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Phuket Survey Reveals Long-Term Demand

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Sun,09 Nov 2008 02:38 | Apartments & Offices News

The worldwide economic crisis will have a temporary impact on Phuket's property market, which has improved since the second half of 2007, although projects with low pre-sales might experience economic problems, said Nigel Cornick, chief executive officer of the property developer Raimon Land Plc.

He said projects with a pre-sales rate of below 35% might have troubles financing project development as financial institutions would decline loans to a project with low sales.

As per the company's survey, Phuket's villa supply started from 2003 is 17 projects and 363 units (63% sold) all at present under development.

The condominium supply is 48 projects with 2,202 units from 2003 in anticipation of June 2008. Of this total, 22 projects with 752 units have been finished and their units are currently 90% sold. Another 26 projects with 1,450 units (49% sold) were in the process of development.

Further 2,000 condominium units are ready to enter the market and 63% of these have been sold.

In the first half of the 2008, condominium unit sales overall 2.7 billion baht – an increase of 15% from 2.4 billion baht in the second half of 2007 and up 80% from the first half of 2007.

The revolution in September 2006 had set off a major decrease in condominium demand, with the price falling from 2.6 billion baht in the second half of 2006 to 1.5 billion baht in the first half of 2007. On the other hand, from the second half of 2007 the price of condominium demand has increased constantly.

The average value of condominiums increased by 8% to 101,203 baht per square meter in the first half of 2008, with the average value per unit being 15.9 million baht.

"Those who moved to Phuket can get a good opportunity of strong long-term profits both in rental yields and capital gains as shown by the elevated prices of units sold at lots of luxury projects," said Mr Cornick.