Hua Hin weighed down by oversupply of condos and houses

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buksida
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Hua Hin weighed down by oversupply of condos and houses

Post by buksida »

Whilst the historic Thai resort town of Hua Hin has been spreading continuously over the past few decades with real estate developments now prevalent next door in Cha Am and Pranburi, the latest round of political turmoil reined in the take-up rate in the first half of this year although sales were up slightly compared to the previous six months.

An in-depth research by Colliers International released recently states that although Thais have been mainly buying condominiums launched at this expanding resort area over the past couple of years particularly those on the coast, foreigners have largely opted for single houses inland Hua Hin.

“The property markets in Cha Am, Hua Hin and Pranburi area were directly affected by the political problems. Consequently, many condominium and housing units are still available in the market. Thus buyers have various choices and may take some time to decide,” the report said.

“Most new condominium projects launched over the past year focused more on markets below the high-end bracket. Some new condominium projects that are expected to be launched in the second half of 2014 and in the future are also focusing on this target group.”

Foreigners buying property here are mainly from Europe, particularly Scandinavia, Switzerland and the Netherlands. Some foreign developers have launched small single house projects in Hua Hin’s inland zone, which they sell directly to these Europeans.

Colliers International’s research reveals that in the first half of the year there was roughly 11,250 condominiums and 10,900 housing units in Hua Hin, Cha Am and Pranburi.

Around 730 new condominium units were launched in H1 2014, with this being a drop from H2 2013 due to the political uncertainty and the large amount already available in the market.

Average condominium price was 69,700 per sqm (USD2, 151), up 3 percent from H2 2013 whilst the average take-up rate was approximately 74 percent, which is slightly higher than the preceding six months.

Around 580 housing units were launched in this period with inland Hua Hin now having the largest total of about 7,090 units.

The average take-up rate in Hua Hin, Cha Am and Pranburi was approximately 72 percent, up around 6 percent from H2 2013. The average selling price in this period was approximately 6.73 million baht (USD207, 716), a 17 percent increase from H2 2013.
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Source: Property Report
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Re: Hua Hin weighed down by oversupply of condos and houses

Post by margaretcarnes »

Personally I think that there is over supply now in HH - both of condos and individual units. And that this over supply situation has been brewing for a few years.
A friend of mine - who you know Buksi - has recently sold a condo and IMO was damned lucky to sell at close to the asking price, after 3 or 4 years on the market. The buyer was a wealthy Thai. Say no more - the vendor was lucky.
But looking back, when you and me landed in HH the place was already primed and earmarked for some big developments. The Melia for one. On a much smaller scale the Hare and Hounds was already spoken for via Scandi money. The change had already started and there was no stopping it, but the biggest investment money has come from wealthy Thais, while Farang development companies have tried to ride along on the wave.
Maybe it all would have continued to plan if it hadn't been for a few political hiccups along the way - which may deter some farang investment - but I don't think will deter Thais who have traditionally viewed HH as the ideal place to be seen to have a holiday home.
If this trend continues the only logical conclusion will be that Thai buyers continue to drive down property sale prices.
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Re: Hua Hin weighed down by oversupply of condos and houses

Post by Expat657 »

For about 12 months I've been regularly browsing the real estate agents websites and from what I can gather is that it's the same businesses, houses and condos for sale. Nothing seems to be shifting! The agents portfolios just keeps increasing. You would think this would bring the prices down or that there's room to manoeuvre for a deal. Nope.......
Land, well.... That keeps increasing into never never land!
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Re: Hua Hin weighed down by oversupply of condos and houses

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condos.jpg
Hua Hin, Cha-am see condo glut after demand drops
everal residential projects in resort area undersold after numerous launches since 2012
Residential projects in Hua Hin and Cha-am have been stuck with huge stocks of unsold units after demand dropped, according to a survey by The Nation.

Presales at eight condominium projects averaged 64 per cent, even though some of them were launched two years ago.

The Energy Hua Hin by Baan Rajprasong Co, which was offered in 2012, has sold 70 per cent of 5,997 units in its first phase, which has already been completed and transferred to buyers this year. The 529-unit second phase will kick off next year.

The Trust Hua Hin by Confidence Co, a subsidiary of Quality Houses, showed presales of only 50 per cent since its debut last year. Construction has finished and units were transferred in the second half of this year.

Of the 171 units at The Crest Santora Hua Hin by SC Asset Corporation, 80 per cent have been presold since last year. Transfers will begin next year.

Malibu Kao Tao by M Talay Co, which is owned by the Malinond family, is 62 per cent sold out since 2012.

