Property-sales activity has rebounded in Phuket, according to global property-services firm CB Richard Ellis (CBRE).
CBRE, which tracks sales through its Phuket office and research team, said there were more sales and active enquiries in the first quarter of this year than in 2010, signalling a recovery in the market.
CBRE (Thailand) chairman David Simister told a recent conference on resort markets that Phuket remained the pinnacle destination for second-home purchases in Southeast Asia, with the villa market topping the charts in terms of the range of high-end developments and the prices paid.
Neighbouring countries’ resort markets do not have the same international desirability as Phuket, he said. The Vietnam market has a significant number of new projects, but is only really attractive to domestic buyers. Bali, Phuket’s main competitor, attracts neither the same volume of tourists nor, more importantly, high-income individuals and property buyers.
Simister said the period from 2008 to the third quarter of 2010 saw a slowdown in the market triggered by the global financial crisis, although Phuket prices held firm and there were very few distressed sales.
However, there was a clear shift from off-plan sales to resale units. Within the resale market, hotel-branded villa products with a good reputation and good management were the top performers, with Andara being the most desirable.
As the most successful hotel-branded sales project on the island, Andara has delivered both quality and luxury, with high attention to detail and immaculate standards, all of which ticked the right boxes for buyers, Simister said. CBRE was delighted to be involved in the success of Andara, advising clients on six transactions. The development has now sold out.
A recent Phuket Report from CBRE Research shows that the latter part of 2010 was the turning point for the villa market, with activity increasing in the luxury sector. The high season continued to drive interest, with more than 20 villa transactions in the first quarter of 2011, indicating increased buyer confidence.
However, developers cannot become complacent. While the market shows signs of recovery, the report says developers should realise that the number of buyers is smaller, the buyer profile has changed and the criteria for successful sales is much more precise.
CBRE research shows that sales activity is now dominated by end users, rather than by investors who buy for capital appreciation and rental returns.
“We are seeing many more inquiries and increased sales from high-net worth individuals, especially from Russia and India,” said CBRE Phuket’s director of resort residential sales Prakaipeth Meechoosarn. These buyers are successful business people and entrepreneurs; they are financially independent and are typically seeking large four- and five-bedroom pool villas that offer high quality fittings and finishes in a good location with ocean-front views. These buyers want to take advantage of a luxury tropical lifestyle without the forced restrictions of leaseback schemes or compulsory rental pools, he said.
At the other end of the market, CBRE also noted an increase in demand for entry-level villa products priced between Bt5 million and Bt10 million. Demand in this segment is predominately from European residents who prefer completed or significantly completed developments.
In all market segments, the west coast of Phuket is the preferred location. Some buyers are opting to move to Phang Nga to obtain ocean-front property rather than purchasing inland or on the island’s east coast, the firm said
Source: The Nation