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Phuket condo supply falls short

PHUKET: Demand for condos in Phuket has outstripped supply as more Chinese and Russian investors look to entire projects instead of individual units, Phattanan Pisutwimol, President of Phuket Real Estate Association (P-REA), has told The Phuket News.

By Nattha Thepbamrung

Thursday 23 March 2023, 03:29PM

“Currently, we do not have enough. I talked to Chinese agents, and they said they do not have anything to sell. Chinese agents usually look for a whole project to invest in, and many projects in Phuket have been paused or are still being built,” he said.

Russian property investors are following the same trend, he added. “However, Russians that invest as individuals are still trading in second-hand condominiums,” Mr Phattanan noted.

“There are a lot of pool villas that are not finished yet and these investors [Chinese and Russians] are looking for complete projects, so it will take time to see the volume of investment increase,” he explained.


Much of the supply shortage stems from the impact of the COVID-19 pandemic, Mr Phattanan said. “During COVID, people went back to their hometowns, and construction of projects was frozen. Now, as we start to recover, the number of construction workers available is not enough.

“It takes time to fill the manpower gap. This has affected construction costs, which increased 20% on average from last year. These are negative factors that are increasing the cost for developers,” he said.

“I think the price of buildings and condominiums have risen higher this year. It is also about location. If it is Patong, I think the price is already about 10-20% higher than pre-COVID.

“It is also about the law. In Patong, unlike in other areas in Phuket, a condominium project must provide one parking space per two rooms, as opposed to one parking per four rooms [elsewhere on the island]. The owners or developers [in Patong] must prepare more investment [funding to be available], which results in higher costs,” Mr Phattanan said.


Mr Phattanan is confident that Phuket will remain an investment destination and the number of investments this year will continue. “We will see the sharp rise in real estate investment in Phuket,” he said.

“We can see that this year, there are more condominium projects that target foreigners in the market. The number of registered condominiums may not increase much because there are a lot of condominium projects in Phuket that are only 80-90% complete and have not been registered yet. But I estimate that there will be about 3,000-4,000 units [being registered in the coming year], mostly targeting foreigners, mainly Chinese and Russians,” Mr Phattanan.

Citing Phuket Provincial Land Office statistics of registered and transferred properties from 2012 until 2022, Mr Phattanan pointed out a spike in demand at the end of 2022.

“It is hard to say that there are more foreigners in the recent transfer numbers, but I can say that the tendency is that foreigners who are interested to invest in Phuket real estate will be higher than pre-COVID times,” he said.

“You can see that in 2019, before COVID, the two lines [registration and transfer] almost met, and then during COVID the projects that had been built could only register as available but could not be transferred because there was no investors; that’s where the lines on the graph separate again,” he explained.

“According to the stats, the total amount of land with buildings transferred in 2019 was 4,398 units. Last year, while [the economy] just started recovering, there were 4,163 units, which is very close to the amount before COVID, and this year the trend is increasing,” he said..

“I estimate that the building transfers could grow 10-15% from last year, up to 4,500 units, which is even more than 2019. For condominium transfers, in 2019 there were 2,163 units, while last year 1,966 units were transferred. The numbers are pretty close,” he added.


Mr Phattanan said he expected a surge in investment from China this year. “The current number of Chinese investors interested in Phuket may seem lower than the number of Russians. This is because China has just reopened this year, but there will be more and very high demand from Chinese investors. I believe this year there will be high demand from China,” he said. 

“For the Chinese, the demand for investment should exceed that of Russians, but transferring money is still the main issue, for which the operators or owners have to look for a solution,” Mr Phattanan said.

“The obstacle for Chinese investors is the money transfer between the countries because their government is quite strict and this may have affected the transfer number in condos last year.

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“But I believe that this year the condominiums [that are waiting to be registered] will be registered then transferred. There will be about 3,000 units more in the supply. This number will be combined with the condominiums that are currently being built,” he explained.

“I think we will see a lot of new condominium projects, especially from Bangkok operators, such as Sansiri and The Origin. There will be thousands of new units in Phuket this year,” he added.

