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September 25, 2009
As Phuket’s low season is coming to an end and the high season is fast approaching, the island’s property industry has their fingers crossed for a pick-up in business. The signs are looking very positive.
Passenger traffic to Phuket is increasing as flight traffic is also on the rise. Direct flights from Perth by Virgin Blue are expected to begin in November. This is on the back of an earlier announcement by Virgin Blue that they intent to start with direct flights to Phuket from Brisbane and Sydney as well.
Increased flight frequency is also expected from some regional airlines and Air Asia recently announced they want to make Phuket their regional hub.
All this is welcoming news for the upcoming high season which officially starts on the 1st of November.
The island’s hotel industry is also in an increasingly optimistic mood. Advance bookings are on the rise with some hotels reporting 100% occupancy over Christmas and New Year.
Some questions are raised, however, on how long the 2009/2010 high season will last.
Phuket’s high season, in terms of accommodation rates, traditionally runs from 1st of November until 30th April. With the global economy getting back onto its feet, expectations of a boost in hotel bookings and activity on the island is justified, although some feel this much needed boost may slow down towards the end of February 2010.
So what does this mean for the real estate in Phuket?
According to a recently published mid-year report, the first half of 2009 saw a total sales of nineteen Phuket luxury villas with a combined value of 3,5 billion Baht. There remain a total of ninety-two unsold luxury villas in Phuket with a total value of 10 billion Baht. The report defines a luxury villa in Phuket as being priced at 65 million Baht or above.
With only a few new developments of properties in Phuket being launched over the last 12 months, and many developments already started having slowed construction, the Phuket property inventory is no longer growing at the same pace experienced in the previous 24 months. This bodes well for established and financed developers.
As tourists start to return to the island and the Phuket real estate market is picking up, the Phuket properties that are already completed or nearing completion and those well established in the market are likely to see an increase in sales as new launches are expected to remain low.
However, to paint the Phuket property market with a single brush would be ignorant to the product segmentation. Area, price and product (Phuket villas, Phuket condominiums, foreign freehold, leasehold…) create mini-markets within the Phuket property market with each segment having it’s advantages and challenges and success stories to report.
The fundamentals of the Phuket property market remain the same. Its attractions and infrastructure, and the easy access and central location within Asia remain strong selling points. The relatively low cost but yet high standard of living only adds to the positive factors.
All this combined with the expected increase in air traffic and the already strong advanced hotel bookings makes that the Phuket real estate market is looking set for a very strong high season.
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September 23, 2009
Thai AirAsia is opening a second base in Phuket for international services at a time much of the aviation industry remains in the doldrums and some airlines are making cutbacks.
As part of a growth strategy the low-cost carrier has firmed up plans to link the southern Thai resort island with four major regional cities from November.
The airline currently has a single international service to and from Phuket-Singapore, and flights to Bangkok.
Thai AirAsia will introduce daily flights from Phuket to Jakarta and to Hong Kong from around mid-November. Daily services to Ho Chi Minh City and Medan will start one month later.
The airline will station two A320 jetliners, each with a capacity of 180 passengers, at Phuket International Airport and will set up a crew center and an aircraft maintenance support base there. There are also plans to set up a third Thai hub in Chiang Mai next year to tap alternative traffic opportunities to its Bangkok base.
Phuket offers promising traffic potential, especially from those who want to travel directly to and from the island.
The chief executive, Tassapon Bijleveld, said that there are risks involved in opening a Phuket base but that they are calculated ones.
Having additional hubs to Bangkok increases the airline’s options for keeping its passenger traffic flowing through Thailand, particularly if Bangkok encounters political troubles like the blockade of Bangkok’s two airports late last year.
If the direct international service to and from Phuket is successful, the carrier may connect the resort island, not only famous for being a tropical holiday paradise but also internationally well known for its Phuket Real Estate, with cities in the Philippines and India, where it plans to establish a foothold next year.
The airline brought its 10th brand new airbus A320 jetliner in service last Friday, and is due to take delivery of the 11th in December.
Thai AirAsia is due to start a new route Bangkok-Taipei on Friday and to begin a second daily Bangkok-Hong Kong service on the same day.
The airline will next month scale back flights on some routes –Bangkok-Hanoi from twice to only once daily. Bangkok-Macao will be reduced from four to three times per day while Bangkok-Penang will go from two to one daily flight to correspond to traffic demand.
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This weekend Phuket is celebrating the very first edition of its own dance music festival ‘Roy Fest’. The place where it is all about to happen is Karon Beach.
‘Roy’ means ‘fun’ in Southern Thai and the Tourism Authority of Thailand (TAT) is hoping that the more than 50 international DJ’s and musicians it has booked for the festival will help the party live up to its name.
TAT has invested more than 22 million Baht to convert Karon Beach into the ‘ultimate beach dance party’. Thousands of party goers are expected to have fun on the white sandy beach of Karon.
