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European retirees creating a boom market for Thai property

by Nareerat Wiriyapong
Hua Hin, Thailand (AFP) Jul 23, 2006
Veteran Swedish hotelier Sven Wermelin has travelled across Europe and Asia for his career, but also in search of a place to spend his retirement.

What he found was a 276-square-meter (3,000-square-foot) house in Thailand's southern resort town of Hua Hin.

"I sold my house in Spain, which is very expensive, to buy a house here where I get everything at a reasonable price. I can play golf and my wife can enjoy the beach, while my 15-year-old son can get very good education," said the 65-year-old, referring to the international schools in town.

"Hua Hin is my first home now. It is a perfect destination for those who want to enjoy life after retirement."

Wermelin is among the increasing number of foreigners buying property in Thai resort towns for their retirement.

Many are taking advantage of a new "retirement visa", which Thailand began issuing in February to foreigners older than 50, even if they are still working in their home countries.

The move has spurred strong demand for property, said George Mastronikolis, managing director of Hua Hin property developer Regal Thailand.

"For the past few years, expats living in Asia were the main buyers. Now this is changing with more and more individuals, mostly retiring people with the majority of them northern Europeans, discovering the benefits of living in Thailand," he told AFP.

"They sold their properties in Spain and other European countries, which have become very expensive, to buy property in Thailand."

Foreigners cannot own land in Thailand, but they can own a condo or a house.

In the upmarket tourist town of Hua Hin, residential units run from two to 30 million baht (52,500 to 790,000 dollars), but most of the demand is for mid-range houses costing 5-10 million baht.

"Hua Hin has the bright future of a unique city... a perfect family and retirement destination," Mastronikolis said.

Patti Tomaitrichitr, property analyst at KGI Securities, said the demand among European expats and retirees is greatest in the resort areas of Phuket, Pattaya and Hua Hin.

"Compared to other Asian markets like Hong Kong, Thailand's property prices and costs of living are relatively competitive," she told AFP.

Pattaya, still best known for its raucous red-light district, has seen sales double since mid-2005, with prices jumping by 50 percent since the third quarter last year, she said.

Phuket tends to attract higher-income foreigners, with sales rebounding since late 2005, after a slump following the December 2005 tsunami.

"Retirees can afford to live a lifestyle in Thailand that would not be affordable in the West, with many employing staff for driving, cleaning and nursing," said Charlotte Filleul, the Phuket-based sales manager of CB Richard Ellis (Thailand).

Phuket's international airport gives easy access to other cities in the region and to Bangkok.

Recreation activities such as yachting and golfing are among the most affordable in the region, making the island an attractive destination for retirees, she said.

"Phuket also has world-class, international medical facilities at very affordable prices, which are cheaper and more efficient than the services many Europeans and Americans would receive in their own countries," Filleul said.

Property prices in Phuket tend to be higher than the rest of Thailand. Condos built to western specification cost from 65,000 baht to more than 100,000 baht per square meter.

"Property prices have risen around 20 percent per year for the last five years and expected to continue to rise further," she said.

In Pattaya, villa projects with sea views are priced at millions of dollars.

"Some residential units in Pattaya are moving upmarket with significant upswings in price," said Richard Ellis' David Simister.

"Thailand is a very unique package because it has a good range of offerings -- transportation, international food, ability to own a yacht, a reasonably priced lifestyle, and a genuinely hospitable population," he said.

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