Increasing Demand for Luxury Properties in Thailand
Demand for luxury real estate in popular far east tourist destinations such as Phuket and Koh Samui is increasing and experts are upbeat on the medium and long term outlook for the region.
Property firms are reporting a recovery of purchasing power affecting the luxury residential markets in Bangkok as well as resort destinations and projects that were on hold are now moving forward. For example, the Met at Sathon, which suspended sales two years ago, has seen a resurgence of demand for luxury residences and has opened sales once again for the final 40 units in the 370 unit development.
Pace Development, which has two luxury condominiums, Saladaeng Residence and the Maha Nakhon project, said it has seen rising demand for both projects over the past two months, resulting in sales worth Bt600 million.
Foreign real estate investors from Europe, Hong Kong, Singapore and India are driving the new enthusiasm and according to many specialists the medium and long term demand for residential projects in Phuket and Koh Samui has recovered significantly.
For two years, residential projects in Phuket and Koh Samui had been affected by a combination of local politics and the global financial crisis. The purchasing power of foreign buyers has been reduced by the strength of the baht against depreciating European currencies and the continuing economic crisis.
Looking forward, there is potential for improvement in Thailand’s resort markets in the medium term. But most pundits expect the number of foreign buyers to increase as the economies in which they live and work improve and the local political outlook also improves.
Thailand’s resort market is well positioned for growth because it has a lot to offer in terms of lifestyle, quality beaches and value for money and it enjoys a high percentage of repeat visits.
However, demand is still expected to be well below pre-crisis levels as European markets have not fully recovered because of the weakness of European currencies.
Buyers are focusing on re sale properties and completed projects as most are unwilling to take risks. Phuket’s West coast remains the primary area of interest on the development side, with a limited number of project launches in the upper end of the market. Most new launches are condominium projects.
In Phuket there is a trend towards more action among Thai developers who already have strategic land holdings in Phuket. Some are already active in the Phuket market, but are looking to expand, while others who acquired prime sites many years ago are now looking to develop. There are several projects in the pipeline, mainly in the planning and design phase.
Although Koh Samui has a smaller volume market than that in Phuket, there are individual bargains to be had in both land and properties and certain sites could be purchased at prices lower than those of two to three years ago. However, continued growth is seen in the medium to long term. People still enjoy Thailand and there are repeat visitors who are ready to become purchasers.