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Russians, Asia-based expats drive boom in Phuket demand

August 17, 2011

A surge in interest from Russian buyers and expats working in Hong Kong and Singapore has seen property sales in Phuket speeding up. While buyers from more traditional markets such as the UK are still feeling the sting of the global financial crisis, these new customers are picking up the slack, according to the Bangkok Post.

Absolute Nakalay Beach Resort and Spa

Piya Sosothikul, managing director of Erawana Co (a Phuket-based developer), reported that local demand is minimal, but sales for the first two quarters of 2011 are up 25 per cent YoY. Mr. Piya hopes to see the market remain solid for at least the next year to 18 months, but is not confident of a return to the peak of 2006, when sales topped THB10 billion (US$334.31 million).

Besides still-weak economies in North America and the EU, a potential return to form is being further hampered by a lack of consumer confidence. Many buyers who paid substantial down payments are unable to get refunds on their villas and condos, as 29 projects out of a total of 168 have failed.

This will further delay the total recovery of Europeans who were the big buyers before the economic and financial crisis hit in 2008.

Mr. Piya said his company would launch 15 villas at Tanode 3 in the Laguna area worth THB300 million (US$10 million) by the end of this month.

Erawana launched the five-villa Peykaa, in which villas are worth THB1 million (US$33,400) each earlier this year. Currently it has sold 20% of both projects and expects to have in the neighborhood of THB200 million (US$6.68 million) in sales per year.

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