Chinese crucial to Phuket in Q4
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Chinese crucial to Phuket in Q4

Condo sales depend on mainland market

A tourist relaxes at Karon beach. Mr Nattha says the Phuket condo market reached a sales peak last year. Achadtaya Chuenniran
A tourist relaxes at Karon beach. Mr Nattha says the Phuket condo market reached a sales peak last year. Achadtaya Chuenniran

August will be a critical month to gauge the number of Chinese tourists in Phuket during the fourth quarter, as the condo market on the island is projected to have the highest launch of new supply in its history.

Nattha Kahapana, managing director of property consultant Knight Frank Thailand, said tour agents from China typically visit Phuket in August to explore accommodation and survey tourism-related products in preparation for China's Golden Week in October.

"The arrival of Chinese tour agents next month will indicate whether tourists from the mainland will visit Phuket in the fourth quarter," he said.

"Their return means a lot to the condo market on the island as Chinese buyers typically are among the top two nationalities."

According to the Real Estate Information Center, Chinese and Russians led other foreign markets in receiving condo transfers during 2018-23.

"Phuket's condo market will see a record influx of new units, estimated at 5,739 for this year," said Mr Nattha.

"The comeback of Chinese buyers is seen as crucial to absorb the supply."

He said the condo market in Phuket has witnessed robust demand and a strong recovery since 2022, reaching its peak in sales last year.

All locations on the west coast, from Nai Yang beach in the north to Rawai beach in the south, registered an increase in demand in 2023.

According to Knight Frank Thailand, the number of new condo units launched in Phuket peaked in 2019 at 4,828 units, up 88% from 2,563 units in 2018. The key drivers were buyers and developers from China.

The market rebounded last year with 4,081 units launched, rising from 1,619 units in 2020, none in 2021 and 941 units in 2022.

Condo sales recovered to 3,892 units last year on the island, nearly quintupling the amount in 2022.

The most launches last year occurred in Bang Tao, representing 46%, followed by Layan at 25% and Nai Han 14%, according to Knight Frank Thailand.

Layan and Bang Tao recorded the top two new condo units sold last year, with 1,385 units and 849 units, respectively, followed by Nai Han with 524 units.

Sales in other locations were less than 260 units.

"Following an influx of Russian buyers in 2022, the market is now anticipating a new boost from Chinese buyers," said Mr Nattha.

However, he said Chinese buyers have not fully recovered because of economic challenges and the government's crackdown on money transfers, which will prompt buyers to find other solutions for financial transactions.

Mr Nattha, who is a native of Phuket, said Chinese buyers play a crucial role in the condo market as they are frequent guests of the island for a whole year, unlike Europeans who mostly visit during the high season, while arrivals from the Middle East and India prefer the rainy season.

"European visitors and property buyers in Phuket are declining as they perceive it as a mass market and crowded destination, rather than the luxury destination it once was. They seek privacy and exclusivity," he said.

Phuket consistently thrives unlike other destinations, meaning hotel occupancy rates are strong and room rates were 20-30% higher than 2019 levels, said Mr Nattha.

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