Russian, Chinese investors drive Phuket property market
The Phuket property market is on fire now, with the help of Chinese and Russian investors. Chinese buyers are reportedly increasing their investments, buying up villas, shophouses, and even orchards, to cater to Chinese tourists. Russian property investors are also contributing to the surge in demand for villas and homes in Phuket.
While Russians are interested in buying pool villas, Chinese investors like every type of property to offer complete service to Chinese tourists. They will bring tourists and provide housing, restaurants, shopping, and even tours of durian orchards.
According to Nattha Kahapana, the managing director of property consultant Knight Frank Thailand, we can expect more in the coming months.
“Russians are buying real estate in Phuket to live. They intend to buy immediately as they want to start moving in right away. More Chinese investors are expected to come to buy seven-eight months after the flow of tourists.”
The Phuket Real Estate Association reports huge demand, saying all finished condo units and villas with pools had been sold out. As Covid subsided, sales of condos and luxury villas began to steadily grow.
The president of the association suggests that 2023 will be considered a “golden year” for Phuket’s real estate market, and the trend will continue. They expect another year or two of high demand from Russians, looking for the best location and price from developers they can trust.
Russian buyers have increased 10-15% over pre-pandemic levels and now account for 40-60% of total pool villa sales in western Phuket. Due to this, while real estate values around the province have jumped 3% to 5%, western Phuket has seen prices spike 15-20%.
Buyers are aiming at villas in Bang Tao, Cheng Talay Lagoona, Kamala, Kata, Karon, Nai Ton, and Patong beaches as they are famous and long beaches that offer privacy and a serene atmosphere.
The market for Phuket pool villas is thriving, but the condominium sector has not fully recovered. In 2022, condo sales dropped to 76.9% from 78.3% in the previous year. However, Knight Frank projects that the Phuket condo market would regain its pre-pandemic levels within the next few years.
In Bangkok, the rental apartment market has exploded as well in the first quarter of this year. In locations from Ploenchit to Ekamai, rental units are fetching more than 50,000 baht per month. Occupancy of apartments in this location recovered from 10% during the pandemic to 40% now.
Frank Khan, executive director and head of residential for Knight Frank says the global business market is helping fuel the surge in rentals. He sees this as a good sign for the rental market for the remainder of the year.
“Many multinational companies and their executives are coming back, particularly expatriates from Singapore, Taiwan, Hong Kong and Malaysia. The condo market in the second half of 2023 will have strong growth, with the key drivers the General Election and a new Cabinet likely named by the third quarter.”
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