HUA HIN is a relatively small beach city that has long been a popular vacation destination. It has been a vacation destination for predominantly Thai citizens.
Its distance from Bangkok (at about 2.5-3 hours’ drive) and good transportation infrastructure placed Hua Hin just far enough away to feel like one is far from Bangkok but still close enough to be convenient for short weekend trips away from the busy bustle of the big city. Over the past few decades, Hua Hin has been developed into a bigger city with many new amenities to service a growing population of international tourists and residents in the area. It also attracts some retirees who permanently move to live there. From the mid-2000s forward, Hua Hin boomed with multiple large-scale water parks, amusement parks, branded hotels, malls and popular branded F&B entering the market.
In 2012, the Hua Hin real estate market boomed and developers flooded the market with well over 10,000 units, leading to exponential increases in land prices as developers scrambled to buy up prime properties for development. Due to the glut of new projects announced between 2012-2014, Hua Hin is still recovering from a gross oversupply and recovery has been slow because of the economic slowdown in recent years which has affected local demand for resort properties. In 2017, the majority of supply has been largely absorbed, and there is potential for new developments.
With most prime beachfront land in Hua Hin already taken, new beachfront development locations in prime areas are scarce. At this point scarcity of land and high land cost in the established downtown locations and along, Hua Hin Beach has pushed developers to other beach locations nearby such as Khao Tao and Cha am. The challenging issue is that those locations are not ideal for meeting wide target demands as they have limited retail facilities and amenities.
Another reason for market slowdowns may not be due to the economy or low demand, but because there is not much product innovation to drive new demand. Hua Hin is an example of this situation where there has not been much innovation in product design to attract the market. Height regulations and long, narrow land shapes sometimes force developers to design projects that end up having the same development layout. An example of a typical development layout for a project in the Hua Hin market is a long plot with narrow beach frontage (think the shape of a ruler) made up of two buildings not more than 20 metres apart facing each other and separated by a narrow swimming pool in the centre.
A project that proves design innovation and differentiation plays a large part in the success of a project is Veranda Residence Hua Hin where the developer found a rare piece of land with good size and shape, not too far from downtown Hua Hin with beachfront access and was creative with the layout and design of the project. Not only did they satisfy the resort home buyers with sea views from the majority of units but also changed the planning from the typical Hua Hin product to something new and innovative. With good positioning as “affordable luxury”, it became a unique project worthy of attention from end-users and investors alike. This is one example of the well balanced value proposition of all of the aforementioned points and offers a unique selling point of branded hotel services.
The Hua Hin hotel market is in a similar situation when it comes to new product design with limited new hotels in the pipelines. New developments and newly renovated luxury hotels have proven successful which is evidenced by Hua Hin Marriott Resort & Spa that can command a premium rate. Mahasamutr, once the Country Club is completed, will be another major attraction for Hua Hin.
The future of Hua Hin real estate lies in the development of new product innovations. Its strong fundamentals with accessible proximity to Bangkok for Thais’ weekend getaways and the future infrastructure developments, namely of a high speed train and road improvements, will lead to new growth opportunities for its real estate market.