projects. As the Hua Hin coastal area has been popular for more than 20 years, many residential projects, hotels, resorts and other projects were built in the area. As a result, fewer land plots are left, with the number of condominium units much lower than Cha-Am. In addition, many condominium projects on the Hua Hin coast are small projects with fewer than 300 units in total. Although the main buyers in the Cha Am, Hua Hin and Pranburi areas are Thais looking to buy a condominium or house as a second home, foreigners also are buying, but smaller in number in the past few years.
Most are looking for small detached houses in the Hua Hin inland area with a price not over 5 million THB and some are staying in beachfront condominium projects that were completed more than 10 years ago due to the lower prices. Most foreigners are retired and have decided to live in Thailand because of the lower cost of living, the convenience, safety and the international hospitals in the area. The Hua Hin Inland area remains the main location for housing projects; although far from the beach, lower land prices is a positive factor for housing development All beachside cities around Thailand are facing tough times due to economic slowdown, directly affecting Thai people’s purchasing power and confidence.
Houses and condominium units in beachside cities are not the first priority for many buyers, because these properties are typically bought as weekend or second homes. Therefore the property market in all beachside cities is growing more slowly during the past few months. Despite Thailand showing a trend of economic improvement, developers are still not confident in Thai’s long-term purchasing power. However private large-scale projects in Cha-Am, Hua Hin and Pranburi seems set to continue due to infrastructure developments such as water parks, shopping malls and projects by the government, such as the Bangkok–Hua Hin high-speed train and the new ferry pier for services on the Pattaya–Pranburi route.
Source: Colliers International Thailand Research