Four years after the global financial downturn that put many real estate projects on hold, Phuket’s property market is once again ripe for another phase of positive development, said CBRE Thailand managing director Aliwassa Pathnadabutr.
According to Pathnadabutr, Phuket’s newfound energy is characterized by changes in the key players, the products on offer, and the buyers’ profile.
For many years smaller foreign developers have dominated the island’s market.
These players are generally less well-funded and mainly relied on buyers’ deposits and down payment for construction. Hence, when the crisis struck, many of them found it difficult to survive, putting many of their projects on hold.
However, many of the players today are larger developers, both Thai and foreign – some of which are publicly listed. This helped give the market a degree of professionalism. These developers include Supalai, SC Asset, Sansiri, and Land & House, among others, who are quite established in the Bangkok property market scene. Although most of these developers have primarily targeted the affordable mass market, many now are turning their heads to the resort home market, particularly foreigners.
In addition, the buyers’ profile is changing. According to Pathnadabutr, the island’s growing tourist number means a greater potential for new sources of resort property buyers, the majority of which are coming from BRIC countries, specifically China and Russia.
Tourist arrivals received a boost from the commencement of direct flights to the island from the Middle East, specifically Emirates from Dubai and Qatar Airways from Doha. Convenient access from the Gulf region could drive future demand for the island’s resort residential properties, said Pathnadabutr.
Since many of the Thai developers now dipping their hands in the Phuket market have long experience in Bangkok, they will also bring with them their extensive Thai client base, those who have not previously considered purchasing in Phuket. For example, Sri Panwa’s initial phase that was launched in 2004 attracted a number of Thai buyers mainly on the back of the developer’s established reputation in the Bangkok market.
Affordability has also become an important consideration for buyers, particularly for the resort condominium market. According to CBRE Thailand, there is a strong demand for properties within the THB5–15 million (US$164,000–490,000) price range.
But in addition to being competitively priced, a well-designed product is also important to capturing the new wave of Phuket demand, said Pathnadabutr. Unit sizes must be larger than comparable properties in Bangkok or Pattaya to maintain resort atmosphere.
Some of Phuket’s upcoming projects to look out for are Amari Residences Phuket, located in one of the island’s most prime areas; Rosewood’s branded villas to be developed by Hong Kong’s New World and located on the Emerald Bay, Patong; and Anantara-branded luxury villas in Layan.
‘As the high season is kicking in on a positive note, both in terms of exciting new launches and the ever-growing tourist arrivals, this upbeat trend will continue into 2013,’ Pathnadabutr said.