Phuket’s property market is recovering from the Global Financial Crisis but has yet to bounce back to the boom levels of 2007, a recent report from Colliers Thailand has found.
The report made not of the distinction between inland areas of Phuket, which contain the vast majority of units, and the coastal areas, which contain less properties but have higher capital values. 2010 was one of the rare years when more condominium units were supplied than landed properties, which usually dominate the market. Around 1,020 units were supplied for 2010 while up to 200 units were supplied up to May in 2011. Most of the units are located inland and at present and the Thai domestic market is the main driver.
The high end coastal market, which is dominated by foreigners, has yet to return to its peak before the financial crisis. “In many ways the glass at present can be perceived as half full or half empty depending on whether you are comparing with the period around 2006-7 or the situation in 2009,” said Antony Picon, Associate Director of Research at Colliers. “High end buyers are coming from a wider range of countries, not just Europe, with Hong Kong, Russia and the Middle East becoming key markets now,” he added.
Developers are reconsidering their marketing strategies to suit the changes in buyer profile. “One development called Kamala Falls is being marketed as a halal investment, including a women-only swimming pool, in order to appeal to Muslim buyers,” said Picon.
In fact Kamala and the surrounding area on the North West coast is the up-and-coming location for high end development. Millionaire’s Mile contains plenty of land available for future development of luxury properties. An interesting prospect will be Phuket’s future as a marina for superyachts. Asia is fast becoming a cruising destination to rival The Caribbean and Mediterranean with less crowded waters in which to sail. “Wealthy Asians are now a strong buying force for superyachts and Phuket’s status as a renowned yachting destination through its marinas and exotic outlying islands could be enhanced through further development and boost the high end property market still further,” said Patima Jeerapaet, managing director of Colliers Thailand. In fact the whole area encompassing Phuket, Phang Nga and Krabi could evolve as the world’s premier yachting destination in the future with Phuket as the main hub. “The Phuket brand stands for luxury,” said Patima.
One other important factor in Phuket’s favour is the growing number of international direct flights especially as result of the proliferation of Low Cost Carriers. Mr Picon believes this leads to greater numbers of tourists coming to Phuket which will eventually translate into property buyers. “The residential market in Phuket for foreigners has yet to return to the pre-Lehman days but it is well positioned when buyers from the traditional markets in Europe and the United States return to compliment to growth of the emerging markets,” he added.