The global financial crisis will have a short-term impact on Phuket's property market, which has recovered since the second half of 2007, but projects with low pre-sales might face financial problems, said Nigel Cornick, chief executive officer of the property developer Raimon Land Plc.

He said projects with a pre-sales rate of less than 35% might have problems financing project development as financial institutions would refuse loans to a project with low sales.

According to the company's survey, Phuket's villa supply initiated since 2003 is 17 projects and 363 units (63% sold) all currently under development.

The condominium supply is 48 projects with 2,202 units from 2003 until June 2008. Of this total, 22 projects with 752 units have been completed and their units are now 90% sold. Another 26 projects with 1,450 units (49% sold) were under development.

An additional 2,000 condominium units are set to enter the market and 63% of these have been sold.

In the first half of the year, condominium unit sales totalled 2.7 billion baht - a rise of 15% from 2.4 billion baht in the second half of 2007 and up 80% from the first half of 2007.

The coup in September 2006 had triggered a major drop in condominium demand, with the value falling from 2.6 billion baht in the second half of 2006 to 1.5 billion baht in the first half of 2007. However, since the second half of 2007 the value of condominium demand has grown continuously.

The average price of condominiums rose by 8% to 101,203 baht per square metre in the first half, with the average price per unit being 15.9 million baht.

"Those who turn to Phuket can find a good chance of strong long-term returns both in rental yields and capital gains as indicated by the soaring prices of units sold at many luxury projects," said Mr Cornick