THE PHUKET REAL ESTATE INDUSTRY IS LOOKING FOR A STRONG HIGH SEASON
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.
