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WORDS | Sean Lightbown 56 | PHUKET


SNAPSHOT Market Snapshot


Phuket R


ocked by devastating fl oods, mainland Thailand, including Bangkok, isn’t especially attractive to property-buyers at the moment. The country’s islands though, where life has continued untouched by the recent natural


disaster, are a different story and Phuket is arguably the best example. “The fl oods last year are having a lingering effect on home-buyers’ decision-


making this year,” Samma Kitsin, director-general of Thailand’s Real Estate Information Centre (REIC), told the press in January, adding that many buyers have been put off single family homes or townhouses in Bangkok and its suburbs, now preferring condominiums in places immune to fl ooding. Away from Bangkok, a recent survey by the Agency for Real Estate Affairs


“About 95% of properties are bought by foreigners. In my 11 years here, I’ve had one Thai buyer!”


(AREA) showed that demand for homes in Thai tourist destinations, especially Phuket, is still strong. There were 114 project launches on the island last year, it said, accounting for 6,216 units worth 91.41 billion baht, with an average price of 14.7 million baht. Plans for Phuket’s much needed airport expansion are further proof that


Thailand’s most established tourist island continues to gain popularity. The 5.8 billion baht upgrade, due for completion by 2015, will double the airport’s current passenger capacity to around eight million a year. New facilities will include domestic and international terminals, as well as runways. As for property sales, surely the market hasn’t remained entirely unscathed


by the global downturn? Luc Montens, who runs agency Tropical Properties (www.phuket-tropical-realestate.com), says interest is still high but notes buying patterns have changed. “Due to the economy worldwide, sales have slowed down but rentals have almost tripled over the past two years,” Montens told OPP. “A lot of these people renting right now are future buyers - they are just waiting for the economic situation to settle.” Unsurprisingly, Phuket’s property market is dominated by overseas buyers.


“About 95% of all properties are purchased by foreigners,” says Montens. “In the 11 years I have been active here, I’ve had one Thai buyer!” Prices range from two to three million baht ($65,000-$97,700) for a studio or one-bedroom apartment to a few hundred million baht for a luxury hillside


villa with ocean views. According to Montens, an average spend is 5 to 20 million baht. Complementing this, research by CB Richard Ellis showed that during Q3


2011, Phuket’s mid-range segment (15 to 35 million baht) accounted for 80% of total sales, while there was continued demand for entry level villas priced from 5 to 15 million baht. Research by property portal Rightmove Overseas confirms that


affordability is a market driver in Phuket. “We have seen a 68% year-on- year rise in Thai property searches and with one-bedroom apartments being advertised from £50,000 ($78,705) it’s not hard to see why,” says Tom Whale, an account manager at Rightmove Overseas. “The large majority of our users are looking at newly built condo-apartments in well-established resorts, where not only the cost of living is low, but rental opportunities are high. A number of other users are also looking to relocate, to either retire or simply leave the UK altogether.” One noticeable trend over the past couple of years is a shift in the


demographic of foreigner buyers. While the majority used to be from Europe, these days as many come from Asia – including China, India and the Middle East - or Australia. This includes expats working in Hong Kong and Singapore who take advantage of the frequent fl ights to Phuket. According to Nattha Kahapana, director at Knight Frank Phuket (www. knightfrankphuket.com), this shift in buyers has led to a demand for condominium projects in the areas of Patong, Karon and Kata – areas that also offer strong rental yields. Projects in these areas targeting this sector of the market include Eden Oasis Phase, which has 11 completed units and Amari Residence Phuket on Patong Beach. Another notable new project of four-bedroom villas was recently launched in Kamala, with prices from 198 to 228 million baht. Meanwhile, those buying for a mix of personal use and rentals tend to head


to the south and south-west, namely to Nai Harn, Rawai and Chalong. According to rentals site Holiday Lettings, which has more listings for Phuket than any other Thai destination, a two-bedroom villa in Nai Harn generates from $1,259/week and a fi ve-bedroom from $2,553, while a two-bedroom apartment in Rawai will bring in from $1,034/week and a two-bedroom villa from $1,259/week. In terms of its tourism, Kate Stinchcombe-Gillies at Holiday Lettings has it down as a “grown-ups destination - with secluded beaches, high-end accommodation, diving, golf and exploration-based activities – but with well equipped villas for families”.


www.opp.org.uk |MARCH 2012


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