Phuket’s foreign property market will continue to improve with estimated sales of 5 billion baht in 2011 despite buyers’ confidence taking a hit from an increase in unfinished projects, says the Bangkok-based property developer Seacon Group.
Executive director Piya Sosothikul forecast the residential market in Phuket would keep rising this year following 25% sales growth to 4 billion baht in 2010. However, he said this year’s performance would still fall below the peak of 10-12 billion baht in annual sales from 2006-07.
In 2009, sales of residential units in Phuket declined as much as 50%, in line with the economic recession in Europe, where most foreign demand for Phuket property originates, especially in the UK.
The stronger baht also meant housing prices increased at a higher rate than in other Asian countries, while many unfinished projects and construction delays have damaged Phuket’s image in the eyes of foreign buyers.
The situation will worsen if the baht appreciates further as expected.
“They need to pay as much as 80-90% of the unit cost before it can be transferred or registered for leasehold rights. If developers cannot transfer the units, the damage will be quite large to foreign buyers,” said Mr Piya.
At least 20 projects are facing lawsuits, damaging foreign confidence.
Mr Piya advised buyers to either buy finished units or select low-payment units to trim risks, as well as seek advice from property agents.
Escrow accounts would also provide payment protection.
The foreign property market in Phuket is second only to Bangkok’s, followed by Pattaya, Chiang Mai, Koh Samui, Hua Hin and Krabi.
There are now 147 residential projects in Phuket. Of these, 23 are in the super-premium segment or villas priced higher than US$2 million, along the west coast, especially Surin and Kamala beaches.
Another 96 projects offer units priced from 5-60 million baht all across the island including Kata, Karon, Rawai and Thalang beaches. The other 28 projects are condominiums located on seaview hillsides around Patong Beach.
The existing residential inventory is valued at 35 billion baht.
Source: Bangkok Post