DJ Seed, whose real name is Norasate Mudkong and who also is the festival’s music director said: ‘Hua Hin and Ranong have their own music festivals. So why should Phuket not have its own festival as well? It is my home and is known as the ‘Pearl of the Andaman’.
‘Singapore’s Zouk Out is a very successful beach dance festival and our Karon Beach is much more beautiful’ he said.
In the current economic climate it is important to promote tourism in Southern Thailand. Phuket is a fantastic place to start. As it is very picturesque and is already well-known, it is easier to attract tourists from all over the world.
‘Roy Fest’ aims to raise awareness about Phuket, largely by word of mouth from the artists, as high season is approaching fast.
The music festival, which is spread over two days, features two groups of international artists. Amongst them are DJ Ken Ishii from Japan, DJ Adsorb from England, and DJ Lord Warddd from America and DJ Lapsap from Malaysia. There are also local acts such as DJ Seed, DJ Dragon, T-Bone, Ta-Mone, Thaitanuim, Southside, Doobadoo, Silly fools and Smile Buffalo.
DJ Adsorb, who played at Glastonbury, is BBC Radio’s rising star. DJ Ken Ishii is a world famous techno DJ.
The organizers say they would like everyone to have a good time and enjoy dancing on the beach under the stars and cooled by the sea breezes.
In keeping with every good Thai fest, partygoers will find plenty of booths selling food, drinks and souvenirs.
‘Roy Fest’ takes place on Karon Beach this coming Friday and Saturday the 25th and 26th of September from 6pm to 2am.
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September 17, 2009
With an extra 34 flights to Phuket and Krabi weekly there will be an influx of tourists from the Scandinavian countries this coming high season.
Tour operator TUI Nordic says that Scandinavian tourist will return to Phuket and Krabi between December and March because the Swedish and Norwegian currencies are growing stronger.
Officials at Phuket International Airport were not able to confirm the additional flights yesterday.
But if all goes as expected, the 120,000 extra visitors will mean a return to the same figures as in 2007, when the economy, just like the tourists, were flying.
The recent figures for August at Suvarnabhumi Airport in Bangkok, where many of the passengers flying to Phuket and Krabi transit, show that travel from Europe is booming again.
While the total amount of visitors from Europe year on year rose by more than 12 percent, there were some dramatic increases. Arrivals from Holland (16,997) rose 36,26 percent, Germany (37,113) leapt 27,15 percent while Austria (5,401) jumped a whopping 25,02 percent. Almost as healthy figures were noted from Eastern Europe, Switzerland and Italy.
Offsetting these rises, restricting the overall Suvarnabhumi position to a 5,17 percent drop compared to 2008, was a downturn of 12,31 percent in travel from East Asia.
Tourists from Korea, China, Hong Kong, and especially Malaysia preferred to stay home or go elsewhere. The Japanese market stayed around the same figure, slipping only a mere 1,87 percent.
Americans (38,952) also came in similar numbers. But Australians (35,397) arriving in Bangkok slid by 11,70 percent.
Middle Eastern countries collectively turned away from Thailand in August. Arrivals from that region dropped with 34,828 or 35,20 percent. This was more than made up for by a boost in visitors from South Asia with a total of 64,354 visitors or an increase of 11,68 percent.
Looking ahead to Phuket’s coming high season, the CEO of TUI Nordic says: ‘Despite the global recession, we still see a great interest in Thailand this coming winter. At present we have sold more than 60 percent of our tour packages’.
It is a pity that the prices being paid are 10 percent down compared to last year. But the most important factor is that the seats on Phuket bound airplanes are being filled again.
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September 4, 2009
Phuket seems set for a growth in popularity with foreign travellers as many new airlines will operate new flights this coming winter. Australian holidaymakers this winter will benefit of new routes inaugurated by two Australian carriers, Jetstar and Virgin Blue. Jetstar Group is already present in Phuket with frequencies to Singapore and Sydney. However, the airline will add a second daily flight from Phuket to Singapore with continuation to Perth in Australia. The new Jetstar route will be served with an Airbus A320 and is due to start from the 15th of December, offering then some 7,000 weekly seats to Thailand’s Southern island. Jetstar operates already three weekly flights from Phuket to Sydney in an Airbus A330-200.
Jetstar will get a competitor on the same route with Pacific Blue, a subsidiary of Australian Virgin Blue starting with two flights a week from Perth to Phuket, from November 14. it will be Pacific Blue’s second international destination out of Perth, following the opening of daily flights to Bali in June.
Airports of Thailand (AOT), the owner of Phuket International Airport, announced at the end of last year to invest 170 million USD into the expansion of the crowded airport with ageing passengers’ facilities. Phuket receives over 5,7 million passengers a year and needs a complete overhaul to be brought to international standards of comfort. AOT plans to build a new international terminal for 6 million passengers, bringing the total airport’s annual capacity to 12,5 million passengers. AOT now expects that Phuket airport’s expansion – which includes the new international terminal, the improvement of the existing terminal as well as the upgrading of the jet fuelling system and runway’s layout – will commence by the end of 2010 and be completed by 2013. AOT gave already last may the go ahead to Hong Kong-based aviation services company ASA Group to develop Thailand’s first dedicated VIP private jet terminal at the airport.
