Causes of hype and risks of oversaturation
The surge of interest in buying luxury villas on the tropical island of Phuket among wealthy Russians leads to an avalanche-like increase in supply. Developers are actively building new complexes, but there are fears of saturation of this segment of the market.
A strong impetus to the market of elite real estate in Phuket gave a sharp increase in demand from Russia. If before the pandemic the share of Russian buyers was about a third, now, according to various estimates, it reaches 50-60%.
In the first half of 2023, 541 luxury villas and houses with a total value of almost 30 billion baht ($900 million) were put into operation. This is 12 times more than a year earlier!
At the same time, the demand is still significantly behind the supply - of more than 750 new objects sold only a quarter. Experts predict a rapid saturation of this segment, if the pace of construction continues.
What attracts Russians in Phuket
A sharp surge of interest of Russian buyers in elite housing in Phuket is explained by several factors.
Firstly, due to sanctions and travel restrictions, the choice of comfortable destinations for vacation and real estate purchase has narrowed considerably. And Phuket remains a favorite resort, where direct flights from Moscow and St. Petersburg.
Secondly, after the abolition of covid restrictions, the flow of Russian tourists to the island has increased almost 10 times compared to 2021. Many decide to combine vacation with the purchase of housing.
Well, of course, attract relatively affordable prices compared to European resorts. Luxury villas in Phuket start from $1-1.5 mln.
The luxury of privacy: where to buy real estate
Most deals on luxury real estate in Phuket fall on the districts of Laguna, Cherng Talay and Kamala. Here the most popular villas near the sea with their own pools and territory.
These locations combine silence, tranquility and privacy with developed infrastructure and availability of entertainment. Russians like the spirit of Phuket - not hectic and noisy, like Pattaya, and relaxed.
Prospects: grow carefully
Despite the excitement around elite housing, experts advise developers not to hurry to "pump" the market with new supply. Firstly, there are few suitable plots on the first shoreline.
Secondly, in conditions of high competition it is important not just to build, but to create a truly unique product - well thought-out, environmentally friendly and integrated into the environment.
It is too early to expect a sharp collapse or prolonged stagnation of this segment. However, it is already worthwhile to position oneself clearly, act carefully and avoid excessive risks.
Author of the article: Ekaterina Antonova