Phuket: “Treasure Island” for foreign investors
Thailand is the second most popular country in Asia after China. According to the World Tourism Organization, in 2017, tourists from abroad visited Thailand 35 million times. And according to the forecasts of the World Tourism and Travel Council, by 2028 this number will reach 60 million.
Phuket is one of the main tourist destinations of the country. Investors from all over the world are investing in infrastructure development on the island. However, Phuket is not only interesting to big businessmen – investors with a small budget also have the opportunity to earn on local real estate related to the hospitality industry.
One of the main reasons for the popularity of Phuket is the climate: the sun in Phuket shines more than 200 days a year, and the average temperature is 30 ° C of heat. Love Rawai Production
Tourist boom – a signal for investors
The success of investments in hotel property is directly related to the flow of tourists, and the popularity of Phuket is growing. According to the organization “Airports of Thailand”, in 2017 Phuket International Airport received 9.2 million passengers from abroad – 13% more than in 2016. The total passenger traffic of the airport, taking into account domestic flights in 2017, amounted to almost 17 million people.
The Chinese are the most frequent guests on the island. According to statistics, most passengers arrive in Phuket from Singapore, Kuala Lumpur, Hong Kong, Shanghai, Inchon, Dubai, Doha, Chengdu, Moscow and Chongqing. In 2017, Phuket Airport began cooperation with several other Chinese airlines and the Italian Neos Flight, Turkish Airlines and the Vietnamese company Vietjet Air.
Most tourists come to Phuket from January to March, and in September and October – the rainy season of Love Rawai Production.
Condominiums – the most popular property for investment
The rapid growth in the number of tourists stimulated the development of the local real estate market. Construction companies from Thailand, China, Singapore and Hong Kong are actively building infrastructure facilities that will attract even more tourists to the island, and buyers of profitable real estate are interested in receiving rental income and an increase in the value of objects in the future.
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One of the most popular types of real estate investment is condominiums, residential complexes with a common area and infrastructure. According to experts of the Phuket 9 construction company, such objects are allowed to be issued to foreign citizens’ property and then leased: “The condominium management company obtains a hotel license – a document that allows owners to rent apartments for daily rent and make a profit”. When buying an apartment in such a complex, the investor signs a sublease contract with a fixed income, the amount of which ranges from 5 to 10% per year, depending on the contract validity period or other conditions.
According to the international consulting company CBRE, from 2004 to 2017, the number of residential units in condominiums on the island increased from 447 to 7.7 thousand. By 2022, another 4.7 thousand apartments are planned to be completed. In the second half of 2017, more than 600 residential units were sold – a quarter more than in the same period a year ago.
The most frequent buyers of apartments in condominiums – investors from China. Behind them, with a large margin, followed by the citizens of Russia Love Rawai Production
Having a license is an important criterion when choosing a project
One of the most frequent problems faced by developers in Phuket – the need to obtain a license that allows you to legally rent property to tourists. Such a license is necessary for large complexes and for private apartments or villas. Objects without a license can only be leased for a long-term lease for a period of 30 days or more.
How does this requirement affect apartment buyers in condominiums? If they invest in objects at the construction stage, then there is a risk that the start of work will be delayed due to the protracted process of obtaining permits. “Thus, it is safer to make a purchase in projects where the actual construction has already begun,” say experts from Phuket 9.
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A list of Phuket new condominium projects with information on the start-up of construction, rates of guaranteed income, the initial cost of apartments and contact details of the developers can be found on the website of Phuket9. “We are trying to assemble a complete base of projects on the island so that a potential buyer can independently analyze and evaluate offers on the Phuket real estate market. In fact, this is a list of our “competitors”, but this information puts us all in a fair, open game. It develops the market, attracting more investors. And as they say, “the tide raises all the boats.” I’m sure our buyer will choose us, ”comments Denis Prsechuk, Phuket 9 sales manager.