A recent report from Colliers Thailand has indicated a positive trend towards recovery for Phuket’s property market after the thrashing suffered during the world economic crisis, although 2007′s boom levels have remained untouched.
The report did not discriminate between Phuket’s inland areas, containing most of the units available, and its coastal ones, where there are fewer properties, but at higher capital values. Additionally, 2010 saw one of the rare occasions when more condominium units are supplied on the market than landed properties, the usual dominants. In total, around 1,020 units were supplied during last year, with a further approximately 200 during 2011, until May. Most of these were located inland, with the Thai domestic market being the main actor in the recovery.
Meanwhile, the higher-end coastal market, where foreigners represent the main body of investors, remains short of its pre-crisis levels. According to Antony Picon, Associate Director of Research at Colliers, “depending on perspective, the current situation can be viewed either as positive or as negative, based largely on whether one is comparing the numbers of 2006-2007 or those from 2009. Nevertheless, it remains a fact that, this time round, deluxe buyers are coming from a greater variety of countries, with Hong Kong, Russia and the Middle East coming in besides Europe as key markets. This sets new challenges for the developers, who need to adapt their marketing strategies to cope with the profile changes. For example, the Kamala Falls development is currently being marketed for a Muslim market by advertising it as a halal investment which also includes a women-only swimming pool.”
Kamala and the rest of the surrounding north-west area represents a rising location for luxury development, with the Millionaire’s Mile offering large land areas for high-end property construction. As Asia is slowly turning into a major cruising attraction rivalling the Caribbean and Mediterranean, thanks to its less crowded sailing waters, therefore it will be interesting to witness Phuket metamorphosis into a superyacht marina. According to Patima Jeerapaet, managing director of Colliers Thailand, “as Asians who can afford it spend increasing sums for superyachts, Phuket’s status as an attractive sailing destination, due largely to its marinas and the wonderful islands in its proximity all show potential for enhancement, which will also help the luxury property market advance. The brand is synonymous with luxury.” The entire Phuket, Phang Nga and Krabi area looks to have the potential of becoming the world’s most important yachting destination, having Phuket as a main hub.
Another major favourable factor for Phuket is the increasing amount of international flights as a consequence of more low cost carriers advertising routes to the island. According to Mr. Picon, “although Phuket’s foreigner residential market is still short of its pre-Lehman days height, it has a good strategic position for when investors from the traditional European and US markets decide to return to complement the existing emerging markets’ growth”, with the growing number of visitors having serious potential of eventually transforming into a greater number of property buyers.