Meanwhile, demand from Russians continues to lead the demand, Mr Phattanan confirmed.

“Russians usually invest in both condominiums and villas. The main reason that brought them here is the war and the instability of their currency, so they want to bring their money to invest in something stable, such as real estate. They target completed projects because they want to immediately spend their money,” he said.

“There are also a lot of long-stay Russians in Phuket. Since last year, there have been in total [both short-term and long-term stays] more than 400,000 of them,” he added.


In addition to more than 3,000 units becoming available this year, which Phattanan says will be provided mainly by Bangkok-bas developers, local investors are also preparing to roll out more developments.

“More than 50 developers in the association [P-REA] are excited and are preparing to develop more projects. We will also see collaboration between local developers and Bangkok developers as well as foreign developers. This will be even more interesting,” he said.

“Big developers from Bangkok may be more ready with higher investment power and lower costs, giving them more opportunities, but local investors have the advantage of knowing the needs of people staying in Phuket better,” he added.

Unable to compete directly with large-scale Bangkok developers in mass condo unit projects, local developers instead turn to serving alternative markets. “Targeting more luxury real estate investment instead of mass projects is something local developers can do better. This will push the local developers to keep improving with better quality,” he said.

“The situation now is not normal because of the war [in Ukraine]. The overwhelming demand will remain during this year and possibly next year, but will eventually slow down and get back to normal.

“In the long term, because Phuket relies on tourism and the world situation, we will have to see again how it goes. In the short term, it is not a normal situation as there is a war there. If next year the war stops, there may not be the same number, so a drop to normal could be expected. To forecast Phuket’s property situation, we have to see period by period, from six months to one year,” Mr Phattanan said.


Phuket will remain an attractive investment option for both Chinese and Russian investors in the years to come, Mr Phattanan said.

“Phuket is the very first destination apart from Bangkok that Chinese people choose to invest in. We might not have seen the demand during COVID, but this year we will see that the demand for Chinese investment will be no less than the pre-COVID.

“For the Chinese, Phuket is close and a well-known world destination. Phuket is also a world gastronomy hub and Thai people are friendly. Phuket is also outstanding for investors from its tropical weather with beautiful beaches. 

“The hospitals, schools, and airports are good and most of the local people can communicate in English, which makes Phuket more ready than many other provinces in Thailand. Bangkok suits a short-term stay and business purpose, but Phuket with sea, sand, and sun, makes it better for long stays as well,” he said.

“There may be a few that invest in other places instead, but I do not think there will be a lot because, in the end, many other places are not as ready with facilities like in Phuket.

“We can see the example where some Russian investors moved to Turkey when Phuket’s supply was not enough, but when Turkey had an earthquake, they decided to move back to Phuket again. Phuket is still their top choice,” he added.

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Kurt | 26 March 2023 - 10:52:33

And I slept well by believing that up to the highest level ( general Prayut visit to Phuket last week about it), the Wetlands are environmental wise needed and protected. Nature protection and sustainability, and so. The usual Thai hypocrite fooling around, if true what Christysweet writes.

christysweet | 25 March 2023 - 11:38:43

Meanwhile if not living near a hundred bars offering  prostitutes is not a priority, up at Layan  there are three projects ongoing and hundreds of condos will be on market soon. Layan soi 7  now has three worker camps and it is non stop  filling in wetlands at the base of Sirinat Nat'l Forest Reserve  for McVillas 

Capricornball | 24 March 2023 - 20:18:14

Correct Nasa12, but the ills of overdevelopment are not ever considered here...just grab as much baht as possible at this moment, future be damned. We hear of "overburdened infrastructure" in many parts of the world, but, in terms of water treatment, there is essentially no effective treatment anywhere, and all beaches are plagued with filth water. Left to local mindset, Phuket is doomed...

Nasa12 | 24 March 2023 - 08:13:48

Before some projects are started in Phuket.  Most infrastructure such as roads, water, electricity, garbage collection and sewer pipes must be in place.  Phuket is drowning in traffic, garbage and the stench of sewage all over the island.


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