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02/08/2009 - Developer still bullish about Thailand

04/01/2009 - Increasing opportunities for retired property investors from developers who are diversifying

24/11/2008 - Niche player doing well despite global problems

14/07/2008 - Paradise for retirees

20/08/2008 - The Falls held it's First Press Conference

20/08/2008 - The Falls Lunch Party

20/08/2008 - Exhibitions!

DEVELOPER STILL BULLISH ABOUT THAILAND

Writer: Nina Suebsukcharoen
Published: 2/08/2009 at 12:00 AM

European retirees are favouring the country over its neighbours

While some foreign property developers and buyers have started looking at opportunities in some neighbouring countries, the Austrian developers of The Falls, Hua Hin, are still very up-beat about Thailand because they feel it is much safer and more appealing in many ways than other regional destinations.

CONFIDENT: Paul Derstroff says Thailand has a great advantage over its neighbours.

Paul Derstroff, who together with partner Michael Ruess is developing the 70-rai housing estate on the hillside of Khao Takiab through their Swiss-owned company, Vital Residence, said Thailand has a great advantage over its neighbours.

"For Malaysia one issue is religion - right now it's a nice and organised country, but we don't know what will happen in 10 years' time. Indonesia is the same, people are afraid of things that can happen there," he said.

"And food is an issue, I mean you cannot compare the food in Thailand with other countries. Some people don't like the food in the Philippines."

The relatively low crime rate in Thailand compared with some Western countries, as well as some within this region, is another important advantage.

Although Thailand's image has been dented by waves of political unrest over the past few years, Mr Derstroff said this has only influenced people who have never been to the country.

"Travellers who have been to Thailand more than once don't care, and this is another reason why we chose Thailand. Most of the people who have been to Thailand like it, or know somebody who has been and liked it, so it's easier.

"But for clients who have never been here, when they hear news [about unrest] they send emails or make phone calls saying: 'What's happening, is everything okay, are you safe?' I say, 'I'm sitting here and everything is very nice."'

EIA PROBLEMS: Kwandee Preecha, The Falls’ sales and marketing manager.

Although Mr Derstroff and his team are working as hard as they can, building has yet to start in earnest, with only two show houses nearly completed so far.

This is because they are waiting for clearance of the environmental impact assessment (EIA), and this is more difficult to obtain in Hua Hin because approval has to be given by the head office in Bangkok. The developers say they are certain they will get approval by the end of August.

Meanwhile the two show houses, one with two bedrooms and the other three, are expected to be opened for viewing by October.

"We could have moved a little faster with our project but we are still working on the EIA which delayed the construction over the past six to eight months, so we couldn't have moved faster anyway."

Kwandee Preecha, The Falls' sales and marketing manager, said Hua Hin was the most difficult area to get EIA clearance, noting that even a Bangkok-based hospital needed almost a year to cross this hurdle.

Although the worldwide economic problems have yet to abate significantly, The Falls is not being pressured by its main client group - upper middle-class European retirees - to reduce prices, but it is a lot harder to get clients right now.

"The upper middle class in Europe have a good pension and they all have at least one house or a big apartment, or they have money on the side. So our price range for these houses, five to nine million baht, is something our clients can afford," she said.

With as many as 60 to 70% of the buyers being German, Austrian and Swiss retirees, another benefit that they enjoy by opting to move here is the tax reduction on their pensions in their home country.

While not too happy with the 30-year leasehold structure, 90% accept it once they are fully informed on this subject.

In addition to these three nationalities, other buyers, also mainly retirees, come from the UK and Australia, and the project has even attracting an Arab and a Japanese national.

Ms Kwandee said The Falls was getting more Japanese clients after one of their retired countrymen decided to buy houses here.

Mr Derstroff sees an obvious split between Thai and foreign buyers, with housing developments designed for foreigners attracting as much as 99% foreign buyers. On the other hand, beachfront condominium projects seem to obtain a very high percentage of Thai buyers.

Ms Kwandee mentioned that Thais seem to be keen on buying condos on the beach, while foreigners don't care if the project is located further inland because it is the house they are focusing on.

Mr Derstroff added that foreigners do not want to live in a condominium that might be empty most of the time because the majority of the owners are working and living in Bangkok.

"They don't want to stay there alone with there only being a full house for two weeks over Christmas but for the rest of the year it's empty. They want to have neighbours and friends."

The prices of some Hua Hin condominiums, which can reach as high as 100,000 baht a square metre, is seen as expensive by most Europeans because in countries such as Austria they can buy condominiums for 3,000 (144,000 baht) a square metre. Of course prices in London and Paris are higher, almost double that.

One of Mr Derstroff's marketing plans that has met with little success is fractional ownership. This option was arranged after a group of buyers thought about sharing a villa but the majority of the clients do not like the idea.

"So I think it will be a big success in the right environment but at the moment our clients are mainly retirees who want to move here. There aren't that many holidaymakers and fractional is more of a product for people who don't want to stay here all year."

Mr Derstroff sees Hua Hin as having strong potential to attract more retiree projects, and his talks with other investors showing that they are interested in this idea.

He hopes to launch a similar project in the area after completing The Falls but it could be located a little farther south in Pran Buri.