Condominium and apartment sales on the island of Phuket dropped 6 percent year-on-year at the end of Q4 2014, according to the latest research report from CBRE Thailand.
The real estate firm noted that about 600 units were sold during what is considered the high season for property sales in Phuket.
It noted in its latest research report that one-bedroom units of between 30 and 45 sqm and priced between THB2.5 million and THB5 million were still the best selling product, accounting for 58 percent of sales.
Significantly, for buy-to-let property investors it also noted how the increasing number of these investors wanting rental income will result in direct competition with hotel rooms, which may restrict the ability of hotel owners to raise their room rates.
At the end of 2014, the total completed supply of resort condominiums was about 4,700 units, an increase of 10 percent year-on-year, with another 4,600 units expected to be completed by 2017.
A total of 18 condominiums projects were launched in Phuket during 2014. These projects accounted for some 2,000 combined units, more than 800 units up on the previous year. The average asking price per unit declined slightly from the previous quarter, according to CBRE, as a result of declining unit sizes.
CBRE also noted a significant 13 percent drop in Russian tourist arrivals year-on-year, and how this affected the sales of smaller entry-level units. It reported that some developers are claiming sales to Chinese buyers, but that it has still not seen any significant evidence in buyers from that country despite a dramatic increase in arrivals.
“We think there will be a limited number of new launches in 2015. Prices per sqm for new projects are likely to remain flat,” CBRE said in its forecast for the year ahead.
“Demand will come from a greater range of nationalities due to the downturn in the Russian market and we will see if there is any significant increase in the number of Chinese buyers.”
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
