source: Bangkok Post: 21 Apr 2008

New projects add sparkle to property market in popular seaside resort, reports Nina Suebsukcharoen in Hua Hin

The property market in the popular seaside resort of Hua Hin is building on its strengths this year, with new developments rising and ongoing projects attracting strong interest. Purchases and development by vacation clubs are also livening things up.

Praphaisith Tankeyura, managing director of the 80-rai condominium and villa development Boathouse Hua Hin, said the market should pick up with the launch of some new condominiums including the Moroccan-themed Marrakesh by Major Development; Baan San Suk, located at the entrance of Khao Trakiab and developed by Sanrisi; and the relaunch of Malibu Khao Tao by Maneeya Realty Co.

''The average selling price of condominiums in Hua Hin is more than 100,000 baht a square metre now with the launch of Marrakesh and Baan San Suk,'' Mr Praphaisith said at a recent Songkran fair during which six Boathouse units were auctioned.

''All are on the beachfront but they are low-rise buildings, mainly four to six storeys. Our price is very cheap compared to theirs. And this despite the fact that we have invested more than half a billion baht in our infrastructure, swimming pools and garden.''

This is no empty boast because visitors will clearly see the evidence with two of the four condominium towers completed and the construction of the third under way. Perhaps this is why Laguna Holiday Club, part of the Laguna resort in Phuket, decided to purchase 55 units at Boathouse Hua Hin for around 300 million baht to serve its time-share members who now total around 5,000, of whom 65% are Thai.

Mr Praphaisith said several foreign retirement funds were also moving into Thailand with one from the US developing a low-rise condominium near the Hua Hin railway station. The goal is to serve American members by rotation but it is uncertain whether the fund actually calls itself a holiday club.

''This is something new, good for Hua Hin, good for Thailand.''

Phanom Kanjanathiemthao, managing director of Knight Frank Thailand, the property and rental management form for Boathouse Hua Hin, said that although the time-share business had a bad reputation in the past, things have changed in the US and Europe, where regulations have improved the industry.

Such regulations are rare in Asia and Mr Phanom urged the Thai government to consider new rules because the time-share business had expanded to fractional ownership whereby a condominium unit or villa is collectively owned by several people.

''In Europe and America they have laws supporting this and we should too. It would mean selling a whole building to 500 to 700 people instead of 90, and each could use the unit for 30-40 days a year or if they don't use it they could offer it for rent.''

Mr Praphaisith, a former president of Bank of Ayudhya, acknowledges that condominiums are easier to sell than higher-priced villas, but he has a few marketing strategies in mind. He plans to visit New York later this month to approach the approximately 100,000 Thais living in the city and four neighbouring states, because for them the 15-million-baht price tag is not that high.

''We have already sold five units to Thais in the States. Hua Hin is a romantic place for Thais, a magic word, the royal summer place is here. ... It's a place for your family to enjoy and live _ not like Pattaya.''

While things are looking up for Hua Hin, Mr Praphaisith notes that banks have tightened their lending to developers and only the strongest players are able to cope. ''Right now banks require presales of 40-50% before they provide you with a construction loan, so banks are very conservative.''

He said some projects had not reached the 40-50% presale level, and agreed that banks have to be cautious in ascertaining that developers have their own equity to carry a project forward.

''That is the risk, I think buyers really need to know how committed developers are.''

This change certainly benefits the second-hand market, but Mr Praphaisith noted that only units in well-maintained buildings have good value.

While some people are a bit uneasy about the direction of Thai politics, Mr Praphaisith thinks Thai people take such changes in stride. ''Governments come and go in Thailand. ... The issue is the economy. We have been close to the bottom for many years so there is not much room left to sink any further but there is opportunity for us to rise with the increase in rice prices _ rice is becoming like crude oil now.''

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