Rental guarantees drive Phuket condo sales

phuket
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More than 80 percent of Phuket condo sales during the first six months of 2018 were at projects offering rental guarantees.

These condo sales were also priced at less than THB 5.5 million.

This is according to real estate firm CBRE in its latest market report focusing on activity during the first half of the year.

It reported that just 458 condos and 56 villas were sold during the first six months of 2018.

For condos this represented a 5 percent increase year-on-year but for villas it was a 46 percent drop over the same period during 2017.

Phuket Sales

Phuket property sales were focused on investment-orientated or income-producing products for both villas and resorts condos.

CBRE said that investors preferred Phuket resort condos because of the cheaper lump sum price combined with rental management schemes.

Despite the island’s past reliance on foreign buyers, especially those from China, Hong Kong, Singapore and Russia, it noted that the Residences at Sheraton Park Grand Bay is one project that has been successfully attracting Thai buyers.

This, is said, was a combination of branding, seas view units, price and location.

CBRE predicted there will be more hotel-branded residential developments as branded management has become a more sought-after criteria for investment buyers because of rental guarantee schemes.

Sales in the Phuket luxury segment, above THB 90 million for villas and above THB 20 million for condos, were limited but CBRE said that it remained confident that there is still interest in this sector.

One villa, at the Andara Signature Villa Hills, sold for more than THB 200 million earlier this year.

CBRE concluded by suggesting that the Phuket resort property-for-sale market will continue to be dominated by investors in the low-end price segment.

It said there is an opportunity for higher-priced products, and that the challenge for Phuket property developers is to create the right product to make buyers’ needs.

CBRE said that it believes growth in tourist arrivals to Phuket will also continue to be a key driver of demand for both the residential and hotel markets.

“The challenge for the Phuket market is to decrease reliance of the Chinese and Russian tourists, to reduce the risk from any downturn in these two key feeder markets,” it added.

Andrew Batt
The author of this article is Andrew Batt, the founder and editor of www.thailandproperty.news. Andrew has been writing about property and real estate issues in Thailand and Southeast Asia for more than 10 years. He has worked for PropertyGuru Group, DDproperty, Dot Property Group, Hipflat and AsiaRents. He has also produced content for leading Thailand property developers and real estate agencies.
Email: andrew.thailandpropertynews@gmail.com.

2 Comments

  1. Roger, the research does imply that condos without guaranteed rentals are in the vast minority of what was being sold during the first six months,

    As we have published many times, research from real estate firms does normally contain partial data of sole-agency or projects that the firm in question has been selling.

    There is nothing in the way of independent research that covers places such as Phuket, Pattaya, Hua Hin, etc, so consumers can only obtain a general idea (in most cases) of what has been happening. That’s something that Thailand must make efforts to improve.

  2. In other words condos without rental guarantees schemes are simply just not selling in Phuket.

    Coincidentally the Sheraton Park Grand Bay project just happens to have CBRE as sole agents.

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