Property News

Russians outnumber British as new buyers

Russians outnumber British as new buyers
Property sales in Phuket are picking up, boosted by new demand from Russian buyers while expatriates working in Hong Kong and Singapore are returning to the island.

Piya Sosothikul, the managing director of the Phuket-based developer Erawana Co, said demand was coming from new buyers, especially Russians, rather than traditional buyers in Europe such as the British, whose economy has not recovered.

He said demand from foreign buyers had improved slightly but there was no local demand. More expatriates working in markets such as Hong Kong and Singapore are returning to the Thai market because the Asian economy remains strong.

Erawana's market research shows actual sales for the first half of this year were up by 25% year-on-year. The company expects sales to reach 5.4 billion baht for the whole year, compared with 4 billion baht last year.

Mr Piya, a former Bangkok Bank executive, said the overall Phuket market would remain decent for the next 12-18 months, but still lower than the peak of 2006 when sales were over 10 billion baht. Developers with a solid reputation would do well under the current situation.

But consumer confidence has been shaken as many buyers who paid substantial down payments are unable to get refunds on their villas and condos. There are 29 failed projects out of a total of 168 projects.

This will further delay the total recovery of Europeans who were the big buyers before the economic and financial crisis hit in 2008.

Mr Piya said his company would launch 15 villas at Tanode 3 in the Laguna area worth 300 million baht by the end of this month.

Erawana launched the five-villa Peykaa worth one million baht each earlier this year. Currently it has 20% in sales from both projects and expects to have 150-200 million baht in sales per year.

Established in 2005, the company has developed 11 residential projects worth close to 1.5 billion baht in Phuket comprising more than 120 villas with prices in the range of 15-20 million baht apiece.