Property developers in Hua Hin need to adjust their projects to meet market demand and stricter regulations on the use of local nominees by foreign buyers, says Duangjai Kraus, managing director of the German-based property consultant Engel & Volkers Hua Hin.
”Many projects cannot be sold to foreign buyers as the nominee laws are stricter and the (49%) foreign ownership quota in their condominium projects is full,” she said. ”If the government extends the lease period from 30 to 90 years, foreign buyers don’t need to find nominees and buyers of leasehold property will be more confident in their contracts.”
One large Hua Hin development, Boathouse, has shifted target buyers from Thailand to Europe and named Engel & Volkers as its agent due to the company’s large network in European countries, she said.
Boathouse also redesigned its last phase recently and enlarged unit sizes by 50% to respond to European demand for larger units, she said.
”Depending only on Thai buyers is not enough,” she said. ”Hua Hin is a very popular resort destination among foreigners, especially Europeans.”
Maya, a townhouse project developed by Sansiri Plc subsidiary Red Lotus, has also adjusted its strategy. It plans to register some of the 51 townhouses as condominiums in order to be able to sell the units to foreigners.
Meanwhile, the Hua Hin Gardens condominium, developed by a Norwegian investor, changed from selling shares of a company that would own the project to registering the project as a condominium. At first, the developer thought foreign buyers might be more confident in buying shares than leasing for only 30 years as the leasehold period was too short for them.
Mrs Duangjai said Seahorse Resort, owned by a Thai developer in Hua Hin, decided to sell 29 hotel rooms to investors with prices between 1.9 million and three million baht. At a rate of 2,000 baht a night, a unit would generate a yield of 5-6% per year after expenses.
”The developer wants to invest in a development of a new hotel located close to the current one, so it sold the units to get quick funds,” she said.
She said demand for Hua Hin property remained strong as both confidence and market sentiment had returned. But the stronger baht has caused a delay in decision-making as prices were becoming higher for foreign buyers.
”Foreign buyers are also concerned about whether the project will surely be completed, and they will get a unit,” she said.
This year land owners with large plots have offered to sell. Within the last few years, prices of vacant land in Hua Hin’s downtown, hillside and seaside areas have risen by 30-50%.
She said beachfront locations for new developments in Hua Hin were already full, as were locations in Khao Tao, Khao Takiab and Pran Buri. New developments, therefore, have expanded to Ao Noi and Huay Yang in Prachuap Khiri Khan, an hour from Hua Hin.
Huay Yang was pioneered by Scandinavians as they prefer a quieter location. New developments may expand to Chumporn province in the near future, she added.
She said a property management service that took care of maintenance and rentals was needed in Hua Hin as many new condominium units have hit the market.
Rental management would be a good business in the next few years, she said, adding that 1,200 newly completed condo units were on sale and another 3,500 would be added next year.