Developers in Phuket are seeing more Russian buyers return to the market with a noticeable increase in demand having occurred in the past 9 months, according to local media reports. This rise in Russian real estate buyers has coincided with an increase in Russian tourists to the island.
Over 51 per cent of Russian travellers to Thailand come to Phuket with the contribution to the local economy in terms of tourism receipts estimated to be upwards of THB30 billion, according to a Phuket Russian Tourism Market report. Experts note that these increases can also end up benefitting property developers.
“Rolling into 2017, the reality is when speaking to both developers and agents the feedback is that a growing number of Russian real estate buyers consider Thailand a safe offshore investment haven. With visa free travel, good access by air and the snowbird effect of those seeking to escape harsh winters, Phuket is a natural location for a real estate purchase,” says Bill Barnett, Managing Director at C9 Hotelworks, to the Phuket Gazette.
The exchange rate recovery of the Russian Ruble to the Thai Baht has also helped the situation. A record low was recorded in February of last year, but it has recovered since that point. The Ruble to Baht exchange rate was at its highest point in 2012, but declining oil prices and domestic economic issues made it difficult for Russian investors to purchase Thai real estate until recently.
“Another strong peripheral effect from not only Russia but other Eastern European countries such as Kazakhstan, Uzbekistan and others are capital flight from volatile domestic markets into Southeast Asia. Thailand and Vietnam are good examples of investors taking a positive view of these markets. We expect the positive Russian tourism growth to continue through 2017 and on into next year, and this is expected to have a domino effect on the sector,” says Barnett.
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