The outlook today for the residential property market in Phuket is solid. One of the most popular locations in Thailand for overseas buyers, Phuket has seen villa and condominium sales growing year-on-year since 2013 and the indicators are that the demand for affordable villas and condos will continue to be strong.
The entry level sector consistently proves to be the strongest performer, while the luxury segment is the weakest. However, it should be recognised that the total value of entry level homes sold in any particular year is still less than the total value of luxury sales over the same period!
During the first decade of this century, the predominant Phuket property buyers were Europeans, Russians and Australians – with virtually no Thais in the mix. However, there has been increasing demand from Hong Kong and Singapore buyers since 2012. Also since 2012, banks have been far more active in offering mortgage-loans, although Thai banks continue to be reluctant to lend to foreigners. However, the increased availability of loans has meant that Thai buyers have become very active in the acquisition of entry-level villas and condominiums. Thai developers, in particular, are acutely aware of this segment and are increasingly designing projects specifically to attract Thai buyers.
The outlook for the villa and condominium market will remain positive. Demand will continue strong for affordable condominiums and villas, especially in the entry level and mid-range sectors.
With regard to condominiums, we have noticed that both the new supply from developers and the market take-up indicate a preference for one-bedroom and studio apartments, with lower buying prices than the more 'traditional' two-bedroom offerings. However, it's worth noting that the majority of buyers looking to acquire a resale condominium continue to show a preference for two-bedroom units.
The price per unit of new villa launches in Phuket has fallen and is moving closer to Pattaya prices, which range from 3-9million Thai baht. However, the downward price move disguises an increase in price per square metre; the unit size has been getting smaller as the demand for lower unit prices goes up.
Thai publicly listed developers, such as Amari and Sansiri, continue to dominate the entry level sector, offering affordable units that attract the interest of foreign and Thai buyers, while foreign developers appear to be holding onto their dominant position in the mid-level market.
Unsurprisingly, the west coast continues to be the most popular location, particularly the northwest coast and Patong. Properties offering sea views, easy beach access and a variety of nearby entertainment options naturally command the highest prices, whilst distance from the airport is an additional value consideration.
Buyers looking for a luxury, high-end, property in Phuket will find a plethora of distinguished properties to choose from, whether a condominium, apartment or villa. It's worth noting that properties in this sector, whilst undeniably available only to those that can afford the price tag, do represent extraordinary value when viewed in world terms. Such properties tend to be tightly held and, whilst new signature properties are occasionally offered, these days, more often than not, only become available as resales – especially so in the villa segment.
Phuket property insights was written for Window on Phuket
by Tom Bullivant, CEO of Garden Island Real Estate,
Garden Island Real Estate & Property Services
Ph: +66 81 719 6088, +66 89 649 8703