Tourist may be returning to the island in droves but Knight Frank Thailand believes the Phuket condo market is still in recovery mode. That being said, the sales rate did increase, and the consultancy highlighted a handful of positive factors that could potentially help the situation return to pre-pandemic levels in the future.

“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,” Khun Nattha Kahapana, Knight Frank Thailand Managing Director, detailed. “The overall condominium market may need some time to recover. In the past, the main purchasing power was from Chinese investors but due to travel restrictions and the dwindling Russian market during the escalating conflict, including restrictions on international money transfers, these tourists and investors have almost disappeared. However, if these buyers return, they will bring confidence back to developers because they have the potential to help the condominium market recover faster.”

COVID-19 hit Phuket particularly hard given the fact its economy is driven by tourism. This impacted the condo market more than other residential property sectors. Knight Frank point out that condo units are very popular with foreigners since they can be used for both personal holiday and income-generation purposes. Both were made difficult due to travel restrictions.

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“The COVID-19 pandemic 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,” Khun Nattha said.

According to Knight Frank Thailand, there were 20,376 condominiums sold in Phuket out of a total supply of 26,068 units at the end of 2021. Many homebuilders have opted against launching new condo projects over the past two years which has seen the sales rate improve despite the number of units sold declining steadily over the past two years.

Keep Reading: Tourism reopening boosts Phuket residential property market