Phuket's shifting property landscape

Several key factors, including a broadening of the traditional demand and the introduction of top-notch developers, are coming together to signal a market upswing on the resort island

Phuket's resort residential sales market has moved in phases since the 1990s but has experienced a slowdown since the 2008 global crisis, given the market's dependence on foreign demand. The market now appears ripe for another positive phase of development, which is being characterised by changes in the key players, the product and also buyer profiles.


Smaller foreign developers dominated the market before 2008. These developers were generally less well funded and relied on buyers' deposits for construction. Since the global crisis, these developers have found it difficult to survive in a competitive market with weaker buying demand; consequently many projects were suspended or put on hold.

Today, the market is driven by larger-scale professional developers, both Thai and foreign, many of them publicly listed Thai companies. The shift in key players is an important element that is helping to raise the level of professionalism.

Many Thai developers have had interests and launched developments in Phuket. For example, Supalai, SC Asset, Sansiri, Land & Houses and Plan Estate have all been involved in the Phuket market, but their primary focus has been affordable mass-market products which primarily target local buyers and not the resort home market.

This year, many established Thai developers have turned to Phuket and, in particular, the resort home market. They include Sansiri and Amari Estates (a subsidiary of Italian-Thai). Both will soon be launching condominiums that will predominantly target foreign buyers.


Along with the shift in key players, growing tourist numbers also mean greater potential for new groups of resort property buyers. The new range of buyers from destinations such as China and Russia bear this out. Buyer profiles will also be influenced by direct accessibility from new destinations. For example, Emirates will begin operating direct flights from Dubai starting on Dec 10. This is in addition to Qatar Airlines' direct flights from Doha. With convenient access from the Middle East, this segment will make up a more significant proportion of the island's tourist arrivals, and possibly future demand for residential properties.

Based on inquiries generated, CBRE has been tracking the shift in buyer profiles and is seeing the growing importance of Asian buyers, as opposed to the European markets which previously made up a significant portion of Phuket's demand.

While Phuket will continue to be driven by foreign demand, there is a growing opportunity for developers to tap into the Thai market. Aside from products targeting the mass market, there has been limited Thai interest for resort homes in Phuket. However, this may be about to change as key Thai developers are entering the market. These developers will bring an extensive Thai client base that may not have previously considered purchasing property in Phuket otherwise. For example, Sri Panwa's initial phase in 2004 attracted many Thai buyers, mainly on the back of developer Charn Issara's established reputation in the Bangkok market.

In addition to the constantly evolving buyers' profile, affordability has become an important consideration for buyers, particularly in the resort condominium market. Tracking CBRE's inquiries, we see stronger demand for homes in the price range of five million to 15 million baht.


Having the right product which is well designed and competitively priced will be the key to capturing the new wave of Phuket demand. Given that affordability is an important consideration for buyers of resort condominiums, the unit design and sizes of newer products tend to be affordability-driven. Units are more compact, following the Pattaya and Bangkok development model, although still larger than the averages in these cities' markets to reflect Phuket buyers' requirements.

One upcoming Phuket project to look out for is Amari Residences Phuket. Following the success of Amari Residences Hua Hin, the developer will soon launch one- and two-bedroom residences located on one of Phuket's most prime sites overlooking Patong Bay. The project will offer compact unit sizes, ideal both as an investment and lifestyle product.

At the top end of the market, multi-million dollar luxury villas remain a niche for the ultra-rich. The product designs continue to be opulent, with features such as private lap pools, expansive indoor and outdoor living areas, luxurious master suites and multi-purpose rooms being prerequisites.

Some of the top-end luxury developments in the pipeline include Rosewood's branded villas to be developed by Hong Kong's New World and located on Emerald Bay, Patong. Following the acquisition and rebranding of Bundarika Villas & Suites in Layan by Anantara, the Minor Group is also planning to develop 17 to 20 Anantara-branded luxury villas to be priced between US$3 million (92.1 million baht) and $5 million each. In the same area, Kajima's luxury villa project is also currently in the planning stage, with a road network and infrastructure now in place on site.


The west is clearly still the best. While prime west coast sites are scarce, projects launched in these locations will continue to do well as it remains the key area sought after by resort property buyers. West coast areas from Karon up to Bang Tao have been the core areas for residential developments. Today, the areas north of the airport such as Mai Khao are playing catch-up.

The development of Mai Khao is to some extent similar to Bang Tao with the launch of Laguna Phuket, but in a more advanced phase given that the area already has a number of established five-star hotels including Anantara, JW Marriott and Renaissance. As an area for residential resort homes, Mai Khao is just emerging with the recent acquisition of a new development site by Sansiri.

As the high season is kicking in on a positive note, both in terms of exciting new launches and ever-growing tourist arrivals, we believe this upbeat trend will continue into 2013.

Aliwassa Pathnadabutr is the managing director of CBRE Thailand. She can be reached at; Twitter: @CBREThailand; Facebook:

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Writer: Aliwassa Pathnadabutr