The majority of Phuket property buyers are active at the lower end of the market.
Real estate firm CBRE, in its H1 Phuket Residential research report, published yesterday, noted that some 90 percent of resort property sales were in the lower-end segment.
CBRE notes this as being between THB 5 million and THB 35 million per unit for villas, and below THB 8 million for condominiums.
They noted that sales in H1 were driven by Phuket property buyers and investors seeking rental returns of between 5 percent and 7 percent for between two and five years.
CBRE reported that expatriates of many nationalities working in Asia, and some wealthy Thais from Bangkok, have continued to be the main buyers of Phuket’s resort properties.
Russian buyers started to return with the appreciation of the Rouble against the Thai baht.
Chinese investors were also showing interest in certain entry-level projects. Sales, is said, came from buyers who bought multiple units, buying at bulk prices and hoping to resell.
Phuket property buyers at all price levels were seeking rental income, using the property for their own stay for less than 60 days per year. CBRE expects most of the future projects to be launched will focus on buyers purchasing for investment.
“We believe the Phuket villa market will continue to shift towards income-producing properties rather than vacation homes. However, buyers must consider the viability of the rental program of each project before making a decision,” CBRE reported.
There was a significant improvement in the sales performance of the Phuket Villa market, with a total of 103 villas sold in the first half of this year compared to only 72 villas sold in H1 2016.
This number was the highest sales rate in two years.
Sales of condominiums decreased 11 percent year-o-year to 437 units during H1 2017.
Condominium buyers preferred either studio- or one-bedroom units measuring between 30 sqm and 50 sqm. At least 75 percent of condominium sales came from projects offering some form of yield guarantee.
The higher end of the property sector, with prices above THB 15 million per unit, was relatively stable with 35 units sold in H1 2017.
There were 122 condominium units launched during H1 2017, Most were entry-level units priced below THB 8 million per unit.