Mr. Nattha Kahapana, Managing Director, Knight Frank Thailand, said that investments in condominiums in Phuket have proved to be very popular with foreigners, as they are investments that can be used for both personal holiday and income-generation purposes, rented out during periods when owners have returned to their home countries. Phuket also serves as a destination of tourism and leisure that tourists know well. However, the Covid-19 epidemic that began around the end of 2019 deprived Phuket of tourists for almost two years. Given the fact that Phuket's economy depends mainly on tourism, the real estate sector, including the condominium market, was directly affected and it became very sluggish. The country launched plans via the Phuket Sandbox in July 2021, to encourage tourists interested in Phuket, especially foreigners, to return. It was well received but plans to further open the country remain restricted in terms of permitted activities. As such, Phuket's economy has not revived as well as it should have, even though both foreigners and Thais have travelled to the island under the Sandbox scheme. On the whole, the condominium market is still in a state of recovery; developers chose not to launch new projects this year in order to sell remaining units and wait for further assessment of the situation.

Supply

At the end of 2021, the total supply of condominiums in Phuket totalled 26,068 units. Throughout the year, there were no new condominiums launched for sale and added to the supply. The lack of new supply was due to developers waiting to see how the situation of foreign tourism and conflict between countries panned out; therefore, they delayed plans to launch new projects. Since there is no new supply for sale, Knight Frank Thailand Research has classified the supply of condominiums in each beach area as follows: most of the condominiums launched for sale from 2012 to 2021 are located in Patong, with15 percent of the total, followed by Bang Tao at 13 percent, and Kamala and Rawai at 12 percent each. Surin, Layan and Karon accounted for 10 percent, 8 percent and 7 percent, respectively. As for Kata and Nai Yang, both accounted for 6 percent, while Mai Khao, Nai Harn and Nai Thon beaches had the fewest units at 5 percent, 4 percent and 2 percent of the total supply, respectively.

Demand

At the end of 2021, there were a total of 20,376 condominiums sold out of a total supply of 26,068 units, representing a sales rate of 78.1 percent. The sales rate increased by 2.4 percent from 2020, which stood at 75.7 percent. At present, there are approximately 5,720 units left for sale. Only 615 new units were sold in 2021, which decreased from 2020, with 1,956 units sold. The number of new units sold has declined steadily due to the Covid-19 epidemic that has continued for 2 years. Although there are more tourists coming to Phuket, the numbers are still considered low when compared to tourist arrivals in 2020. In addition, the government's policy with the Phuket Sandbox project to help stimulate the economy was not enough to attract tourists to buy the remaining condominiums in the market. Nearly 90 percent of the new units were sold to Russians, with a few Europeans and some Chinese buyers, who come to Phuket annually. They bought the units through agents in Phuket who would recommend interesting and reliable projects. Such foreigners will choose to buy projects that can be managed by hotels and provide rental returns each year. The owners themselves can also stay in the property during their holidays. The remaining 10 percent of buyers were Thai people who purchased condos as their second homes for use during their holidays.

Asking Prices

The average asking price for condominiums in Phuket as of the end of 2021 depended on the views. Units with sea views commanded an average selling price of 196,015 baht per square metre, which has increased from 2020 at the rate of 1.6 percent. In 2020, the asking price of sea view condominiums was 192,758 baht per square metre. In 2021, the asking price of condominiums with partial sea views was 97,541 baht per square metre, a 2.2 percent decrease from 2020, with an average asking price of 99,745 baht per square metre. Condominiums that do not have sea views have an average asking price of 76,526 baht per square metre in 2021 - a 0.45 percent increase from 2020 where the average asking price was 76,184 baht per square metre. The asking prices of condominiums with sea views and without sea views have both increased a little as developers are seeing that the situation is starting to improve, although it may take some time. Also, many projects have plans to be completed, so the prices have slightly increased, and it is expected that if the situation returns to normal, the average asking price will increase by 10 to 15 percent, especially in the sea view category, where more units have been sold than other categories this past year. Some partial sea view condominiums even saw average prices drops. Although some new condominium projects being developed in this category are taking a positive direction and creating price hikes, other such projects have been in the market for a long time. They remained unsold and thus had to be discounted up to 40 percent; as a result, the overall average asking price for partial sea view units has dropped.