CBRE reports that foreign demand for villas and condominiums in Phuket, Thailand, is looking healthy and is helping to put the wider property market on more solid footing. Demand for entry-level and mid-market properties is also expected to increase throughout the year, although the luxury market showed signs of slowing. A large segment of buyers hailed from Europe, Australia, Russia and Hong Kong, while Thai participation in the market remained low. Development is also improving to meet wider demand and local realtors hope it will attract more Thai buyers to the market. For more on this continue reading the following article from Property Wire.
The outlook for the residential property market in Phuket, one of the most popular Thai locations for overseas buyers, in 2013 is solid with villa sales last year increasing by 20%, according to the latest analysis from CBRE.
The research shows that the number of completed villas in the fourth quarter of 2012 reached 2,789 units and demand for affordable villas will continue.
The entry level sector saw the strongest performance with 43 villas sold, while, the luxury segment showed the lowest performance with just two villas sold. However, the total value of the entry level segment around THB340 million was still less than the total value of luxury sales at THB382 million.
‘Overall, we believe that the outlook for the villa market will be positive in 2013. Demand will continue for affordable villas, especially entry level and mid range segments. Although, developers slowed down launching new villa projects in 2012, we view that villa developers will come back into Phuket villa market in 2013,’ the report says.
Sales in the condominiums and apartments sector increased by 10% in the fourth quarter of 2012 compared with the same quarter in 20122. Laguna Shores, which launched in the fourth quarter of 2012 was the best selling project with 47% sold, off plan within a few months after of the launch.
New supply from developers and market take up indicate a preference for one bedroom and studio apartments with cheaper total prices than the traditional two bedroom design, the report points out.
At the end of 2012, the average price per square meter of available units was almost THB100,000 per square meter, compared to THB92,000 per square meter at the end of 2011.
The report also shows that the price per unit of new launches in Phuket has fallen and is moving closer to Pattaya prices which ranged from THB3 to THB9 million. However, the price per square meter has risen and the firm says that this is because the unit size has been smaller and total price has been lower.
The predominant buyers were Europeans, Russians, and Australians with virtually no Thai buyers. However, there was an increasing demand from Hong Kong and Singapore buyers in 2012.
‘We believe the condominium market will become more active in 2013 because more projects. Thai developers including Amari and Sansiri are offering more affordable units and are attracting the interest of Thai buyers. Thai publicly listed developers will dominate new supply and sales in 2013,’ the report says.
The West Coast continues to be the most popular location particularly the North West Coast including Patong. Properties that offer sea views, easy access to the beach and a variety of entertainment options nearby are the most popular among buyers. Distance from the airport is also further value consideration.
There are 1,999 units in the pipeline which are expected to be completed by the end of 2015, the report adds.
This article was republished with permission from Property Wire.