Phuket’s booming property market is showing signs of strain, with a significant number of residential units remaining unsold despite strong foreign demand and a surge in new project launches. The Real Estate Information Centre (REIC) has issued a cautionary note, highlighting that supply may soon outpace demand, urging developers to adopt strategic sales approaches.
Key Takeaways
- Over 10,000 residential units remain unsold in Phuket, valued at approximately 77 billion baht.
- New unit launches have increased by nearly 80% year-on-year.
- Condominiums constitute the majority of the market supply.
- Prime locations like Bang Thao and Surin beaches are popular but also have a substantial number of unsold units.
Oversupply Concerns Mount
The REIC’s latest report indicates that while Phuket’s property market has experienced a robust surge, with over 70% of units sold this year, a considerable inventory of 10,159 housing and condominium units remains on the market. The total value of these unsold properties is estimated at 77.078 billion baht. This situation signals a potential imbalance where supply could soon exceed demand, prompting the REIC to advise developers to implement well-planned sales strategies to mitigate risks.
Condominiums Dominate Supply
Condominiums represent the largest segment of Phuket’s residential offerings, with 15,511 units available, valued at 126.622 billion baht. In contrast, only 2,116 housing units are on the market. The introduction of new units has been substantial, with 10,613 new units launched this year, marking a significant 79.5% increase compared to the previous year.
Popular Locations and Foreign Demand
Areas such as Bang Thao Beach and Surin Beach have been particularly attractive to foreign buyers, driven by the availability of lifestyle amenities like golf courses, beach clubs, and international schools. These locations have seen 3,428 units sold, totaling around 40 billion baht. However, these popular areas also account for a significant portion of the unsold inventory, with 4,466 units still available. Rawai Beach, Kata Noi Beach, Kata Beach, and Karon Beach are also emerging as hotspots, with condominium units near beaches proving especially appealing to foreign tourists and retirees.
Market Dynamics Compared to Bangkok
While Phuket experiences rapid growth, reports from CBRE Thailand suggest a different dynamic in Bangkok’s condominium market. Large condominium units in Downtown Bangkok are in high demand, with a 93% sales rate for ready-to-move-in units. Foreign buyers, particularly from Taiwan, Australia, and China, are significant contributors to Bangkok’s property sales value. In contrast, Phuket’s vacation home market, while growing rapidly, sees 75% of purchases made for investment purposes, with Thai customers forming the largest buyer group at 70%.
Sources
- REIC warns of oversupply of residential units in Phuket, Nation Thailand.
- Bangkok condos’ attract buyers whilst Phuket market growing rapidly – CBRE, RE Talk Asia.
