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COVID slams Phuket property market, highest unsold units in Southern Thailand

COVID slams Phuket property market, highest unsold units in Southern Thailand

PHUKET: The top five areas in Southern Thailand with the most unsold property units are all located in Phuket, the national Real Estate Information Center (REIC) has revealed.

propertyeconomicsCOVID-19tourism
By The Phuket News

Tuesday 17 November 2020, 12:48PM


Image: REIC

Image: REIC

REIC Acting Director Wichai Wiratkaphan revealed in report released yesterday (Nov 16) that in the first half of 2020, Phuket had the highest number of unsold accommodation units in the South with 8,984 units, while the total number of unsold units throughout Southern Thailand was 17,087.

The combined area of Bang Tao and Surin, on Phuket’s central west coast, has the highest number of unsold properties in all 14 provinces in the South with 1,886 unsold units.

The second-worst in the South was the combined area of Thepkrasattri and Srisoonthorn, with 1,461 unsold units.

The combined area of Nai Yang and Mai Khao placed third with 1,362 unsold units,  followed by Koh Kaew and Rassada with 1,042 unsold units, and  Kamala with 858 unsold units.

The report gave the average estimated value for each unit as B3-5 million.

The number of unsold accommodation units available throughout Southern Thailand for the second half of 2020 was likely to increase to 17,688 units, valued in total at about B84 billion, said the report.

Southern Thailand has suffered the worst impact from the COVID-19 pandemic, as the economy in the area is mainly dependent on tourism, the report noted.

“Real estate business goes together with the tourism industry, and the Phuket economy is 90% dependent on tourism,” the report said.

In the REIC report, Boon Yongsakul, Chairman of Boat Pattana Co Ltd and who also served as Chairman of the Phuket Real Estate Association (P-REA) from 2017-2019, explained that the real estate business had been badly affected since the island was locked down due to the virus pandemic.

“This crisis is the worst in many years for the Phuket economy, as the gross provincial product (GPP) of Phuket is about B400 billion, which is mostly from tourism,” Mr Boon said.

Home buyers had to abandon their down payments on properties, while the rejection rate for credit was high, he said.

Internal - Phuket News TV

People applying for mortgages often were being asked to not just provide one guarantor, but two to three guarantors to ensure payments would be made, he added.

“Phuket has been suffering since the lockdown and no helping measures have come out. We have only the news to open the island to foreign tourists, but I have not seen any concrete results on that,” he said.

“We should use this crisis to develop Phuket in terms of infrastructures to welcome tourists. Phuket must be re-positioned to not only be a tourist destination, but also a medical hub in order to welcome health tourists who are likely to stay for a long time. PSU [Prince of Songkla University] will take the main role of producing medical staff [to develop the medical tourism industry in Phuket].” Mr Boon noted in the REIC report.

Issara Boonyong, Chairman of Kanda Property Co Ltd, as a Bangkok property business operator who had invested in Phuket, also noted, “After the pandemic began, the Phuket property market was severely affected as the number of domestic tourists is not enough to support [the economy].

“A weakness of Phuket [in attracting domestic tourists] is the distance from Bangkok, which takes about eight hours to drive to [from Bangkok], unlike Pattaya, Hua Hin or Khao Yai, which take much less time [to reach],” he added.

“Phuket tourism may gradually improve, as officials and private companies are coming to have seminars on the island instead of going abroad. This will help Phuket in the short term,” he said.

However, Mr Issara added, “Tourism business operators must reduce their prices by more than 50% to attract Thai tourists, but the weakness of the distance [from Bangkok] is still a big factor to take into account.”

Mr Issara also supported the concept of developing medical tourism on the island.

“The medical hub to be built in Phuket is a government public-private partnership (PPP) project by having the Ministry of Public Health as the main project host.

“The project will cost about B1.3 billion. PSU will produce more doctors and nurses to support this medical hub project,” he said.

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xcell | 18 November 2020 - 12:04:40

Finally this so-called „development“ takes it‘s toll...

CaptainJack69 | 18 November 2020 - 12:04:36

You've not explained but presumably these "unsold units" are only the new builds? So these statistics don't even consider the already big and now much enlarged resale market? It's no surprise that you can't con people into 'investing' in property to rent to tourists when there's no tourists, but when people can't sell their homes it's a sign of real ec...

Kurt | 18 November 2020 - 11:34:44

Mr Issara added: Phuket Tourism operators must reduce their prices by 50% to attract Thai tourists. So, Phuket in her fullest dual pricing? Including the different menu prices in Phuket restaurants. Bit by bit we learn how profitable Phuket was for Phuketians with having foreign tourists. 'Heaven times' of the past.

Kurt | 18 November 2020 - 09:51:59

The Phuket Government should consider a building/construction stop until: 1,  All not yet sold properties are sold. 2, And first the water treatment plants, incinerating- and water capacity has been brought up to needed levels.

Kurt | 18 November 2020 - 09:36:23

... in favor of financial profits and than run away, leaving Phuket alone with her downgrading environment, nature and beauty.  Phuket became a money pig for 'investors', building firms, who rapidly with full pockets run off Phuket after leaving it with new 'fresh' concrete.

Kurt | 18 November 2020 - 09:30:57

Is shocking, sad to see, read how little Phuket Officialdom cares/work on preserving Phuket's nature and beauty. Completely ignoring were the tourists in the past were coming for and now looking away for nicer holiday locations..
What is the use of everywhere dumping 'properties' while not having incinerator-and water capacity for it? Pulling wrong end of the rope, in favor of financi...

Timothy | 18 November 2020 - 08:57:17

Laguna has at least four huge projects underway. Hundreds of condos. Already the roads around here are too small. Traffic backed up for miles. At Layan there is a huge development going up with the banner proudly declaring that it is "built among the National Park." Next to Laguna golf club, a massive area is being prepped for development. Pave paradise and put up a parking lot... 

LALALA | 17 November 2020 - 20:24:50

Phuket property market is dead since years already.

pg1959 | 17 November 2020 - 20:08:52

What’s the point of buying a property there when you can’t even get in the country?

Capricornball | 17 November 2020 - 18:59:54

“We should use this crisis to develop Phuket in terms of infrastructures to welcome tourists. " What a concept...but Nooo...keep raping the island like there's no tomorrow...more crappy developments ram-rodded, particularly in Surin/BangTao areas.  Developers and their greedy contacts in government are destroying the very things that made people want to come here in the first place.

Kurt | 17 November 2020 - 15:44:17

No news! This, with all the enormous sale discounts, is going on for years already on Phuket. Who want to buy Phuket property, not being sure of Government granted water supply? Buy a condo? Pay triple the costs of water and electricity bills of what a thai pays .Service costs, very high, coz they want do drive a BMW of it. It is all: 'We put you on the drain". 

Fascinated | 17 November 2020 - 14:50:13

Son Nam Na- thanks for raping the island out of greed. Karma's a beach. If it wasn't for COVID we would have run out of water this year.

Shwe | 17 November 2020 - 12:58:25

No sympathy, just jump on the over development bandwagon. Serves the right

 

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