Phuket housing market still robust

The Phuket residential market is expected to remain robust in 2024, with prices projected to increase by 10-15%, driven by Russian demand and an anticipated return of Chinese buyers in the second half, according to property consultant CBRE Thailand.

Prakaipeth Meechoosarn, head of Phuket property sales, said residential prices in Phuket surged 10-15% in 2023, exceeding typical growth of 5% and was the highest increase on record.

“When sales are very good, developers will usually raise prices,” she said. “Some projects saw an increase of up to 30% last year because of their unique concept, good locations and high demand.”

Ms Prakaipeth said 2023 was the peak year for the Phuket residential market, witnessing a fourfold increase in overall sales compared to the average. Sales of resort villas reached 400 units last year, a significant rise from the typical 100 units per year.

Meanwhile, sales of condo units soared from 500-600 per year to 2,000 last year.

“The booming residential market began during the Phuket sandbox in 2021 which drew foreign travellers with high purchasing power, many of whom bought luxury villas and condos in great numbers,” she said.

However, available units at the time were not sufficient, prompting developers to launch new supply in 2022, so when more projects and units were launched, the market saw its peak year in 2023.

The majority of buyers were Russians, accounting for 70% of all nationalities. Mostly with families, Russians bought large-sized units with 3-6 bedrooms, priced 20-60 million baht for villas and 5-10 million baht for condos.

Their preference didn’t necessarily include a sea view, but required proximity to communities, food outlets

The upward trend in Phuket residential prices is expected to continue in 2024, with 10-15% growth. PRAKAIPETH MEECHOOSARN Head of Phuket property sales, CBRE Thailand

and amenities. Many relocated their children here and they enrol at international schools in Phuket.

The second largest nationality of residential buyers in Phuket last year was Chinese, who need a short-term or temporary stay, mostly purchasing units as holiday homes.

The third group consisted of Europeans who looked for large-sized units in small-scale projects with a limited number of units and sought holiday homes that could be rented out while they were away.

“We may see the comeback of Chinese buyers in the second half, especially after the reciprocal visa-free policy starting from March 1,” said Ms Prakaipeth.

“The upward trend in Phuket residential prices is expected to continue in 2024, with 10-15% growth,” she added. “However, with a lot of new supply slated for this year, it will be more challenging for price hikes.”

Some of the new supply being launched will also come from listed and Bangkok-based developers who saw huge opportunities in the Phuket market and entered this market last year.

“These developers come with their customers who are Thais,” she said.