The penetration of Thai developers into the Phuket residential market, which dominated by foreign buyers in very long times, now has piqued the interest of Thais, according to CBRE (Thailand).
CBRE's research shows that the launch last quarter of an luxury beachfront condominium project, Baan Mai Khao by Sansiri, has attracted significant Thai demand for a Phuket project, in part because of the loyal following Sansiri has in the market.
Baan Mai Khao will sit right next to one of Phuket’s most pristine, peaceful stretches of sand at Mai Khao Beach, an area of notable natural beauty that has recently begun to emerge as one of the island’s most popular upscale tourist locations.
Another project that recently began presales is Amari Residences Phuket, a hotel-serviced residence located in one of the island's most prime locations overlooking Patong Bay. Backed by Italthai, the development is fully managed and serviced by the Amari Phuket Resort, providing rental management and offering a 6-per-cent guaranteed yield for the first three years.
Besides the shift in the developers' profile, the market is also beginning to attract Thai demand, particularly for Amari Residences Phuket and Baan Mai Khao, where the developers are able to draw on their track record in Bangkok and other resort locations to secure Thai buyers.
A growing number of locals are also looking for investment opportunities beyond Bangkok and Phuket is the ideal alternative with its ability to attract the most international tourists after Bangkok and with its established infrastructure to support continuing growth. Although the share of Thai buyers is still lower in Hua Hin and Pattaya, this represents a significant change.
David Simister, chairman of CBRE Thailand, said yesterday that the changes had led to renewed interest in the market by both developers and buyers as well as to the launch of projects after several years of slowdown. The new Thai demand also reinforces the island's position as Asia's leading resort destination.
With the success of these projects and the ability to draw in Thai demand, other listed developers will be entering the market with projects featuring smaller one-bedroom units. The total unit prices in general will move to closer to Pattaya and Hua Hin, but as Phuket is an island, there are geographical limitations on future supply.
For the rest of the year, there will be continued activity for the entry-level segment below Bt10 million for condominiums, leasehold apartments and small villas in inland locations. The top-end luxury-villa market, Bt125 million to Bt250 million per unit, while limited in volume, will be sustainable in the long term as Phuket still has significant unique attractions.