Phuket is seeing strong demand for real estate due, primarily, to the return of Russian and Chinese buyers, according to independent real estate agent and consultancy Knight Frank. Yes, it’s the 2023 property boom.
The sudden demand is driving up prices by 15-20% in some areas, with pool villas on Phuket’s popular west coast being particularly popular among foreign buyers, with Russians acquiring 40-60% of the latest sales, a 10-15% increase from pre-pandemic levels.
The beaches of Kata, Karon, Patong, Kamala, Nai Thon and Bang Tao are the favourites of buyers, and Cheng Talay’s Laguna is maintaining strong popularity for the people that enjoy living around a golf course, gated communities and higher-end living.
Property prices in these areas have risen by about 15-20%, compared to an average increase of 3-5% in other parts of the island. According to Knight Frank research, demand from Russians is expected to remain high for the next 1-2 years, with the top three factors for them in deciding to buy being location, price and perceived trustworthy developers.
Chinese buyers are also on the rise as mainland Chinese return to Thailand as popular travellers, but they are often looking for real estate to serve their own people, unlike the Russians who purchased property in order to live in and relax.
Although sales of Phuket pool villas are on the rise, the condominium market has yet to fully recover, with sales in 2022 tumbling from 78.3% the previous year to 76.9%. However, Knight Frank estimated that the current boom in Phuket condos would return to pre-pandemic levels within a couple of years.
Knight Frank’s assessment is consistent with the latest Phuket Real Estate Association report, which showed that all finished condo units and villas with pools had been sold out. The president of the Phuket Real Estate Association, Phattanan Phisutvimol, said that the increase in sales of condominiums and luxury villas began after the Covid pandemic receded last year, and believes that this year will be remembered as the “golden year” for Phuket’s real estate market, with the trend expected to continue.
Frank Khan, executive director and head of residential, added that Thailand’s overall real-estate outlook is positive due to the recovery of the tourism industry, which has helped boost domestic demand. Furthermore, having a general election boosts overall country sentiment, making people more confident to spend.
He says that the strong demand in real estate, particularly in residential, is still in the premium segment, with prices starting at 10 million baht. However, he added that affordable condominiums priced under 2 million baht on Bangkok’s outskirts can maintain consistent demand because their primary market is the local market.
SOURCE: Knight Frank | Nation Thailand