Real estate developers are working on large-scale projects to attract the wealthy in China and Russia to Southeast Asian resorts in Phuket, Thailand, and Danang, Vietnam, the Nikkei reported on the 1st. According to Savills, a British real estate service provider, Asia accounts for more than 20% of the global brand housing market. The place where the most projects are underway is Phuket, with 22 projects, including a plan completed. Ho Kwon-ping, chairman and founder of high-end resort developer Banyan Group, expected Phuket to transform into a community where people gather around the world. Banyan Group is already developing up to 6,000 condos and other homes in Phuket’s Laguna area, where the resort is located. It expects to generate a total of $2 billion in sales. According to Canadian real estate service company Colliers, Phuket’s supply of condominiums more than doubled from 2019 to about 8700 units in 2023. In the south of Phuket, 60% of real estate buyers in the first quarter of 2023 were from China, followed by Russians with 25%.A sales representative at Phuket SKN Real Estate said purchases by Chinese and Russian buyers were up 70 percent compared to pre-pandemic levels. Many of the buyers are in their 40s and 50s and have a monthly income of at least 200,000 baht (about $7000). In particular, since Russia’s invasion of Ukraine, purchases by Russian investors have soared as the wealthy struggled to live elsewhere during the war. “The warm climate in Southeast Asia has already fascinated Russians, and the fact that few countries in the region impose sanctions on Russia has made it easier for Russians to buy real estate,” Nikkei said. A banner reading “Where You Are Now is Where to Live” is hanging at the construction site, a 10-minute walk from a luxury hotel on Phuket’s western coast. This is an area where the real estate development department of Thai conglomerate Central Group is developing a condo called “The Standard” that can accommodate 190 households at a cost of 5 billion baht (about $139 million). Condominium prices, which will be completed by the end of 2026, start at 12 million baht (about $400,000). The Standard entered Thailand in 2021 when it opened a hotel in Phuket Huahin. It plans to work with local real estate developer Sansiri to build a residence that provides hotel-level services and amenities suitable for long-term stays. It has partnered with local developers IFF Holdings and Marriott International to build a resort called Le Meridian in Da Nang, Vietnam. In Bali, Indonesia, Thai hotel chain Minor International has created a residence named Anantara. The Thai government did not miss the opportunity to attract the wealthy around the world. In 2022, approximately 5600 long-term residence visas were issued to the wealthy. This is a 160% increase from 2019. Bangkok introduced new long-term residence visas for highly skilled professionals and others in September 2022 and received approximately 4,800 applications for the first time.
However, some are concerned about the rapid housing development. “The transition from farmland to development will undoubtedly have an impact on reducing previously existing green space,” Nikkei said.
EJ SONG
US ASIA JOURNAL
