Strong demand from foreign buyers continues to draw Bangkok-based developers to Phuket’s condo market as they seek diversification from weak local demand.
Artitaya Kasemlawan, head of the residential sales project at property consultant CBRE Thailand, said the growth of Phuket’s property market over the past two years has been remarkable, driven by multiple factors.
“The key driver is the surge in foreign tourist arrivals,” she said.
“Many foreign buyers in the property market originate from the tourist pool, transforming their vacation dreams into property investments.”
During the first nine months of 2024, arrivals at Phuket airport tallied 6.2 million, 24% year-on-year growth.
Hotel occupancy rates surged to 71.5% in the first half of 2024, marking the highest level in five years.
Thai arrivals posted a moderate 5% gain, reaching 2.42 million, while foreign arrivals surged by 39%, totalling 3.78 million and making up 61% of the total.
The top five foreign source markets visiting Phuket were Russia, China, India, Kazakhstan and Germany.
Ms Artitaya said the number of international schools in Phuket has increased from 11 in 2019 to 16 this year, reflecting the island’s growing appeal to expatriates and foreign residents.
“Student enrolment in these schools in 2024 increased by 17% year-on-year, tallying 4,901,” she said.
“This growth highlights the significant presence of expats and foreign residents who chose to make Phuket their home.”
CBRE reported condo units sold in Phuket during the first half of 2024 surged by 142% year-on-year, reaching 3,000. Last year the island set a record with 3,300 units sold.
Between 2014 and 2019, the average number of condo units sold in Phuket was 1,148 units per year.
“This exceptional performance, supported by historically robust rental yields of 9-10% per year, healthy occupancy rates and steady capital appreciation, has enhanced Phuket’s appeal as a prime destination for wealth storage,” said Ms Artitaya.
She said there was a significant shift in the Phuket condo market, with units priced at 8 million baht or less now accounting for 63% of total units sold in 2023-24, up from 45% during 2014-22.
Conversely, units priced between 8-15 million baht comprised only 17% of total sales in 2023-24, compared with 49% in the previous period.
“The Bangkok condo market has slowed, prompting many developers to shift to Phuket, where demand remains strong,” said Ms Artitaya.
“In Bangkok, fewer than 10 condo towers had a full foreign quota, whereas in Phuket, the numbers are significantly higher.”
One Bangkok developer debuting in Phuket’s condo market is Capstone Asset Co, which last week launched the high-end Peylaa Phuket Bang Tao project, featuring 408 units valued at 3.4 billion baht.
Titiwat Kuvijitsuwan, chief executive of Capstone Asset, said Phuket is strengthening its reputation as one of the world’s premier leisure destinations.
The island’s appeal will only grow with ongoing infrastructure improvements, he said.
These include the phase 2 expansion of Phuket airport and the Kathu-Patong expressway, both of which should greatly enhance accessibility, said Mr Titiwat.
“The Phuket property market has proven resilient, largely unaffected by the economy, with foreign buyers driving much of the demand,” he said.
“The Bangkok condo market, particularly in the mass market segment, is encountering difficulties because of its reliance on local buyers amid the current economic challenges.”
According to property consultant Colliers Thailand, both listed and non-listed Bangkok-based developers have increasingly turned their attention to the Phuket condo market in recent years.
Notable developers include Origin Property Plc with five projects, AssetWise Plc with four and Central Pattana Plc and Veranda Resort Plc, each with one project.
The largest player is Sansiri Plc, which announced plans to launch 27 projects worth a total of 25 billion baht between 2025 and 2029.
Sansiri has been in the Phuket market for 13 years and developed 22 projects worth a combined 22.6 billion baht.
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