Phuket Property – First Quarter 2024
The first quarter of 2024 has seen a significant boost in Phuket’s property market with the launch of 25 new projects, introducing 4,000 units valued at 54 billion baht, averaging 13 million baht per unit. The majority of these developments, worth 45 billion baht, are vacation condominiums in the Thalang District (source: Sopon Pornchokchai, Thai Real Estate Research and Valuation Centre, reported by Star Media).
Over the past year, Phuket’s real estate market has been robust, with 10,000 units sold, generating 90 billion baht. Vacation condominiums and villas have strong sales, while properties aimed at Thai residents have seen slower movement. As of Q1 2024, there are around 500 real estate projects on the market, comprising 72,000 units with a total value of 460 billion baht. About 62,000 units have been sold, leaving 10,000 units available for purchase, highlighting strong demand for villas and vacation properties, especially in the Thalang District.
Market Trends and Buyer Preferences
The Phuket property market is seeing increased competition between off-plan property sales and the secondary marketplace. According to C9 Hotelworks, from January through April 2024, resales accounted for 68% of transactions, showing a substantial shift in buyer preference compared to the previous year when primary and secondary sales were evenly balanced. Single-family home resales now make up 70% of transactions.
While condominium sales remain robust, transaction values have decreased by nearly a third, with entry-level units and midscale developments in high demand. Single-family home transactions in the secondary market are surging, though at lower sales values due to lower-priced resales. This dynamic is expected to pressure developers to compete with resales.
International and Domestic Market Dynamics
The top international markets for Phuket condominiums in early 2024 are Russia, the UK, the US, France, Australia, and Italy. Single-detached homes are primarily bought by buyers from the US, UK, Russia, Australia, Italy, the Netherlands, France, and other Eastern European countries, with India emerging as a growth market. The Thai segment has also posted gains across all property classes this year.
Developers are concerned about a potential slowdown in demand from Russian buyers as Phuket moves out of the peak winter holiday period. Additionally, strict enforcement of laws prohibiting the use of nominees within Thai companies by foreign investors to own freehold villas has caused a shift towards leasehold villas and freehold condominiums.
Investment Opportunities
With many new properties expected to be completed throughout the year, mostly at premium price points, there is an increasing gap between the values of new developments and older properties. This is anticipated to create upward pressure on the pricing of new developments and foster a more competitive market driven by the expanding secondary sales landscape.
For those looking to invest in Phuket’s property market, now is an ideal time to explore opportunities, particularly in villas and vacation properties. The market dynamics suggest strong potential for appreciation, especially in prime locations like the Thalang District. Whether interested in a vacation condominium or a single-detached home, the diverse range of options and favourable market conditions make Phuket an attractive destination for real estate investment.
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