Thailand, with its developing economy, growing population and booming tourism market is growing rapidly in the real estate sector as well. The impact is evident in the huge number of high-rise condos and office buildings popping up in not just Bangkok but in all of Thailand’s major markets. But what sparked this massive real estate boom?
One of Thailand-Property.com’s featured members, Marck Christiansen, co-owner of 2nd-home, one of the longest-standing real estate agency in Hua Hin says that this market trend had to start from somewhere. Below he offers insight as to how and why Thailand’s real estate market is where it is today.
Christiansen says that he has been watching the city of Hua Hin grow and flourish before his eyes, which he believes stems from some specific societal and commercial factors in Thailand. As one factor influences another, together they have created a ripple effect in the nationwide market.
As any clever developer would, Christiansen has used this information to develop some very strategic projects, but we’ll get to that later on. First, let’s talk about this ripple effect in Hua Hin:
1. Lower Costs Are Growing the Population
Traditionally reserved for the wealthy upper-crust of Thailand, Hua Hin has always predominantly attracted a demographic of people who were willing to pay the high construction costs required to build there. However, as technological advancements, better roadways and more supplier competition have arrived in the region, higher quality and more attractive materials are now readily available, at lower costs.
“Developers in Hua Hin have recently become able to create modern homes at much more affordable prices than ever before,” Christiansen says. “While the area is starting to attract a higher percentage of the home-buyer population, its architecture and general character qualities are still as appealing as ever with no signs of diminishing value.”
2. The Greater Population is Funding More Attractions
Renowned for its golf courses and dignified restaurants, Hua Hin hasn’t always had much to offer families besides the beach. However, with its expanding population it is now a strong choice in location for building new attractions (such as the Vana Nava Water Jungle park, Pluen Wan, Bluport shopping mall, etc.) and hosting events (such as the annual Jazz Festival, Bike Week, Kite Festival, Yachting Regatta, etc.). With more things to do, the region is becoming a top family-destination for Thais and expats alike.
“Families want to settle down or even just visit an area that’s safe and respectable, but also has things to offer each member, regardless of their age,” Christiansen said. “Hua Hin’s tourism board has been making strides to turn it into one of the most family-friendly environments in the country.”
3. More Attractions Leads to Greater Interest in Renting
With more and more reasons to visit the coastal city, Hua Hin is quickly growing its reputation as a place with tremendous rental opportunities.
“The Thai economy is budding and the population is making more money; growing its middle class, and vacationing more often,” Christiansen said. “Because of these factors, rental homes in holiday destinations like Hua Hin have recently been experiencing a huge increase in popularity from the domestic market.”
With a larger demographic of people who may not be ready to buy a second home but still want high-quality accommodations during their time off, rental homes by the sea are in hot demand and Hua Hin’s location couldn’t be more convenient.
4. Higher Rental-Yields Piques Investor-Interest
With the demand for rental properties increasing every year, more and more internationals are targeting Hua Hin as a place to invest in real estate, and developers are answering their call.
“The area is growing with developments that can easily be converted into holiday homes when the owners aren’t using the property themselves,” Christiansen said. “This is a trend that specifically interests international investors as well as expats or local businesspeople who frequently travel.”
Compared to other major markets in Thailand, Hua Hin has an advantage in that it’s not only located within driving distance to Bangkok but also maintains a reputation so positive that it is able to attract a consistent interest year-round.
5. Investors Are Interested in Hands-Off, High-Returns
With more interest from foreign investors, the trend of purchasing units within full-service resorts is on the rise. This is a type of development that allows an investor to purchase a condo or villa below market-average, and then hand the keys back over to the developer who pledges to keep the property rented out for a certain number of years, or until a specific ROI has been achieved.
Upon the end of the contract, the owner may either take back full use of the property or continue the profit-share agreement with the development.
“We have seen this option become increasingly popular among customers who aren’t immediately able to manage the property themselves,” Christiansen said. “For example, those who anticipate retiring in several years or are committed to a job contract in another place find this a safe way to see an immediate return on their investment with little-to-no involvement.”
6. Meeting the Demand with Full-Service Management Developments
Precociously capitalizing on the trending appeal of hands-off investments, Christiansen is in the process of establishing a joint venture between 2nd-home and one of Hua Hin’s leading agencies, Dream Estate to create a brand new full-service, full-management development on Hua Hin’s coastline, to be called La Bua*. With 2nd-home’s proven success in real estate sales and rentals, and Dream Estate’s expertise in property management, construction, buying-, selling- and letting property to both national and international markets, the duo’s development will soon meet this niche demand from investors.
About La Bua:
A fully serviced, five-star residential estate, La Bua (a name that translates to “Lotus Princess”), will benefit home owners and investors from all stages in life who want to live or invest in a contemporary piece of paradise without any risk. Offering a home for life or an investment for the future, these design residences have been principally created based on the ideas and thoughts mentioned in this article.
To find out more about La Bua development contact 2nd-Home by clicking here.
