Phuket’s real estate market is bracing for a significant influx of new condominium units in the fourth quarter, with Chinese tourists playing a pivotal role in absorbing this new supply. August will be a critical month to gauge the number of Chinese tourists expected during this period.
Key Takeaways
- August is crucial for assessing Chinese tourist numbers in Phuket for Q4.
- Chinese buyers are among the top two nationalities for condo purchases on the island.
- Phuket’s condo market is set to see a record influx of 5,739 new units in 2023.
- Economic challenges and government regulations in China may impact buyer behavior.
- European buyers are declining, viewing Phuket as a crowded destination.
Chinese Tourists and the Condo Market
Nattha Kahapana, managing director of Knight Frank Thailand, highlighted the importance of Chinese tour agents visiting Phuket in August. These agents typically explore accommodation and survey tourism-related products in preparation for China’s Golden Week in October. Their presence will be a strong indicator of whether Chinese tourists will visit Phuket in the fourth quarter.
Chinese buyers have historically been among the top two nationalities purchasing condos in Phuket. According to the Real Estate Information Center, Chinese and Russian buyers led other foreign markets in condo transfers from 2018 to 2023. The return of Chinese buyers is seen as crucial to absorbing the new supply of condos.
Record Influx of New Units
Phuket’s condo market is set to see a record influx of 5,739 new units in 2023. The market has witnessed robust demand and a strong recovery since 2022, reaching its peak in sales last year. All locations on the west coast, from Nai Yang beach in the north to Rawai beach in the south, registered an increase in demand in 2023.
In 2019, the number of new condo units launched in Phuket peaked at 4,828 units, up 88% from 2,563 units in 2018. The market rebounded last year with 4,081 units launched, rising from 1,619 units in 2020, none in 2021, and 941 units in 2022. Condo sales recovered to 3,892 units last year, nearly quintupling the amount in 2022.
Economic Challenges and Buyer Behavior
Despite the anticipated boost from Chinese buyers, economic challenges and government regulations in China may impact their behavior. The Chinese government’s crackdown on money transfers will prompt buyers to find other solutions for financial transactions.
Nattha noted that Chinese buyers are crucial as they visit Phuket year-round, unlike Europeans who mostly visit during the high season. However, European visitors and property buyers are declining as they perceive Phuket as a mass market and crowded destination, rather than the luxury destination it once was.
Phuket’s Continued Popularity
Phuket continues to thrive as a popular destination, with hotel occupancy rates strong and room rates 20-30% higher than 2019 levels. The island’s ability to attract a diverse range of visitors is essential to maintaining its status as a premium destination.
In conclusion, the arrival of Chinese tourists in the fourth quarter will be a significant factor in the success of Phuket’s condo market. The island’s real estate sector is poised for growth, but economic challenges and shifting buyer preferences will play a crucial role in shaping its future.
Sources
- Bangkok Post – Chinese crucial to Phuket in Q4, Bangkok Post.
- Chinesen entscheidend für Phuket in Q4, Thailand, DER FARANG.
