Only two luxury villas were sold in the last quarter of last year: one in The Residence by Anantara in the THB 200- 500 million range and the other one in Sri Panwa Luxury Pool villa in the THB 200-300 million range.
“We believe that the overall Phuket villa market will remain slow with limited new project launches. Purchasers are starting to take into account the viability of the rental programs as it highly depends on the developers’ ability to manage and market the property to have daily rentals”, write CBRE in a new report.
The Phuket Villa market remained slow even with the increase in the number of villas sold from 28 to 35 in this quarter. Most sales came from the lower-end segments (THB 5-35 million per unit) driven by investors seeking rental yield returns of around 5-7% for 2-5 years.
There were two projects launched in this quarter. One was an entry-level villa (THB 5- 15 M), The Aristo Villa, and the other one was a mid-range villa (THB 15-35 M), Anchan Hills.
Ninety percent of condominium sales in this quarter came from entry-level products (less than THB 8 million per unit). At least 85% of sales came from projects offering some form of yield guarantee. Forty-eight percent of sales came from projects offering guaranteed yields that will be managed by recognized hotel brands such as Best Western and Wyndham. The upscale property segment priced above THB 15 million per unit was stable with 56 units sold in Q4 2016.
“We saw a slowdown in new project launches with just three launches in Q4 2016 compared to five in Q4 2015”, according to CBRE.
Buyers at all price levels are seeking rental income while only using the property for their own stay for less than 60 days per year. Western expatriates working in Asia and affluent Thais from Bangkok continued to be the main buyers of resort properties in Phuket. There are also Chinese investors in certain entry-level projects.