|This section outlines some of the findings from the CBRE Phuket Property Report, a quarterly subscription report which brings professional analysis and transparency to the growing Phuket villa market.(Phuket Property Report Page)
Phuket Condo Supply:
- Around 90% of total units sold were from entrylevel projects with a price range between THB 2 – 8 million.
- The condominium market has continued to be mainly driven by investors rather than end-users.
- One entry-level condominium project (below THB 8 million per unit) was launched with 139 units.
Prior to 1990, there were almost no condominiums for sale in Phuket as the island was still relatively unknown as a resort destination. The first condominium was completed in the late 1980s in the Kalim area, but there was still virtually no activity until the development of the Allamanda project at Laguna. This report tracks the condominium market from 2004 to the present. In 2004, the base year for our analysis, the total condominium supply was estimated to be 447 units. As Phuket’s popularity increased as both a tourist and resort home destination, the condominium market grew and the total supply more than doubled to 1,322 units in 2006. From then, the total supply has continually increased from 1,322 units to more than 3,000 units in 2010.
In Q2 2016, the supply of completed condominium projects grew to 6,509 units, a 16.1% Y-o-Y growth. There were 4,553 units in the pipeline, which were expected to be completed by 2019.
Phuket Condo Market Summary:
Investment continues to be the main driver for buyers to purchase condominiums in Phuket. We saw a mix of nationalities of buyers. Chinese buyers were the majority of investors especially in the entry-level condominium market.
The Phuket condominium market showed signs of recovery with a 33% increase in sales compared to the same period last year. However, there was demand in only certain segments and for a limited number of projects.
Entry-level units were best sellers, 90% of the total sales were entry-level projects in this quarter. There was one entry-level condominium project launched this quarter.
New condominiums projects are more popular than older ones.
The resale market is slow as there is a significant gap between the prices that sellers want and the price purchasers are willing to offer. The increase in units being offered for resale is partly due to the owners using the properties less and getting rental income has proved harder than expected in those developments not attached to a hotel.
Moreover, the local government of Phuket has issued notices to restrict daily rental activity (less than one month) without a hotel license. This law was largely ignored but it is now being implemented which makes it even harder for property owners to get rental income.
There is no speculator market for resort condominiums where people buy off plan and intend to resell prior to completion. This is partly due to the payment scheme in Phuket where the majority of the price is paid during the construction period, unlike in Bangkok where the largest portion of payment is due at the project’s completion.
For further information on the Phuket property market, download our latest Phuket Residential MarketView.