2
FIGURE 1
Phuket Villa Existing Supply & New Supply, 2008-1H 2016
HIGHLIGHTS
RISINEE SARIKAPUTRADirector, Research and Consultancy
“The primary super prime villa launches have pushed the price of secondary vil-las up in Phuket. There were many re-sale transactions for villas in the past couple years, while the absorption rate of primary super prime villas remained stable.”
Overview
Phuket is growing at a rapid rate with
increases in the numbers of tourists
yearly and massive investments from
both the private and government sectors.
During 2015, there were many super
prime villa projects launching in Phuket.
In the near future, we will see more
super prime villa projects launching
and those super prime villa projects
will be managed by international hotel
chains, located in convenient but tranquil
locations in Phuket. Phuket villa buyers
vary, including about 36 nationalities of
buyers. However, the majority of buyers
are European, Russians and Asians;
the latter are mostly from Hong Kong,
Singapore, Mainland China and Taiwan.
Koreans also love Phuket but they are
customers who rent rather than buy.
Koreans choose Phuket as a honeymoon
destination and they prefer to stay in a
villa during their honeymoon. Super Prime
• TheaccumulatedsupplyofPhuket
Villa as of 1H 2016 was around 2,363
units.
• Bangtaoistheareawherethemajority
of villas are located, with around 39% of
the total supply. The Kamala headland
has become known as a super prime
location for villas in Phuket.
• PhuketvillabuyersareEuropeans
from France, Germany and England.
Australians are also major buyers, with
an increasing number of buyers from
Singapore, Hong Kong, Mainland China
and Taiwan.
• ThedemandforPhuketvillaswas
approximately 1,809 units sold out of
2,363 units, representing the sold rate
of 76.6%, with only 554 units available
for sale. The highest demand during the
first six months of 2016 was the area in
the southern part of the island which are
Rawai, Naiharn and Saiyuan.
• Theaveragenewlylaunchedselling
price of an oceanfront villa as of 1H 2016
wasapproximatelyTHB347.6million
per unit, whereas the newly launched
seaview villa and inland villa were sold
attheaverageofTHB113.7millionand
22.8 million per unit, respectively.
Villa projects are located in the areas of
Kamala,SurinandBangtao.ThePhuket
villa market is so far from the oversupply
stage as the villas have been sold off
plan; developers start to construct such
villas when they have already been
reserved and the buyers have signed
sales and purchase agreements. The
Phuket villa compound is typically small
and cosy, with less than 10 villa units in a
project. The successful super prime villa
project is one that offers the right price in
the right location with management by an
international hotel chain.
Supply
As the first half of 2016, there were
approximately 2,363 villa units along the
west coast of Phuket from Naiyang to
Rawai beach. We have excluded the area
inPhangnacalledNataibeach.Before
the global crisis in October 2008, the new
supply of Phuket villas was around 200 to
2008
0
500
1,000
1,500
2,000
2,500
2009 2010 2011 2012 2013 2014 2015 1H 2016
Existing Supply New Supply
202
748
62
950
82
1,01
213
1
1,09
423
2
1,22
518
4
1,45
721
1
1,64
134
6
1,85
216
5
2,19
8
Source : Knight Frank Thailand’s Research
3
2007
0
500
1,000
1,500
2,000
2,500
2008 2009 2010 2011 2012 2013 2014 2015
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%1H 2016
Supply Demand Sold Rate
748
35.7 %
44.4 %49.9 %
53.4 %
60.7 %
66.4 %
72.1 %76.9 %
72.1 %76.6 %
267
950
422
1,01
2
505
1,09
4
584
1,22
5
744
1,45
7
967
1,64
1
1,19
69,
852
1,42
42,
198
1,58
52,
363
1,80
9
FIGURE 2
Phuket Villa Supply, Demand & Sold Rate, 2007-1H 2016
RESIDENTIAL RESEARCHPHUKET VILLA MARKET REPORT 1H 2016
250 units a year. After the crisis, the new
Phuket villa supply decreased to 62 units
in 2009 and 82 units in 2010. The Phuket
villa market started to picked up again in
2011, with the new villa supply added of
around 131 units. For the first six months
of 2016, there were approximately 165
villa units added to the Phuket villa
supply. The average selling price of the
newly launched units this year was in
therangeofTHB20millionto25million
a unit, compared to the average selling
pricein2015ofTHB65millionto75
million a unit. The majority of the newly
launched units comprised 4-bedroom
villa unit.
The majority of supply was concentrated
inBangtao,withabout916units,
followed by the area in the southern part
of the island, which are Rawai, Naiharn
and Saiyuan, and the area in Kamala,
with about 490 units and 375 units,
respectively.TheBangTaoareawasfirst
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 whilst being
close to the airport. In Laguna, there are
international hotel branded villa projects,
whichareBanyanTreeandDusit.The
sellingpriceofvillamanagedbyBanyan
TreewasintherangeofTHB59to125
million a unit, where the villa managed by
Dusitwaspricedlower,aroundTHB34
million a unit.
The Kamala headland has become known
as “The Millionaire’s Mile”. It established
itself as a prime location for luxury
residential developments, and most
projectssellinexcessofTHB30million.
Developments located there share
common features: low density, beautiful
uninterrupted sea views, and large villas
with a higher number of bedrooms than
average. Kamala has been extremely
popular with certain segments of the
tourist demographic, with Germany and
other Europeans returning year after year.
Scandinavians were also longer-staying
guests, attracted by large, suite-type
rooms. The premium villa developments
in this area are Andara Signature, Ayara
BaanThaiKamala,LaemsonVillaand
much more.
Demand Recently, the Phuket villa buyers are
Europeans from France, Germany and
England. Australians are also major
buyers, with an increasing number of
buyers from Singapore, Hong Kong,
Mainland China and Taiwan. People
buying a villa in Phuket are most often
owners of a property elsewhere and in
many instances, they own two or more
properties throughout the region and
world.
Location is a key factor for sales, and
people pay a lot of attention to the
site, the views, and the immediate
environment, including other
developments and the availability of
amenities in the immediate area. Also,
branded hotel management is a must for
luxury villa buyers.
Source : Knight Frank Thailand’s Research
4
The demand for Phuket villas was
good as of the first half of 2016, with
approximately 1,809 units sold out of
2,363 units, representing the sold rate
of 76.6%. There were only 554 units
available for sale. The highest demand
during the first six months of 2016 was
the area in the southern part of the
island, which includes Rawai, Naiharn
and Saiyuan.
Selling Price
In terms of pricing, location remains the
key factor. Oceanfront villas with nothing
blocking the view command higher
prices. Sea view villas with panoramic
sea views located far from the beach
come in the second rank. As properties
with sea views become rarer, their re-
sale value also increases. Developments
are now emerging inland with no clear
natural assets. Priced considerably
cheaper, they represent good value for
money. New parts of Phuket previously
overlooked are becoming popular.
Proximity to the airport is no longer a
requisite but successful projects have
easy access from the main roads and
facilities either within the project or
nearby.
The historical price appreciation of
Phuket’s real estate is a strong pull factor
as is the potential for rental income.
Beforethe2008crisis,thesellingpriceof
an oceanfront villa from a newly launched
projectwasTHB168.5millionaunit;
after 2008, the average new unit price
increasedtoTHB132.5millionaunit,
and in the first half of this year, the price
wasTHB347.6millionaunit.Theunit
specification will be higher, and the villas
are on a larger land plot, with spacious
internal areas and management by a
international hotel chain. In the first half
of 2016, the newly launched sea view
villawassoldatanaverageofTHB113.7
millionaunit,increasingfromTHB63.8
million per unit in 2007. The inland villa
wasTHB22.8million,increasingfrom
THB19.5millionin2007.
Outlook The Phuket villa market outlook seems
good. The new luxury villas launched
have pushed the price of resale villas in
Phuket. There are many transactions of
re-sales villa units where the sale of a
new villa in the primary market is quite
slow. The villa segment that performed
well during the first six months of
this year was the villa with the selling
pricesbelowTHB20millionaunit.The
emerging location of the villa is in the
southern part of the island, due to close
proximity to Phuket Town. There are
many private development projects, for
instanceBluPearlbyTheMallGroup.
