Skip to content

A market shift in Phuket condomunium buyers

September 30, 2011

The market for mid-priced condominiums near, but not on, the beach has been active in Phuket since last year, with more affordable units aimed at buyers from Asian countries who have replaced Western buyers.

Absolute Twin Sands is a stunning resort with panoramic ocean views, contemporary apartments and five-star service, all in a spectacular peninsula setting on the tropical island of Phuket.  Nestled between two perfect white sand beaches, every one of the 45 apartments and penthouses enjoy breath-taking views of the Andaman Sea.  The suites, available as studio, one and two-bedroom, combine the best of contemporary design, architecture and furniture to create a comfortably chic holiday retreat.

Risinee Sarikaputra, an associate director for research and valuation at the property consultant Knight Frank Chartered (Thailand) Co, says the emerging buyers are Indian and Chinese expatriates working in Singapore and Hong Kong, as well as Middle Easterners.

”This is a new trend in the Phuket property market right now,” she said after a visit to Phuket in mid-September. ”But these new buyers’ money is not as much as that of buyers from European countries.”

The new buyers do not demand as large a unit size as Westerners who usually visited the island as a family. They also care less about location than affordability.

Beachfront condominiums are usually priced at 10 million baht or more for a unit. Most of them are larger with two or more bedrooms. These kinds of units are not preferred by buyers from Asian countries, for whom the housing budget is a priority.

Ms Risinee says demand for villas in Phuket has shifted to complete units, as buyers have no confidence in off-plan projects. After the 2008 financial crisis, many villa projects were suspended, especially those developed by Westerners who needed to pull money back to rescue their investments at home.

At the same time, some luxury villas and high-priced condos faced financial problems after their customers, most of whom were Westerners, were unable to pay for reserved units.

For example, Istana launched in 2008 and relaunched this year, recording 50% sold from 19 units priced at US$4.25-6.25 million. The project was possibly waiting for customers to return to the market.

An off-plan villa project previously offering four- to five-bedroom units resized to one- and two-bedroom units and offered a rental guarantee programme of 60,000 baht a month to attract investment buyers.

”The best sellers are units priced below 15 million baht,” Ms Risinee said. ”Most buyers take them with an investment purpose. It’s a buyer’s market now. If a project does not offer a discount, it increases the rental yield for buyers.”

She says at least one project is acting as a bank itself by offering mortgage loans to customers who would pay monthly instalments directly to the developer. This strategy applies when a project is almost sold out and the developer needs to close sales as soon as possible.

According to Knight Frank’s research, newly launched villa projects in the first eight months of the year included seven projects with 89 units worth approximately 1.4 billion baht, compared with six units from one project worth 1.2 billion baht launched last year.

New condominium supply in beach areas totalled 1,105 units from eight projects worth 8.84 billion baht, compared with 131 units from three projects worth 1 billion baht launched in 2010.

Most of the new condominium supply offers units with studio, one- or two-bedroom plans with starting prices of 1.2-4.9 million baht. More than half of the projects were developed by Thai developers and some by British.

Advertisements
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: