Phuket's new condo supply nears seven-year peak

Phuket's new condo supply nears seven-year peak

New condo supply launched in Phuket this year will be the highest since 2012 with more than 6,200 units, driven by the booming tourism industry and investment from the public and private sector, according to property consultancy Colliers International Thailand.

Phattarachai Taweewong, the firm's associate director, said new Phuket condo supply and demand picked up in the first five months of 2019 in line with increasing tourist arrivals.

During January-May, there were more than 10 new condo projects launched in Phuket with a total of 2,742 units, the most in the past five years. Colliers expects 3,500 units to be launched in the second half of 2019.

As of May, there were a total of 97 condo projects with 19,767 units worth more than 69 billion baht that remained for sale.

The highest number was in Thalang district with 7,220 units, accounting for 36.5% of the total. It was followed by Krathu district with 6,525 units (33%) and Muang district with 6,022 units (30.5%).

The overall sales rate of total condo supply in Phuket as of May was 70.8% or 14,000 units sold, with the highest in Muang district (83%). Foreign buyers continued their interest in buying condos in big lots, including those from France, China and Ukraine.

Mr Phattarachai said the number of remaining condo units in Phuket bottomed in 2016 when the market had 3,034 units. But more than 7,800 units were newly launched from January 2018 to May 2019, resulting in a slight increase in unsold supply.

"Phuket's economy is driven by the rising number of foreign tourist arrivals and new investment from the government sector and private firms," he said. "This also drives condo growth in the province."

The most popular condo unit price was between 3 million and 5 million baht, followed by units priced between 1 million and 2 million baht, most of which are in the central city and launched during the past five years.

Units priced between 5 million and 7.5 million baht and those priced at over 10 million baht are other ranges with a good sales rate. Prices of 80,000-130,000 baht per sq m were the most popular in the past two years.

Locations with a good sales rate include Surin, Kamala Bang Tao, Nai Han and Rawai beaches and areas surrounding Central Festival Phuket. Most of the projects launched at these locations focused on a guaranteed rental yield of 5-7% for three years.

"These projects were popular among foreign buyers," Mr Phattarachai said. "Some had a full foreign quota and tried to offer a long-term leasehold for foreign buyers in an exceeding quota."

In the first four months this year, tourist arrivals to Phuket totalled more than 6.14 million, up 1.4% from the same period last year. Of this number, foreign tourists totalled 4.46 million, up 1.4%.

Last year Phuket recorded over 14.38 million tourist arrivals, an increase of 2.6% from 2017. The province also generated more than 477.32 billion baht from the tourism sector in 2018 and 187.72 billion baht in the first four months of 2019.

There were new projects invested in by the private sector, including retail giant Central Pattana's Central Festival Phuket Phase 3 with an investment of over 20 billion baht and a total area of 400,000 square metres on 136 rai, launched late last year.

Central Pattana is also developing a new lifestyle complex, Porto de Phuket, on 50 rai in Choeng Talay near Laguna Phuket with a total area of more than 40,000 sq m at an investment of 1 billion baht.

Targeting free independent travellers, high-spending Western tourists and local people, the new complex will open by the end of 2019.

Another retail giant, The Mall Group, is investing 10 billion baht to develop megamall Blu Pearl with a total area of 650,000 sq m on a plot of 150 rai.

Airports of Thailand is spending 14 billion baht to expand Phuket airport to support a maximum of 25 million tourist arrivals a year. Other plans include the Phuket Smart City development, a light rail transit system to operate by 2020 and deep-sea port expansion.


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