Phuket: Luxury real estate boom and attracting global investment!
Developers and the hospitality sector continue to actively construct luxury real estate in popular resorts to meet the growing demand from international guests.
Today, all roads in real estate lead to Phuket, driven by the purchasing activity of tourists flocking to Thailand after the normalization of the Covid-19 situation.
The rapid economic recovery of Phuket in 2023 resulted in tourism revenue amounting to 388.017 billion baht and attracted 11.3 million tourists. Government plans for infrastructure development, including improvements to the transportation network along the Andaman coast, further strengthen Phuket’s position.
In the first quarter of 2024, major development groups have already invested over 56 billion baht.
Prasert Taedullayasatit, President of the Thai Condominium Association, describes the real estate market in tourist cities as "global property."
"The government should prioritize real estate development to support the economy, creating over a million jobs and primarily utilizing local resources. This could expand the country's economy by 2.9 times, contributing 8-12% of GDP," he noted.
According to Phattarachai Thavivong, Director of Research at Colliers Thailand, 12 new condominium projects with a total of 3,338 units, valued at 25 billion baht, launched in Phuket in the first quarter of 2024. These projects were developed by leading Bangkok developers in collaboration with local partners such as Sansiri, AssetWise, Origin Property, and others.
The Phuket condominium market has seen significant growth: previously, an average of 2,000 to 3,000 units were launched annually, but in 2024, over 8,500 new units are expected due to the rise in tourism and government support.
Currently, there are over 87 projects on the island, comprising 25,591 units, of which 16,905 (66%) have been sold. Foreign buyers account for 49% of total sales, with long-term lease schemes offered to enhance market appeal.
According to a C9 Hotelworks report, the expansion of Phuket’s tourism industry has spurred the construction of new branded residences, with investments already exceeding 80 billion baht, and the growth trend continues. There are currently 26 such projects with 4,258 units, of which 3,283 are available for sale.
"With the revitalization of the tourism sector, Thai companies are once again investing in Phuket. Demand for luxury residences has increased among both local and international buyers, who view Phuket as a secure investment," noted Bill Barnett, Managing Director of C9 Hotelworks.
After a hiatus in lending during the pandemic, Thai banks have resumed financing hospitality projects, leading to a market revival. Developers are also incorporating hotel brands into their projects, enhancing property value.
"The rising cost of land forces developers to leverage hotel brands for management and the sale of residences," Barnett added.
Yuthachai Charanachitta, CEO of Onyx Hospitality Group, announced plans to build 4-5 hotels in Phuket over the next 3-5 years and transform them into branded residences. Additionally, the company is collaborating with Malaysian investors who have chosen Phuket for their business expansion in Thailand.
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