Russians overtook Chinese as Phuket condo kings in Q1

A leading Thai real estate consultancy firm revealed Russia was the No.1 country for buying apartments in Phuket in the first quarter of 2022, with 74 properties worth 245 million baht.

China was previously the Phuket condo kings but thanks to the mainland’s zero-Covid-19 policy, the former Soviet state has surpassed Chinese buyers in the holiday resort, with Q1’s total topping the entire year of 2021.

Nattha Kahapana, managing director of property consultant Knight Frank Thailand, says since the beginning of 2022, the Phuket apartment market has experienced an increasing trend, pushed by international purchasing power, mainly Russian property speculators.

“Russian investors started to return in late 2021 and became the main purchasing power during this period. However, the overall condo market in Phuket may need some time to recover.”

Chinese nationals bought 66 units, while Russians bought 54 units last year. The Chinese were originally the largest investors in the Phuket real estate market, but investment has dropped because of Chinese border controls and limits on foreign money transfers.

“The Russian market, however, slowed while political conflict escalated (in Ukraine). If both Chinese and Russian buyers return, they will help give developers confidence because they have the potential to help the Phuket condo market recover faster.”

Last year, about 90% of the units sold were to Russian buyers with some Chinese and European investors. The other 10% of apartments were sold to Thais who wanted to use them as vacation homes.

The average asking price for an apartment in Phuket is dictated by it’s location and view. The average selling price of units with sea views is 196,00 baht per square metre, an increase of 1.6%

Apartments without a sea view are cheaper, costing 76,526 baht per square metre, an increase of 0.45% from 2020.

For more than 2 years, coronavirus has had a massive impact on the number of travellers visiting Phuket. Property developers were forced to pause their new releases so they could sell their remaining units.

Foreigners are drawn to apartments in Phuket because they can use their investment for both personal vacation getaways and rental income.

The real estate market in Phuket has become slow over the past 2 years because of the downturn in tourism, which has had a significant influence on the local economy. Tourism and foreign investors came back to the resort when the Phuket Sandbox was introduced.

The Test & Go scheme also made it easier for international tourists to enter Thailand, boosting Phuket’s economy. This had a good effect on the country’s real estate market.

“The revival of the condo market in Phuket still faces challenges from economic factors tied with tourism. However, the tourism situation started to improve from the previous Test & Go period”.

SOURCE: Bangkok Post