Phuket Property Market Outlook 2019
DEMAND – A STRONG DRIVING FORCE
Globally acclaimed for its unrivalled beauty, Phuket welcomed a total of 3.5 million tourists during the initial four months of 2018, expressing a 19% upsurge in visitation as compared to the same period in 2017.
The significant increase in tourist visitation was led by international passenger arrivals at Phuket International Airport, which grew by 28% from 1.5 million to 2.1 million in 2018, accounting for 59% of the total passengers in the first quarter of 2018.
To capacitate demand, there was a substantial uptick to international flights, which represented a 27% year-on-year growth rate. The dominant factor that immensely contributed to the increased number of flights is the unstoppable demand from Mainland China and Russia. As of May 2018, there were approximately 23 new routes to Phuket, of which 19 routes were direct flights from Mainland China.
The growth of international arrivals into Phuket in 2018, displays a definite uptrend in the island demand and popularity. With escalated arrivals, comes an escalation in accommodation occupancy rates, attracting astute investors to the property market that as per tourists’ accommodation demands, promises a high and sustained return on investment in 2019.
RECORD-BREAKING OCCUPANCY RATE
A strong indicator of an uptrend in the Phuket Property Market in 2019 is the breakage of the 12-year occupancy rate record of the island. The basis for the stark escalation in occupancy numbers is naturally correspondent to the rise in tourist visitation, essentially signifying that investors who invest in lodging establishments, such as luxury villas in Phuket, are inclined to earn a substantial rental income derived from high number of tourist visitations.
According to STR Global, the occupancy rate in February reached its highest level in 12 years, settling at 95.4%. The average occupancy rate for the first quarter also broke the 90% level for the first time since 2010, settling at 91.2%. The overall phuket hotel occupancy rate in the first half of 2018 reached 80% for the first time since 2010.
The Average Daily Rate (ADR) for the first half of 2018 increased by 6.9% from THB 4,056 to THB 4,292.
ESTABLISHMENT OF A SECOND AIRPORT IN PHUKET
Another apparent indicator displaying a positive outlook for the Phuket property market is the construction commencement of a second Phuket Airport that will add greater sustained airlift capacity. To be developed by AoT (Airports of Thailand), the project carries a budget of THB 60 billion expected to commence in 2019 and open by 2025.
Gathering momentum from increases in tourist visitation, higher occupancy and average daily rates, as well as the establishment of a second airport, the property market of Phuket undoubtedly portrays a positive outlook that will be seen all through 2019, promising investors attractive rental yields and rewarding capital gains should they decide to invest.
KASA Development, an elite real estate developer in Thailand, offers properties for sale in Phuket, that are guaranteed to generate high rental returns for the astute investor. The remarkable residential project, Dune Phuket Residences, comprises of luxury private pool villas. Strategically placed on prime real estate in Phuket, the project promises investors a valuable property investment in Thailand.
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