Pairoj Wattanavorodum managing director of The Confidence Co, said the market had been oversupplied since 2012, when developers from Bangkok expanded to this resort destination.

Most of the demand comes from Bangkok, where people are looking for a condo to be their second home rather than their first home. When the economy slowed down, that directly hit demand for property in this location.

Full Story: The Nation
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Re: Hua Hin weighed down by oversupply of condos and houses

Post by Dannie Boy »

Just an observation regarding the accuracy of this article - it mentions that 70% of the Energy project has been sold and completed and handed over to the buyers. I can't say for certainty that none of the dwellings have been finished, but for sure the majority are no more than half completed shells.
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Re: Hua Hin weighed down by oversupply of condos and houses

Post by Nereus »

It has to asked just how much of this new construction is a direct result of the floods of 2011.
There were literally thousands of Bangkok residents, in a financial position to do so, scrambling out of the city to Hua Hin and Cha Am at the time.

To a lot of middle class Thais, whom most probably own a property in Bangkok, it would not be a problem to obtain finance to buy another property away from the city.

With the usual Thai knee jerk reaction to most things, developers are not any different.
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Re: Hua Hin weighed down by oversupply of condos and houses

Post by Lancashire Lass »

We live near Hua Hin Energy and none of the condos are complete, it's still all very much like a huge building site and way way far to big! The accuracy of the article is incorrect and also how they have reached the per cent sold does not tally up with units sold.
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Re: Hua Hin weighed down by oversupply of condos and houses

Post by richard »

Dannie Boy wrote:Just an observation regarding the accuracy of this article - it mentions that 70% of the Energy project has been sold and completed and handed over to the buyers. I can't say for certainty that none of the dwellings have been finished, but for sure the majority are no more than half completed shells.
Maybe the buyers are consortiums who are bulk buying for a profitable resale on completion?
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Re: Hua Hin weighed down by oversupply of condos and houses

Post by cozza »

I have been into a couple of these developments sales offices being curious about costs etc and I dont know where the article has gotten its facts from but it didnt seem that way when I went in, many of the projects here are almost sold out.

They get huge attraction when offering off plan prices to those who buy "in bulk" wishing to on-sell later. Studio and 1 bedroom condos go like hotcakes.

The other concern from my point of view is the growing cycle of debt on these places. I think the banks are way too leveraged into the property market here...but will prices fall? Good question...I think Thais generally don't like to lose money on things like this so will find ways to pay the banks.
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Re: Hua Hin weighed down by oversupply of condos and houses

Post by Awu »

cozza wrote:I have been into a couple of these developments sales offices being curious about costs etc and I dont know where the article has gotten its facts from but it didnt seem that way when I went in, many of the projects here are almost sold out.

They get huge attraction when offering off plan prices to those who buy "in bulk" wishing to on-sell later. Studio and 1 bedroom condos go like hotcakes.

The other concern from my point of view is the growing cycle of debt on these places. I think the banks are way too leveraged into the property market here...but will prices fall? Good question...I think Thais generally don't like to lose money on things like this so will find ways to pay the banks.
Does this really means that it is sold out or that it's just a delay before the units will come out on the market?.....
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Re: Hua Hin weighed down by oversupply of condos and houses

Post by richard »

Awu wrote:
Does this really means that it is sold out or that it's just a delay before the units will come out on the market?.....
It means (I suspect) that bulk buyers will hold on to them and sell them on when the price is right
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Re: Hua Hin weighed down by oversupply of condos and houses

Post by Ginjaninja »

Can I ask the property gurus onboard if they know if there is an official governmental body that formally certifies a new-build condominium so that the developers can proceed with the transfer of units to buyers?
Is there such a process in Thailand that deems condos safe to live in?
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Re: Hua Hin weighed down by oversupply of condos and houses

Post by johnnyk »

I sold my house 10 months ago and broke even after 8 years. I count myself lucky and I'm happier with my money not tied up thousands of miles away and vulnerable to corruption, incompetence and general b.s.
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Re: Hua Hin weighed down by oversupply of condos and houses

Post by buksida »

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. The building is not done yet, as 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. Our 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.

Therefore, 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 in the price range 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.

Full Story: Bangkok Post
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Re: Hua Hin weighed down by oversupply of condos and houses

Post by PET »

buksida wrote: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. The building is not done yet, as 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. Our 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.

Therefore, 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 in the price range 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.

Full Story: Bangkok Post

I have just spoken to a knowledgeable friend in Pattaya who says that over 50% 0f new condos in Pattaya are unsold
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