Property Demand In Phuket Surges

The Phuket Sandbox program brought life to the island which had been forced to rely only on domestic tourists since the pandemic started.

Tourism Authority of Thailand (TAT) reported that between July 1 and October 31, 59,689 foreign visitors visited Phuket under the Sandbox program. While this is a small number, it represents the start of preparations for the country’s full reopening and the impending peak season. The residential market has also experienced a surge in demand since traffic has returned to the island.

“The entire Phuket residential market has shown a strong uptrend with the reopening of the island under the Phuket Sandbox scheme,” said Prakaipeth Meechoosarn, property head of CBRE Thailand. “The majority of our queries during the lockdown period have been from Thais searching for a vacation or second-home homes. Following the establishment of the sandbox model, inquiries were broadened to include foreigners in the country, expatriates, and international visitors.

“This has led us to conclude that the scheme has aided in the reintroduction of returning customers who have been eyeing homes for years but have been unable to go owing to border constraints. However, investors have not yet returned in full force because of concerns about the global economy and the rental market.”

Initially, the Phuket residential market was seen as a market for foreigners, but that has changed. In recent years, residential property supply has increased to meet a larger target market such as expats and locals.

As the effect of the pandemic, the residential market was reset in 2020 to become more of a buyers’ market, with more negotiated alternatives and possibilities available in some places. Developers have been waiting to sell their remaining supply on the island.

The ultra-luxury market has been busy both in terms of resales and selling the developer’s remaining properties. Due to the rarity of great beachfront property with sea views, this category has seen few new developments.

At the moment, we are witnessing a trend toward buyers choosing ready-to-move-in houses because they provide a sense of security, particularly when they can examine the property immediately.  Individuals are attempting to utilize the homes as a safe haven throughout the pandemic.

Buyers are especially attracted to units with sea views, beachfront locations, and contemporary designs.

Despite rising demand, home supply in Phuket is restricted and scarce, with just a handful of new developments constructed in the last two years due to the effect of the COVID-19 pandemic.  As per CBRE Research, the total number of newly released units – villas and condos combined – declined by 98 percent year on year in 2020 and another 34% in the first half of 2021.

Demand for luxury projects in ideal Phuket locations remains strong, prompting some developers to refrain from offering large discounts. This is one reason why ultra-luxury prices have quickly rebounded after falling during the early stages of the pandemic.

Going forward we see that if travel restrictions are loosened, more foreign visitors and investors will explore purchasing holiday properties on the island.

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Source: Bangkok Post