© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
November 23, 2012 7:45 pm
When the Thai monarchy christened its summer retreat in Hua Hin “Klai Kang Won Palace” it was on to something. The name, which translates as “Far From Worries”, captures the essence of the tranquil town on the Gulf of Thailand. What was then a sleepy fishing village became Thailand’s first seaside resort with the arrival of a railway line from Bangkok and the country’s first golf course.
More than 80 years on, international jet-setters arrive by private aeroplane. Chiva-Som has long held its place as one of the world’s finest spa resorts, and the likes of Kate Moss, Liz Hurley and the Beckhams have been known to cloister themselves in its lush tropical grounds on Hua Hin’s unblemished white sands.
Yet for all Hua Hin’s celebrity appeal, it does not have the cachet of Thailand’s southern island of Phuket. What it lacks in brand image it makes up for in genteel appeal, an eclectic mix of activities and value for money. Prices for comparable properties are typically 30 per cent cheaper than Phuket. And Hua Hin, a three-hour drive from Bangkok, boasts many of the capital’s amenities with few of its downsides.
Hua Hin has undergone a building boom over the past decade. Thailand’s “old money” has always favoured the resort and the beachfront is lined with condominiums, five-star hotels and villas owned by the country’s wealthiest families. Now Thailand’s new wealthy, based in Bangkok, echo that sentiment, aspiring to own a weekend home in Hua Hin.
International buyers have also discovered its appeal. Pool villas are the most popular and there has been a surge in these developments, fuelled in part by the 2004 tsunami that devastated Phuket but left Hua Hin and the Thai gulf unscathed. High prices and dwindling beachfront land stocks have pushed development inland to hilly areas west of Hua Hin.
Irishman Jonathan Wogan, 36, bought a three-bedroom pool villa off-plan in the Golf Village development in southern Hua Hin for Bt7.5m (£154,000) in 2005. But when the builder had still failed to complete the work three years later, Wogan brought in a fresh team to finish the job.
Despite the setbacks Wogan, a keen golfer who first visited Hua Hin in 2002 and felt it offered investment potential, is pleased with the outcome. He runs a Vietnam-based furniture business, but lives in Bangkok and lets out his Hua Hin villa. “Since I’ve been letting it out, it’s averaged around Bt80,000 (£1,632) a month,” he says. “So I’m pretty happy with the yield.”
The pace of building in Hua Hin peaked in 2008 and 2009. The global financial crisis and falls in European exchange rates of 25 per cent against the Thai baht caused demand to drop and slowed developments. In the first six months of 2012 just 30 villas were started, though 1,070 are scheduled for completion by the end of the year. Many projects were postponed, since developers build to order.
An eight-bedroom, 11-bathroom villa with infinity pool on the Jack Nicklaus-designed Springfield golf course north of Hua Hin, on sale for Bt138m (£2.82m), illustrates the current state of the market. Built by a Bangkok-based Swiss-US lawyer, the property has been marketed by Engel & Völkers since completion three years ago.
“We haven’t had much interest,” says Apinya Punsa-Ard, the company’s sales manager. “Indeed, we have few enquiries for luxury properties. Thais, who are the main buyers now, picture Hua Hin as the beach, not the mountains.”
One property, perched on the hills west of the Hua Hin near Black Mountain golf course and for sale through Colliers International, encapsulates the problem. The three-bedroom, 538 sq metre house, with pool and landscaped gardens, was built two years ago by an English couple who have never lived there. The owners wish to sell because of the downturn and have dropped the price from Bt16m (£326,530) to Bt14.9m (£304,081).
However, golf remains a big attraction for many overseas buyers. With 10 international-standard courses, Hua Hin can prove an irresistible draw for Asia-based businessmen or retirees fleeing European winters. “Last year around 15 per cent of those purchasing condos in Hua Hin were overseas buyers; this year it’s 25 per cent,” says Risinee Sarikaputra, Knight Frank’s associate director of research and evaluation. “Many are based in Hong Kong, Singapore, Shanghai or Bangkok and enjoying the better economic climate in Asia.”
The influx of international buyers has helped keep Hua Hin’s condominium sector buoyant. But the market is driven by Thai buyers who see a Hua Hin property as a status symbol, doubling as an investment. The focus is on smaller condominiums in the Khao Takiab area that better utilise limited coastal land, with a price ceiling of £80,000. Overseas buyers tend to choose larger properties with pools akin to neighbouring five-star hotels.
A two-bedroom beachfront penthouse condominium on the unspoilt shoreline at Khao Tao, south of Hua Hin, ticks all the boxes. The 178 sq metre property, with sea views from the master bedroom, is built in an eye-catching “origami” style. Set around an infinity pool and among untouched pine forests, the property is on sale for Bt21m (£428,571).
For international buyers the advantage of a condominium is that it can be owned outright as a freehold, as long as 51 per cent of units in the development are Thai-owned. This arrangement is an accepted workaround for property laws that bar foreigners from owning land. However, villa and house buyers may purchase properties on 30-year leasehold. Developers often promise two automatic 30-year extensions, though they would be at the whim of the landowner and unenforceable in Thai law. Some go down the legally dubious route of forming a company, with a majority of Thai nominees, to make a purchase. Agents advise against this practice, which is coming under increasing scrutiny from Thai authorities.
• Close to Bangkok
• Six-month dry season during the European winter
• Pristine white sand beaches
• No international high school
• Traffic on Thai holiday long-weekends can rival the capital
What you can buy for ...
£100,000: A 52 sq m one-bedroom sea-view apartment in south Hua Hin
£1m: A three-bedroom pool villa set on the Black Mountain golf course
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.