CBRE, a leading global real estate consulting firm, has revealed that the luxury vacation home market in Phuket is showing clear signs of recovery in 2023 following the COVID-19 pandemic. Notably, the condominium market has recorded the highest sales in the first half of 2023 in the past decade. By the end of the third quarter of 2023, CBRE reported a sales value increase of over 113% compared to the total sales for 2022. Three main factors have contributed to this growth: the potential of Phuket itself as a world-class tourist destination, a clear rental market with management services that provide convenience for investors, and most projects offering services that enhance the living experience for residents. These factors have led to continuous interest in the Phuket market from both residents and investors.

Ms. Prakairat Meechusarn, Head of the Phuket Real Estate Sales Department at CBRE Thailand, stated that the overall market for villas and condominiums in Phuket has been steadily growing since the easing of COVID-19 restrictions. This is evident from the increasing number of luxury vacation home projects being launched, reflecting developers' confidence. The condominium market in Phuket recorded sales of 1,486 units in the first half of 2023, the highest in the last decade. In the first half of 2023, 364 new condominium units were launched, and CBRE predicts that over 3,000 new units will be launched throughout 2023, an increase of 8.9% from 2022. This also marks a significant rise compared to the period from 2018 to 2022, representing 2.03 times the average number of new condominium projects launched in the past five years. The area with the highest number of new launches is the Central West Coast, particularly Bang Tao Beach and Layan Beach.

By the end of the third quarter of 2023, CBRE reported a sales value increase of over 113% compared to the total sales for 2022, with a customer base comprising 50% Thai and 50% foreign buyers. The majority of foreign customers come from Europe and Asia, including Russia, China, and the UK. CBRE anticipates that these countries will continue to be the main buyer groups in 2024. Additionally, there is a notable increase in inquiries from foreign buyers from the Middle East and India, indicating a growing interest in vacation homes in Phuket. Many foreign buyers start as tourists who fall in love with Phuket, leading them to consider investment opportunities and transition from tourists to buyers or investors. This trend suggests that the condominium market in 2024 will continue to attract interest from both Thai and foreign customers.

Ms. Prakairat further commented that the two main reasons luxury customers decide to purchase vacation homes in Phuket are for investment purposes (79%) and for personal use as a vacation home or second home (21%).

For customers buying for investment, the appeal lies in Phuket's potential, surrounded by amenities and direct flights from Bangkok and abroad. They also recognize the infrastructure development plans, both short-term and long-term, such as the expansion of Phuket International Airport Phase 2, expected to open in 2028, which will accommodate over 18 million tourists annually. Additionally, the construction of a new highway from Kathu to Patong and new overpasses will enhance Phuket's attractiveness to both tourists and expatriates working in Thailand. Currently, the expat population in Phuket ranks second after Bangkok, reflecting the demand and potential for high-end rental tenants, both Thai and foreign. The top locations sought by CBRE customers are Bang Tao Beach and Layan Beach, known for their beautiful beaches and convenient access to other areas such as Central Phuket, Robinson Lifestyle Mall, Old Phuket Town, golf courses, leading hospitals, and international schools, making them prime locations for investment and living.

The strength of condominiums for investment in Phuket lies in their rental management services, which provide convenience for investors without the hassle of managing tenants. This gives clients confidence that their assets will yield a worthwhile return on investment. When considering investment, clients often look for annual rental yields, return on investment, payback periods, and future property value appreciation. If not used for personal residence, these properties can generate passive income, with rental yields for luxury condominiums in Phuket ranging from 6% to 8% per year. The yield depends on factors such as interior design, room size, views, and services provided by the project.

For customers purchasing for personal use as a vacation home or second home, the appeal lies in the distinctive design and quality of the projects, along with the reputation of the developers. Most customers prefer vacation homes with five-star hotel services (Branded Residence), such as 24-hour concierge service and comprehensive amenities within the project.

“For 2024, CBRE believes that luxury condominiums in Phuket will continue to receive positive responses from both Thai and foreign customers looking for vacation homes for investment and personal use. Branded Residence condominiums with five-star hotel service standards and rental management will be among the top choices for luxury customers due to their convenience compared to standard projects. Additionally, if not used for personal residence, they can still be rented out for long-term profit. The return of foreign tourists to Phuket will also positively impact the vacation home market in Phuket,” Ms. Prakairat concluded.