Many property developers on the island of Phuket are starting to design their new developments to appeal more to international investors, according to new research from the island.
Some 91 percent of residential condominium sales in Phuket during Q2 2015 were in the entry-level price bracket, with the sector showing no increase in sales levels year-on-year from the previous sales quarter.
According to real estate firm CBRE in its Phuket Residential report, published yesterday and covering the second three-month period of this year, average sales prices on the island were THB 5 million for a 50 sqm unit.
Total completed supply of what the first described as “resort condominiums” amounted to around 5,250 units, with a further 4,000 units in the development pipeline that are expected to be completed before the end of 2017.
CBRE said: “We continue to see evidence of some Chinese (PRC) buyers in entry-level projects through Chinese property agents and Chinese-speaking sales staff on the island. However, these groups have not yet offset the decline in the number of Russian buyers on the island.”
It added that more Phuket property developers are adopting a “guaranteed rental scheme” to compete in the market.
“We expect condominiums managed by well-known hotel brands to perform better than those managed by local developers.
“Going forward, we expect slow sales and limited project launches,” it said.
Phuket property developers are designing their projects to focus more on potential investors and the anticipated demand from Chinese buyers.
“This will reinforce developers to focus on continuing to supply entry-level condominiums.”
Four projects were launched in the quarter; three entry-level and one mid-range project with mostly one-bedroom units. The number of condominium units launched during Q2 was double the number seen at the same time last year.
In conclusion, CBRE said that it continues to see evidence of Chinese investors and the return of Western expatriates based elsewhere in Asia to the market.
