Property Market in Phuket – future prospects

Property Market in Phuket – future prospects

Perfect weather conditions, low cost of living and famous beaches make the largest island of Thailand highly attractive for private investment capital. Stable balance of supply and demand in the same sector in Europe and Central America also plays an important role in this subject.

From the point of view of buying property in Phuket, this area of the Kingdom is multivarious. Here you can find both - villas of the premium class and affordable but very comfortable condominiums. Popularity among investors is influenced by low prices and greater profitability comparing to Hong Kong or Singapore. This, in turn, provides a greater volume of transactions per unit of capital, and such diversification obviously reduces risks while maintaining expected margins.

The development of infrastructure for water transportation – marinas, harbors and piers – attracts attention of boat owners (yachts and boats), and increases the demand for real estate. This factor also boosts the attractiveness of this place for making investments. Affordability of real estate in Phuket allows you to consider the island as a place for relaxation or a comfortable retirement. The idea of a well-deserved rest in the soft tropical climate near the sea with cheap fresh food and high standards of living at low cost becomes increasingly attractive for guests from the Old World and Australia. Another argument in favor of this island will be its great medicine: the equipping and training of the personnel in medical institutions are excellent. Direct air links with South-East Asia, Europe and Australia, combined with the explosive growth in the Kingdom's economy and natural beauty of the tropics, also have a very strong influence on investors’ interest.

Even the 2004 tsunami which caused so much damage to the island didn’t have impact on the real estate market. Many analysts and players expected a collapse, but it did not happen. Sustained attention to houses, apartments and land plots is observed in all price ranges. It has a very simple reason – the shortage of undeveloped land. To date, experts predict a steady upward trend in the segment of real estate purchase in Phuket.

The main argument for moving to Phuket for permanent living for Europeans and Russians are relatively cheap prices of a premium class housing, and low cost of all goods and services of daily demand.

According to realtors, the distribution of clients interested in buying real estate in the secondary and primary markets is correlated as the 80/20. It means that four out of five clients prefer to buy a finished villa or apartment in a condo, while one client prefers to build a house by himself. The most popular segment in terms of pricing ranges between from four-five to twenty million baht. Although more expensive, luxury real estate is also sold very well. From the point of view of the profit rate such kind of investments are the most marginal due to the difference in the price of materials, construction works and the final product, i.e. real estate itself.

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