Phuket property market is strong despite floods

PHUKET: Samma Kitsin, director-general of the Real Estate Information Centre (REIC), said recently “The floods last year are having a lingering effect on home-buyers’ decision-making this year.”

But demand for homes in tourist destinations, especially Phuket, is still strong, according to a survey by the Agency for Real Estate Affairs (AREA).

Samma said most home-buyers who are considering projects in the capital and its suburbs are concerned about location.

Their target may change from single family homes or townhouses to condominiums at places that have never experienced flooding. Those neighborhoods that escaped the floods will be their first choice.

Developers with land in flooded locations will have to revise their projects before introducing them to the market. That will take three to six months.

Developers who do not own land in flood-hit locations will not buy land close to those locations.

The property market in the first half will show stable or slight growth, but will recover in the second half after adjustments are made and the government comes out with a clear policy to manage floods, he said.

Last year, 340 residential projects were launched with 84,000 units, of which more than half or 44,000 units were condos and the remaining 40,000 units were low-rises. The low-rises were divided into 19,000 townhouses, 16,000 single family homes and 15,000 duplexes and shop houses.

REIC estimates that transfers of both new and resale residences in Greater Bangkok last year would reach only 135,000-140,000 units. That would be a drop of 21-24 per cent from 178,000 units in 2010.

President of AREA, Sopon Pornchokchai, said that although the Greater Bangkok market was soft, demand for vacation homes in resort areas like Phuket was robust, especially from foreign investors interested in owning a second home.

The company surveyed residential project launches in Phuket last year and found 114 projects with 6,216 units worth 91.41 billion baht. The average price was 14.7 million baht.

— Phuket Gazette / The Nation