The supply of new condominiums on the resort island of Phuket is expected to slow further next year, according to the Phuket Real Estate Association (PREA).
New supply grew by as much as a staggering 300 per cent from 2010-12, but fell by nearly 30 per cent in the first 10 months of this year.
The number of new condo units launched from January to October was 6,000 to 7,000, while 10,000 werelaunched in the whole of last year, according to PREA president Thanusak Phungdet.
“Sales of condo units launched in the past few years were so strong that developers slowed down new launches this year,” he said at the recent launch of the Zcape III project on te island.
Many developers are waiting to assess the situation when construction of launched projects is completed, mostly in 2014.
Next year, the number of new condo units launched in Phuket will decline to only about 5,000, said Thanusak. The association estimates about 30 percent of condo buyers in Phuket are speculators. However, speculators generally have strong purchasing power and have few problems in getting units transferred, while largedevelopers have to use reselling teams to manage returned units.
He added: “Resale units will have good absorption under ASEAN integration due to the tremendous growth of foreign visitors, which is expected to be 40 percent. Condo units will replace hotel rooms, which may not support the arrivals.”
Thanusak added that the property market in Phuket has potential for growth, insisting that the condo sector has not reached a bubble point despite the large volume of units launched by local and Bangkok developers.
“Developers should consider the existing supply in the market before launching new ones,” he said.
They should also have a clear target group to tap and not just turn the condo project into a hotel when it is not successful – something that PropertyGuru had noted as happening on the island in increasing numbers.
This story was first published by The Phuket News are in reproduced as part of an editorial partnership between The Phuket News and PropertyGuru Group.
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