Phuket property condos and luxury villas sell out

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From The Nation

Phuket’s property market has returned to pre-pandemic levels and all finished condo units and villas with pools have been sold, most of them to foreign nationals, according to the Phuket Real Estate Association.

Phattanan Phisutvimol, its president, said the surge in sales of condominiums and luxury villas started after the Covid-19 pandemic receded last year.

Sales have surged to pre-pandemic levels and 823 real-estate projects, including hotels, were approved for construction last year, she said, adding:

“This year will be the golden year for Phuket’s property market. The boom will continue.”

A total of 4,163 condo units and houses in the island province were transferred to buyers last year, compared to 4,398 units in 2019, according to the association. The annual number fell to 2,767 and 3,143 units in 2020 and 2021, it said.

Phattanan attributed rebounding sales to Europeans, especially Russian and German tourists and investors. Many bought condos or houses in the name of a Thai spouse, she said, adding that demand for condos started to rise in May of last year.

About 28,000 condo units are registered in the island province and the number of transfers to buyers matches that number. Members of the association say villas with pools are also sold out, Phattanan said without providing a number.

She expects demand for real estate on the island to rise further as more Chinese buyers return. Chinese nationals had booked then cancelled about 5,000 units during the pandemic, and they will likely return, she explained.

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From Bloomberg: 

Rich Russians isolated from the West are flocking to Thailand’s Phuket

PHUKET, Thailand - Russian businessman Alexander Nakhapetov has been a regular at the “banyas” in his adopted home of Phuket ever since several of the traditional steam baths opened in 2022.

Lately, though, the 41-year-old’s routine has been disrupted by an influx of his countrymen to Thailand’s biggest island – which has resulted in those new bathhouses being fully booked most of the time.

While Phuket has long attracted Russia’s wealthier citizens, the influx is accelerating as President Vladimir Putin’s war in Ukraine makes competing destinations in Europe and elsewhere harder to enter.

The number of villas sold on the island in 2022 surged 82 per cent to 338, about half of which were purchased by Russians, according to real estate agency Knight Frank Thailand. Enterprises from restaurants to saunas and concerts have sprung up appealing to the new clientele.

Some 791,574 Russian nationals arrived in Thailand between January and June, an increase of more than 1,000 per cent compared with the same period in 2022, according to the Thai Tourism and Sports Ministry.

More than half that number flew directly into Phuket airport, and they were the No. 1 source of tourists to the island in 2023, according to the Phuket Tourist Association.

Russian speakers are the biggest single nationality of buyers in Phuket at FazWaz Property Group, said Mr Christian Steinbach, sales director, who in 2022 made one of his most-lucrative deals when one Russian buyer snapped up 16 villas.

“You can generate high rental returns,” he said. “And there are many people who just want to live in a nice place.”

In a sign of the island’s importance for expanding Russia’s diplomatic reach in South-east Asia, Foreign Minister Sergei Lavrov officially opened a consulate on Phuket in July and met with his Thai counterpart during his visit.

The diplomatic office is within the Royal Phuket Marina, a seaside community that includes moorings for yachts and apartments and stand-alone villas priced from about US$300,000 (S$400,000) to multiple millions.

While countries in Europe and the Middle East have long been the main havens for Russians, Thailand’s beaches, nightlife and openness in places like Phuket, Krabi and Pattaya provided an affordable alternative in Asia even before the war in Ukraine started in February 2022.

Since Mr Putin began his invasion, the European Union has made it harder for Russians to travel to the bloc, with many direct flights to European cities abandoned. That has pushed people to countries with easy-visa entry such as the United Arab Emirates, Turkey and Thailand.

Indeed, Thailand has introduced several new visa programmes over the past year that allow longer stays for those who bring in money or special skills – such as in the IT, social media and crypto-asset industries, according to Ms Prakaipeth Meechoosarn, head of Phuket property sales at the Thailand unit of CBRE Group.

Concurrently, the resort islands in the southern part of the country have also attracted many similar specialists, digital nomads and young families fleeing Ukraine.

According to Ms Elena Marinicheva, vice-president at Russia Sotheby’s International Realty, a typical Russian buyer in Thailand might be an entrepreneur in their mid-30s from the eastern part of the Federation, such as Vladivostok. But increasingly, investors from Moscow and St Petersburg are seeing the Thai market as more and more attractive, she said.

That has helped create an array of cottage industries. For example, Mr Alexander Nakhapetov said his entertainment business is booming. A 250,000 baht (S$9,650) box at a Russian rock concert he organised in Phuket’s Laguna Grove earlier in 2023 was sold out within the first hour, he said.

In December, he is helping to organise a performance by the St Petersburg State Academic Ballet Theatre on the island.

Sanctions have weighed on transactions, with Visa and Mastercard among the many global financial firms that suspended operations in Russia after the invasion of Ukraine. Still, people have found workarounds such as linking to platforms of China UnionPay, digital assets, as well as paying with cash denominated in dollars and euros. As time goes on, though, it is getting more difficult to transfer funds out of Russia – and the rouble has also weakened against the Thai baht, Mr Steinbach said.

Thais – especially those in the southern islands – are adapting to the needs and habits of Russian visitors. Phuket International Airport makes announcements in Russian. Many shop names and street signs are in Cyrillic. Street vendors sell borscht and blini side by side with local classics such as pad thai and spicy tom yum soup.

Russian restaurant chain Veranda recently opened its fifth Thailand location, adding to the eateries and food shops across the island. Mr Nikolay Batargin, the owner of Chekhoff restaurants in Phuket, recently opened his third location serving Russian cuisine. Business was particularly “mad” during island’s high season from November to April, he said.

Super-rich

Thailand’s appeal extends to the super-rich. The 237-foot yacht Cloudbreak, believed to belong to Russian real estate tycoon Alexander Svetakov, was spotted in Phuket last Christmas, according to data compiled by Bloomberg.

Construction materials billionaire Igor Rybakov held business-coaching classes for a group of 20 on the island in January, starting with qigong exercises to relax the participants.

“Everyone is welcome in Thailand,” restaurateur Batargin said.

While commerce has boosted the economy and provided much-needed jobs in tourism- and investment-dependent Phuket and Krabi, the influx of Russians has also pushed some potential buyers from Thailand and other nations out of the market. Local workers are also feeling the sting of inflation on basic goods and their own rents.

But in the wake of Covid-19, most people are willing to put up with side effects as long as Thailand remains an escape from war, sanctions and vitriol. Indeed, tolerance is a mantra for those who come to vacation or find new homes in Thailand’s islands.

“The atmosphere for everybody is wonderful and peaceful,” said Mr Yuri Vorona, manager of Roadhouse restaurant in Phuket, which caters mostly to Russians and their Thai friends – but sometimes Ukrainians come for a meal.

“We have everyday Russians, who just want to rest and not fight.”