Did the Sandbox impact on Phuket’s property market?

property newOver 42,000 travellers, in the months from July 1 to September 30, used the Phuket Sandbox as an international gateway to enter Thailand. For the island’s broad real estate sector, which has been challenged by the drawn-out, 18 months of the pandemic there have been a series of notable pivots within the residential property sector.

With investment-oriented, yield-focused hotel residences on the backburner as tourism numbers dwindled, and high-value villa rentals unable to participate in the Phuket Sandbox SHA Plus hotel program, property trades have moved mainly by domestic buyers and sellers.

According to newly released data from Thai property marketplace FazWaz, from their Insights data app, there has been a notable lift in transactions of single-family homes in the price band of 8 to 18 million Baht. Comparing buyer interest between 2020 and 2021 for luxury properties above the 24 million Baht marker, 4 bedrooms or more have become the most popular home type with a 16% increase year-on-year.

Speaking about the shift to bigger and more expensive homes, FazWaz CEO Brennan Campbell said they were receiving an overwhelming response to well-located properties in quality estates.

“Demand levels are outpacing supply, given many developers postponed or slowed-down construction on projects early in the crisis and are now trying to play catch-up.”

Another shift highlighted in the FazWaz Insights data is in the condominium tier, where previously red hot entry-level studio and one-bedroom units that commanded 71% of buyer interest last year, have now tapered down to 55%. On the flip side, 2-bedroom have moved up from 20% to 32%.

Brennan is quick to note that Covid-19 placed more demands on property owners to now work from home.

“Flexible, larger spaces have now shot to the top of the list of priorities. We are also seeing buyers trade-up to two-bedroom condos to accommodate their lifestyle changes.”

Taking a step back to talk about luxury property transactions, James Knowles, Director of Residential Sales at the Minor Hotel Group has spent most of the pandemic selling ultra-luxury resort homes to wealthy Thai buyers in Phuket.

Talking about the shift in buyers from the legacy of the overseas high-net-worth individual to Thai’s he points out that their Avadina Hills by Anantara saw a surge in Bangkok buyers.

“Transactions are now hitting the 3 hundred million Thai baht level for resort estate properties.”

“Aside from sprawling ocean views, privacy and the added attraction of a hotel next door, a new object of desire for prospective owners are spaces left as cold shell areas, where customised rooms, areas or facilities can easily be added in the interiors of the mega villa structure.”

“These spaces have allowed buyers to become more engaged and express their ideas while maintaining the overall integrity of one of Phuket’s most exclusive gated communities.”

Looking toward the remainder of 2021, the Phuket property Sandbox is anxiously awaiting the return of the winter Russian ‘snowbird’ market of long-stay travellers. With the Sputnik vaccine approved by Thai authorities, the period of November to March is expected to see a spike in Russian arrivals.

Speaking to local sources, Eastern Europeans are a well-established source of property buyers, especially in the affluent Laguna area and premium renters of villas along the expansive western coastline. For now, despite the downturn, developers and agents view this as the first step back to a more balanced island real estate industry.