Phuket real estate: factors affecting demand
Autumn and winter are considered the hot season for the market in Thailand, primarily due to tourists. However, this year the real estate in Phuket was in demand in the summer. Demand for housing is actively growing, especially on the part of the citizens of the sanctioned countries. The number of requests from them this year increased by 190% compared to previous periods.
It should be noted that before 2020 foreign investors were interested in real estate in Phuket primarily as a source of income. The demand then was for traditional options for investment, such as apartment hotels and condominiums. Deals with such real estate accounted for 85% of the total volume in the local market. However, this year trends have changed, now most foreign investors are considering the purchase of objects for their own use. The share of such transactions in the Thai market is 50%.
Demand among such buyers is villas with 3-4 bedrooms or large apartments. In this case, the distance from the sea does not play a key role in the choice, investors pay important attention to the infrastructure and comfort of the area, where the housing is located.
Most purchases are made in the early stages of the project, and by the time of active construction, almost all apartments and villas have been sold. Demand for facilities in Phuket is extremely high, for example, all apartments in the new project were sold in just 2 weeks.
Most of the new buildings are located in the Laguna area, near two beaches. This location is the most prestigious in Phuket and is developing actively. The area has recently opened 2 new shopping centers and increased the number of parks and playgrounds.
Demand has also increased for rentals: as in the sale sector, homes and spacious apartments are in demand here. There is more activity in the secondary housing market, although before this year it showed moderate dynamics.
During the pandemic, rental rates seriously sagged, but now the sector has recovered to the indicators of 2019 and even exceeded them. At the same time, demand prevails over the proposal. The geopolitical tension in the world, namely the conflict in Europe, which has forced a huge number of people to leave a number of countries and move to safer places, contributes to market activity. However, among the newcomers, there are many Europeans who have decided to change the familiar region for the eternal summer.
The supply in the short-term rental sector in Phuket is limited, as most properties are rented for a long time. As for returns, in this case, investors can get 8-10% per annum, renting a villa for long-term residence.