Fewer than 10 new luxury villas (priced at more than THB90 million) sold last year, according the new research on the Phuket market published this week by CBRE Thailand,
In its Q2 2014 Phuket Residential MarketView report the real estate firm noted that during the first sixmonths of this year only three units have been sold in the price bracket.
Anantara Estates by Minor International and Avadina Hills by Kajima on Layan beach, with prices of between THB200 and THB300 million per villa, have held soft launches to selected potential purchasers.
There was a wide choice of completed villas available in the resale market and there were more re-sales than new sales in the luxury villa segment.
CBRE said: “We continued to see growing demand for affordable resort villas, priced between THB5 million and THB15 million – which was the best performing sector.
“Laguna Village Villa and Wing I-V were the hottest projects in this segment with 13 units sold. The nationalities of villa buyers in this quarter included Russian, British, German, as well as some buyers from Hong Kong and Singapore. These buyers mainly focused on the affordable villas with prices less than THB30 million.”
CBRE added that developers have focused more on launching lower-end villa projects with one new mid-range project (THB million 15 to THB35 million) launched in this quarter, and more than ten projects scheduled to be launched later this year.
The villa market slowed down in Q2 2014, with a total of 69 villas reported sold according to the real estate firm. This compares with 89 villas in Q1 2014. The entry level market sector (THB5 million to THB15 million) was the most active in terms of sales volume.
The best-selling product was the one-bedroom unit with a sellable area of between 30 sqm and 40 sqm with a price range of between THB3 and THB5 million, it noted. The best-selling projects all offered a rental package programme, but not all developers were offering a guaranteed yield.
Developers of condominiums targeting investors were suggesting or guaranteeing that gross yields of between 6 percent and 8 percent can be achieved on the base price.
The increase in land prices and construction costs in Phuket means that almost all new resort developments in the luxury category have to be priced on a per square metre basis, but unit sizes have become much smaller with the typical unit sold being one-bedroom of 30-40 sqm.
The nationality of purchasers is very fragmented and depends very much on the product and who is marketing it.In order to succeed, condominium developers now need to sell with a rental programme providing buyers with income and 30-60 days personal use per year, the agency said.
CBRE added that it has seen developments with the Russian sales teams experiencing some success in selling units to Russians, with the same happened to developers with Chinese sales teams. There has also been some evidence of Bangkok-based Thai investors buying purely for rental income but not in significant numbers.
CBRE concluded: “Looking forward, we do not expect that there would be a significant change in the near future. We think there will be a limited number of new launches and no big jump in the number of purchasers.”
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
