Around 10,000 new flats will enter Phuket’s market this year, with new project launches occurring weekly, according to property consultancy Colliers, as reported by South China Morning Post.

Unsold inventory in Phuket climbed to 4,982 units across 16 projects by the end of the fourth quarter last year, Colliers noted.

“Developers are counting on the upcoming high season to bring new buyers to the island,” said Nasupha Suwansri, a vice-president at Juwai IQI, a real estate broker managing over US$4 trillion in global property listings.

Houses in Phuket, Thailand. Photo by Pixabay/Michelle_Pitzel

The influx of new supply may exacerbate the oversupply, as Colliers reported a record 14,700 units launched across 56 projects in Phuket last year, with only 64% absorbed by buyers.

This reflects intensifying competition among Thai developers, worsened by Bangkok’s cooling sales growth and rising mortgage rejection rates.

Several major Thai developers have turned to Phuket due to sluggish flat sales in Bangkok, according to Stuart Reading, managing director of group property development at Banyan Group Residences, a Singapore-based resort developer.

“I see that they are in an oversupply situation for those particular projects in Phuket because they are in the range of US$100,000 to US$200,000 projects,” he said. “They have been pushing a lot of these developments.”

Banyan, which has held its Phuket land bank for decades, is not rushing development, unlike Bangkok developers who face pressure to acquire new land and minimize holding costs, Reading explained.

The company plans to launch US$1 billion in luxury residential projects in Phuket over the next two to three years, targeting the high-end market and aligning supply with demand, with Hong Kong buyers among the target customer groups.

T.H Group, marketing its Ayana project in Phuket, is optimistic about foreign investor demand.

The company will host around 100 American passport holders, many Asian-Americans planning to retire in Thailand, to view properties in Bangkok and Phuket later this month.

“This is the first time we have encountered such a large-scale American property viewing group,” said Allen Su, a project leader at Ayana.

Chinese customers in the first quarter remained the largest foreign buyer group for Bangkok flats, but with a 19% drop in demand to 1,481 units worth THB6.12 billion (US$187 million).

“The Bangkok condo market is recovering, but it’s a mixed picture,” said Kashif Ansari, co-founder and group CEO of Juwai IQI.

“Thai buyers are holding back due to policy uncertainty. Chinese buyers remain key to the market.”

In the first half last year, Chinese buyers accounted for 39.5% of all foreign buyers of condo units in Thailand.

They bought 2,872 units worth THB13.2 billion, according to the Government Housing Bank, as reported by Thai PBS.

The top locations for foreign buyers in the period were Bangkok, Phuket, Chiang Mai and Samut Prakan, the bank added.