The largest inbound markets to Phuket in 2008 were Sweden, Australia and Korea.
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The tsunami detection buoy currently in the ocean off Phuket will be replaced as soon as possible the National Disaster Warning Center (NDWC) said.
NDWC Deputy Director Somsak Khawsuwan told that the mission will take place as soon as conditions at sea would allow it.
‘We can not wait until the end of the monsoon season’ he said.
Launched in December 2006, the buoy stopped transmitting data mid-June this year as its battery ran out.
Strangely enough, the buoy, which was built in the US, powered up again last month and resumed sending on the 5th of August, just five days after a large earthquake occurred north of the Andaman Islands.
According to the US National Oceanic and Atmospheric Administration (NOAA), the buoy is now operating in an ‘emergency mode’ using a back-up battery which will run out some time this month or the next.
Backed by a 48 million Baht budget, the NDWC has ordered one new DART buoy from the US-based NOAA and has a designated contractor for the replacement mission.
According to the plan, technical experts from the NOAA will help replace the existing buoy with a new unit.
The old unit will be brought ashore for maintenance and redeployed a year later, at which time the second unit will be brought ashore for maintenance.
Source: Phuket Gazette
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Despite the fact that the overall Phuket property market has slowed down this year, demand for Phuket luxury villas has remained steady. The most popular holiday destination in Thailand has seen transactions for high end villas in Phuket reach 3,5 billion Thai Baht for the first half of 2009, according to a report from consultants C9 Hotelworks.
Demand for luxury villas in Phuket will probably remain constant for the remainder of 2009 the report says. The report also predicts that 2010 will remain fairly steady as the supply of luxury property in Phuket will not change much, but the overall market should see a significant growth in 2011.
C9’s Managing Director Bill Barnett noted that supply and demand fundamentals for Phuket high end property are continuing to strengthen and that excess supply is being absorbed. While market recovery prospects are being set back to 2011, we have seen a continued gradual upswing in activity. This has been driven primarily by earlier than expected momentum in many of the financial source markets where potential overseas buyers originate from.
The Phuket luxury villa market has seen a slow down in new properties under construction. This will help to drive increased value for buyers and sellers in the coming months and years as there will not be enough properties to meet the demand. The property dynamics look at more ocean front villas in Phuket or ocean view villas in Phuket, resort style managed properties in Phuket and buyers who keep coming back to Phuket.
According to the report, the existing inventory of luxury villas in Phuket is valued at 10 billion Thai Baht with 92 units on the market at this moment. From January to June of this year (2009) a total of 19 new high end properties in Phuket were sold with a total value of 3,5 billion Thai Baht. The resale market emerged with over 1 billion Thai Baht in transactions.
The report concludes that continued tight equity and debt market will limit new developments while barriers to entry highlighted by limited availability of ocean or beach front land indicates positive long term stability. Resale’s, holiday rentals in Phuket and long term rentals in Phuket are tapped to drive more demand in the near to medium future.
Source: Property Report
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Prism Estates, the developer of the Istana Phuket real estate project, has completed the final phase of its infrastructure and has commenced construction.
Istana Phuket is a development of 19 individually designed Phuket luxury villas created by Gary Fell of GFAB Architects. Nine of the 4 to 6 bedroom villas have sold with the 10 remaining villas being for sale at a starting price of 111,000,000 Thb.
Istana Phuket has been featured in a number of real estate industry publications as being one of the top luxury villa projects in Asia. These publications include the recent summer issue of Robb Report Vacation Homes and Asia’s real estate publication Property Report where it was named one of Thailand’s Top Ten Luxury Properties.
The development is located on a 69 rai site overlooking Naithon Beach. Land plots sizes range from 1,589 to 3,527 sqm with villa living areas ranging from 971 to 1,960 sqm. All villas have views overlooking the Andaman Sea.
These high end Phuket villas include features as home theatres, Italian Poliform kitchens and wardrobes, Lutron smart home lighting systems, large kitchen areas for catering to parties, gyms, fully fitted Antonio Lupi bathrooms, stone and timber floors, separate staff quarters and walk-in wine cellars.
The infrastructure building process involved intensive planning in order to save the site’s old trees while improving the site by creating two lakes and a river that flows through the property. Innovative Geo-Textile materials were also used to allow for the villas to be built using the natural contours of the land.
Prism Estates, the Hong Kong based developer of Istana, has been involved in real estate projects around the world. This ranges from resort style properties in Spain, Bali and other parts of Thailand, to land sub-divisions in Australia and commercial building projects in London.
You can find more details about this development here.
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