Knight Frank Thailand On Phuket Property Investment

Knight Frank Thailand have released highlights on investing in property in popular Thai resort areas, including Phuket.

“Investment in property in Thailand’s popular resort areas continues to attract interest from local and foreign buyers,” says Ms. Risinee Sarikaputra, Director, Research and Consultancy Department of Knight Frank Thailand. “While such activity has slowed, each of these markets retains specific attributes that continue to drive sales and new project developments.”

Investing in Phuket Condominiums:

The Phuket condominium market has transformed itself to accommodate the change in buyers’ preferences, as well as reflecting the scarcity of land. Prior to 2008, the condominium supply in Phuket tended to include larger sized units of over 100 square metres 84% of supply were units larger than 70 square metres and only 16% of the supply were units smaller than 70% square metres.

From 2008 to 2014, 82% of the total supply included units smaller than 70 square metres, with 18% of units being larger than 70 square metres. This represented the shift in buyers’ intention from self-occupancy to pure investment purposes.

“For investing in Phuket condominiums, a good area would be the western coast of Phuket, from Maikhao to Rawai beach. The compact one-bedroom unit has investment potential; however, the two-bedroom sea view units, from 71 to 99 square metres, would be even better due to the scarcity of such units,” explained Ms. Risinee. The CAGR of sea view unit in Phuket was 5.2% from 2007 to 2014.

Investing in Phuket Villas:

“Phuket continues to attract its fair share of extremely wealthy foreigners and property investors, but the number of foreigners willing to spend 100 million baht or more for a luxury villa has been dwindling,” she added. This year, Phuket has been attracting more mass-market travellers, notably Asian and Chinese nationals whose numbers help offset the drop in jetsetters. Villas were still selling, but the number was more modest, though still priced beyond the means of most buyers.

Previously, the demand on the island was for large lifestyle villas, with usable areas of at least 1,600 square metres and a selling price point of 100 million baht or more. But lately, demand was highest for villas priced below 20 million baht, with 690 out of 950 available units sold in this price range, or 72.6%. Most villas in this range have two to three bedrooms, with usable area of 200 to 300 square metres.

The interesting location for investing in Phuket villas are along the western coast; however, the areas with more complete facilities and amenities for daily living are in Bangtao and Patong, for example. The Bangtao area was first developed with the Laguna project. In the time following the inception of Laguna, several high-end projects came on the market, followed recently by more middle market developments and economy villa projects.

“The Laguna area remains a very sought after part of the island due to the range of facilities in the area and proximity to the airport.  There are also international hotel branded villa projects, including Banyan Tree and Dusit,” said Ms. Risinee. The selling price of villas managed by Banyan Tree was in the range of 59 to 125 million baht a unit, whereas the villas managed by Dusit were priced lower at around 34 million baht a unit.

She added, “Ideally, though the villas do not have sea views, the distance to the beach should be short. The surrounding environment of the villa project should be peaceful and tranquil.”


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