According to Knight Frank Thailand's research the condominium market in Phuket is expected to improve in line with the growing economy and increasing population. The rise in supply and selling prices will be key drivers, while demand is also gradually improving. The volume of new supply launched in Phuket is expected to continue increasing. Domestic project developers and joint venture companies will remain the main players in the market. Overall demand will be driven by foreign buyers, investors, and expatriates living in Thailand, particularly from China, Russia, and Australia. Additionally, there will be a significant number of buyers from South Korea. The average selling price per square meter is expected to rise across all areas, while the increasing demand for luxury condominiums may lead to higher prices in 2018, especially for projects located by the sea. Furthermore, one factor anticipated to stimulate the real estate market is the Smart City project in Phuket, aimed at developing both the economy and smart living, and establishing the city as a hub for the digital industry in the region, which will help attract investors and tourists. The project is expected to be completed in 2020.

          Highlights

  • Supply and demand in the condominium market in Phuket decreased in 2017, with the total new supply dropping by 29% to 1,736 units compared to 2,478 units the previous year. In terms of demand, 1,147 condominium units were sold in 2017, representing a 36% year-on-year increase.
  • New supply launched with sea views, partial sea views, and no sea views accounted for 44%, 54%, and 2%, respectively. Most new projects are categorized in the high-end market, primarily located at Karon Beach, Nai Harn Beach, and Bang Tao Beach.
  • The average occupancy rate for condominium projects launched in 2017 was 66%, a decrease of 6% year-on-year. However, some projects that are affordable, offer attractive down payment promotions, have complete amenities, and are in easily accessible locations achieved high sales within weeks of their launch.
  • The average selling price per square meter of all new projects launched in 2017 increased to 135,719 THB, a 5% year-on-year rise.

          Supply

          In 2017, approximately 1,736 units were launched, resulting in a cumulative supply of condominiums in Phuket increasing to 14,266 units, or about a 14% year-on-year increase. However, the new supply launched in 2017 decreased by 29% year-on-year, from 2,478 units to 1,736 units, as developers were cautious in selecting investment types and the types of products offered to buyers.

          Graph 1

          Condominium Market Supply in Phuket 2008 – 2017

Source: Knight Frank Thailand

          Graph 2

          New Supply in 2017

Source: Knight Frank Thailand

          Demand

          In 2017, the average occupancy rate was 66%, down 6% year-on-year, while the absorption rate showed a year-on-year decrease of 35.8%. The average occupancy rate of new projects with partial sea views decreased to 65%, or 16.7% year-on-year. During the same period, the occupancy rates for new units with sea views and units without sea views decreased by 3.4% and 2.5%, respectively. In terms of buyers, the condominium market in Phuket is predominantly occupied by foreign buyers, particularly from China, Russia, and Australia. This group of buyers typically purchases for personal use or as long-term investments.

          Graph 3                                                               

          Supply, Accumulated Demand, and Occupancy Rates of Condominiums in Phuket 2008 - 2017

Source: Knight Frank Thailand

          Prices

          The average selling price of all condominiums launched in 2017 was 135,719 THB per square meter, an increase of 2.5% year-on-year. The average selling price of units with sea views was 181,522 THB per square meter, up 1.5% compared to the previous year. The upward price pressure from new units entering the market resulted in the average selling price of units with partial sea views in 2017 rising to 115,828 THB per square meter, approximately 5% higher than in 2016. During the same period, the average selling price of condominiums without sea views increased to 103,927 THB per square meter, up from 102,583 THB per square meter in 2016.

          Graph 4

          Average Selling Prices of Condominiums in Phuket 2008 – 2017

Source: Knight Frank Thailand

Thank you for the information from www.knightfrank.co.th