Return of Russian, Chinese buyers sparks Phuket real estate boom
Leading independent real estate agent and consultancy Knight Frank sees strong demand for property in Phuket, in southern Thailand, due to the return of Russian and Chinese buyers, driving prices up by 15-20% in some areas.
Nattha Kahapana, managing director of Knight Frank Thailand, said at a press briefing on Monday titled "Knight Frank Foresight 2023: It's time to look beyond the crisis" that the return of demand was clearly seen during the fourth quarter of last year.
However, not all real estate is promising.
Pool villas in western Phuket are in high demand among foreign buyers, with Russians acquiring 40-60% of the total sales, a 10-15% increase from pre-pandemic levels.
He singled out Kata, Karon, Patong, Kamala, Nai Ton and Bang Tao beaches as favourites of buyers, and Cheng Talay Lagoona, as they are long, private and famous beaches that combine a calm atmosphere on the western side of Phuket. As a result, real estate prices in these areas have risen by about 15-20%, compared to an average increase of 3-5% in other parts of the province.
According to Knight Frank research, demand from Russians is expected to remain high for the next 1-2 years. The top three factors for them in deciding to buy are: location, price, and trustworthy developers.
The report also discovered that Chinese buyers are on the rise. However, while Russians purchased property in order to rest and relax, Chinese investors are looking for real estate to serve their own people.
Although sales of Phuket pool villas are on the rise, the condominium market has yet to recover fully. Condominium sales in 2022 tumbled from 78.3% the previous year to 76.9%.
He estimated that the Phuket condominium market would return to pre-pandemic levels within a couple of years.
Knight Frank's assessment is consistent with the latest Phuket Real Estate Association report, which showed that all finished condo units and villas with pools had been sold out.
The president of the Phuket Real Estate Association, Phattanan Phisutvimol, said that the increase in sales of condominiums and luxury villas began after the Covid-19 pandemic receded last year.
She believes that this year will be remembered as the "golden year" for Phuket's real estate market, and the trend will continue.
Frank Khan, executive director and head of residential, added that Thailand's overall real-estate outlook is positive due to the tourism industry's recovery, which has helped boost domestic demand.
Meanwhile, having a general election boosts overall country sentiment, making people more confident to spend.
He said the strong demand in real estate, particularly in residential, is still in the premium segment, with prices starting at 10 million baht.
However, because their primary market is the local market, he said that affordable condominiums priced under 2 million baht on Bangkok's outskirts can maintain consistent demand.