Knight Frank Thailand Indicates Foreigners Remain Interested in Real Estate in Phuket
25 June 2021
Given the current situation in Phuket, we, the people who work and live in the province, have started to receive vaccinations. Over 75 percent of such people have received the Covid-19 vaccine.
Mr. Nattha Kahapana, Deputy Managing Director and Head of Phuket Operation, Knight Frank Thailand, said that, as everyone well knows, the Covid-19 outbreak affected all sectors, including the real estate market in Phuket and Samui, which has slowed down considerably as foreigners cannot travel to the country. The proportion of purchasing power from foreigners is 80 to 90 percent, and only around 10 percent from Thai buyers.
In 2020, the total condominium supply was 26,096 units, demand stood at 19,761 units, and 6,335 units remained. Meanwhile, the total supply of villas was 3,871 units and 3,056 units were bought and sold, which represents a relatively high percentage as villas are generally constructed only when a buyer has reserved one; as a result, the villa market has not been as heavily impacted as the condominium market. Also, selling prices have been lowered to attract both Thai and foreign buyers as well as investors. By focusing mainly on online sales channels, the lowered selling price makes it easier for buyers to make their purchasing decisions.
The Covid-19 situation appeared to have improved during the beginning of 2021, but new outbreaks occurred in April. This new wave is considered to be the third wave of the epidemic, which may affect plans to open the country where Phuket has been designated as a pilot province without quarantine. Most recently, the government announced plans to open Phuket to inbound tourists under the Phuket Sandbox scheme on 1 July. Tourists must meet the following criteria:
1. Foreigners must be fully vaccinated at least 14 days before the travel date, and they must have a certificate of vaccination.
2. Travelers must be from a low risk country only; in the case of children under 6 years old, they must be accompanied by a parent who has been fully vaccinated.
3. Tourists must have medical documents confirming that they tested for Covid-19 and have found no infection no more than 72 hours before departure.
4. Upon their arrival in Phuket, tourists must be tested again and they must wait for the test results in their accommodations until negative test results are found. Only then can they be allowed to travel within Phuket. Also, after a 14-day stay, they are allowed to travel to other provinces.
Given the current situation in Phuket, we, the people who work and live in the province, have started to receive vaccinations. Over 75 percent of such people have received the Covid-19 vaccine. This gives confidence to both people in the country as well as to foreigners who wish to enter the province. When foreign tourists are allowed to travel to Phuket, it will greatly increase sales opportunities for the real estate sector. We are confident that the situation will gradually improve and the real estate market in Phuket and Samui will become vibrant again. From the information we received, there are 28 countries that want to travel to Phuket, such as China, England, Germany, Singapore, Russia, etc.
Although in the beginning, those who come in will be a group that focuses on tourism and leisure, they are still considered to be a good sign for recovery. Before the Covid-19 crisis, this group comes from countries whose citizens tended to buy properties in Phuket as second homes rather than for investment purposes. They view Thailand as a safe place with a moderate cost of living and good healthcare system.
In addition, there is news of a policy to stimulate real estate when the country is opened; this includes the expansion of foreign condominium quotas by more than 49 percent, allowing foreigners to have ownership of houses, and extending leasing rights for more than 30 years. If these measures take place, they will help drive the real estate market enormously, to make up for the slowdown in the business during Covid. Thai investors continue to slow their investments in real estate as they are waiting for the country to open to foreigners.
We believe that real estate in Phuket and Samui will recover before other provinces, as most people in Phuket have been vaccinated against Covid. This includes employees of Knight Frank Phuket. We are ready to serve investors and those who wish to purchase real estate in Phuket and Samui as soon as Phuket is open to foreign tourists.