Phuket calling: developer offers all 200 flats in single block to Hongkongers as Thailand seeks tourism, economic revival
- Bangkok-listed Origin Property is dedicating all 200 flats in one of the three blocks within a project in Phuket resort island to buyers from Hong Kong
- A 25-square metre unit is priced at the equivalent of US$62,700, about a quarter of the cost a similar-sized flat in the financial hub
The Origin Kathu-Patong, located in Bang Tao on the nation’s most popular beach resort, is a low-rise development comprising 617 flats in the three blocks, a clubhouse and seven retail shops. It is due for full completion by September 2025.
The project is being developed by Bangkok-listed Origin Property and a local partner. They have sold 70 of the 200 units as of 5.30pm local time on Sunday, with sales formally launched on Saturday, a company official said. A 25-square metre unit is priced at the equivalent of HK$490,000 (US$62,700), about a quarter of the cost of a similar-sized flat in Hong Kong.
“The building is the most premium among the three blocks in the project because it is fronting the main road,” said Thanagorn Vutipong, vice-president of business development for the group. “We believe the units are for investment, so Hongkongers need good units, a good building with a very good view.”
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Phuket is the second-most visited destination in Thailand after the capital Bangkok. The island received 13 million tourists in 2019, with foreigners making up three-quarters of them. Arrivals shrank to 9 million last year, slamming tourism revenue to 233.4 billion baht (US$6.8 billion) or almost half of the collection in 2019, official data showed.
Tourism officials have aimed to draw 25 million international tourists nationwide this year, with Phuket expected to play to its strength again as a major attraction. Thailand’s economy shrank 6.2 per cent in 2020 and grew 1.6 per cent in 2021 and 2.6 per cent in 2022. It may expand 3.5 per cent this year, the Asian Development Bank forecasts.
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Foreign investors, including Hongkongers, had always been a significant group of property investors in Thailand. The Origin Kathu-Patong has so far generated about 370 registrations from interested buyers, according to Knightsbridge Partners, the project’s sole marketing agency outside Thailand.
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The developers are allowed to sell up to 49 per cent of the units in a development project to foreign nationals, typically spread over different blocks or phases. It is rare that an entire block in a project is dedicated only to foreign investors, the agency said.
“If the sale goes really well, Origin could offer units in one of the other two blocks to buyers,” said Phoebe Kriel, co-head of Hong Kong-based Knightsbridge.
The return of tourists augurs well for Asia’s second-largest economy and its property market. Foreign investment in real estate averaged 73 billion baht annually in 2018 and 2019, according to government data, and tumbled to 53.4 billion baht annually in the pandemic years through 2022.
The importance of foreign buyers in the Thai property market could not be overstated. Because of the pandemic, sales to foreign buyers amounted to 160.3 billion baht in the three cumulative years through 2022, versus 158.6 billion baht in 2018 and 2019.
Foreign buyers accounted for about a quarter of overall property sales in Thailand in the years before the pandemic, said Peerapong Jaroon-ek, founder and CEO of Origin Property. Their share dwindled to 5 per cent during the health crisis, he added.
The Thai government has been keen in getting more foreign investment by launching schemes such as a long-term visa programme last year. The measure sought to attract 1 million wealthy investors or talented foreigners over five years. Successful applicants will receive a work permit and a 10-year, renewable multiple-entry visa.
A proposal to loosen foreign home ownership from 49 per cent to 80 per cent and land ownership failed to pass because of strong local sentiment against it. Another idea of letting foreign nationals buy up to 1 rai (0.16 hectare) of land if they invest 40 million baht for three years was also scrapped.
Peerapong said Thai developers are hoping for more relaxation of foreign investment rules. Property companies and trade groups are looking to lobby the government to consider allowing foreign ownership of land but limiting it to 20 per cent of landed homes outside the core Bangkok areas or luxury villas in beach towns, where the market is clearly catering to foreign buyers.
“Many foreigners would set up a company or trust to be able to own land here,” he said. “But we want everything on the table. We can start by offering landed property, maybe in the greater Bangkok area, or Phuket or in [certain] specific areas.”