The absorption rate of a Phuket luxury
villa(pricedoverTHB100millionaunit)
is slow. The average selling price in the
secondary villa market increased sharply,
while the primary villa market remained
stable. There are some successful
developers of Phuket condominiums
entering the villa segment; for instance,
the developer of Aristo Condominium.
Villa Type
Knight Frank has defined three types
of villas in terms of their views and the
proximity to the beach as follows:
1. Oceanfront or Beachfront Villas
are those that are located in the front
directly facing the ocean, with nothing to
block the view, or villas located right on
the beach, with beach access.
FIGURE 3
Avg Selling Price of Newly Launched Villa by Villa Type, 2007-1H 2016 (THB Million)
1H 2016
In land
SeaView
ceanfront
2015 2014 2013 2012 2011 2010 2009 2008 2007
22.815.413.912.116.610.618.319.332.219.5
113.7113.6
347.6347.5
23.324.2
35.748.2
54.268.5
78.2132.4132.5
168.5
23.325.340.648.658.063.9
Source : Knight Frank Thailand’s Research
5
For the latest news, views and analysison the world of prime property, visit
KnightFrankblog.com/global-briefing
GLOBAL BRIEFING
Thailand Contacts
Phanom KanjanathiemthaoManaging Director+66(0)[email protected]
Chaturawit WattanaprukExecutive Director+66(0)[email protected]
Surasak Limpa-ArayakulExecutive Director, Head of Valuation and Advisory+66(0)[email protected]
Roong SitthisankunchornExecutive Director, Head of Property Management+66(0)[email protected]
Marcus BurtenshawExecutive Director, Head of Commercial Agency+66(0)[email protected]
Frank KhanExecutive Director, Head of Residential +66(0)[email protected]
Risinee SarikaputraDirector, Research and Consultancy+66(0)[email protected] Phuket ContactNattha KahapanaExecutive Director, Knight Frank Phuket+66(0)[email protected]
Important Notice© Knight Frank LLP 2016 – This report ispublished for general information only andnot to be relied upon in any way. Althoughhigh standards have been used in the preparation of the information, analysis, viewsand projections presented in this report, noresponsibility or liability whatsoever can beaccepted by Knight Frank LLP for any loss ordamage resultant from any use of, reliance onor reference to the contents of this document.As a general report, this material does notnecessarily represent the view of Knight FrankLLP in relation to particular properties or projects. Reproduction of this report in wholeor in part is not allowed without prior writtenapproval of Knight Frank LLP to the form and content within which it appears. KnightFrank LLP is a limited liability partnership registered in England with registered numberOC305934.Ourregisteredofficeis55BakerStreet, London, W1U 8AN, where you maylook at a list of members’ names.
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2. Sea View Villas are the villas that
are located on a cliff or hill, providing
panoramic sea views; however; the
villa may be located further back, at a
distance to the beach.
3. Inland Villas are the villas that are
emerging inland with no clear natural
assets. The projects may be located in
close proximity to the beach but they
have no sea views or are located inland
at quite a distance to the beach.
Knight Frank has classified villas into
four categories :
Villa Category
Super Prime Villa
• SellingpriceoverTHB50million
• MostlybeachfrontorOceanfrontVilla
orBrandedHotelVilla
• Goodandsecureneighbourhoods,
ensuring privacy of residents
• Goodbuildingdesign,layoutand
decoration
• Goodstandardofconstructionusing
high-quality materials and
specifications
• Comprehensiverangeoffacilities,
including swimming pool, gym, squash
and tennis courts, etc.
• Professionalmanagement/hotel
management
High-End Villa
• SellingpriceoverTHB30millionbut
lessthanTHB50million
• Seaviewfromtheunitand/orclose
proximity to the beach
• Goodandsecureneighbourhoods,
ensuring privacy of residents
• Goodbuildingdesign,layoutand
decoration
• Goodstandardofconstructionusing
high-quality materials and
specifications
• Professionalmanagement/hotel
management
Mid-Range Villa
• SellingpriceintherangeofTHB20
million to 30 million a unit
• Majorityarenon-seaviewbutlocated
in a good community and near
facilities and amenities
• Moderatestandardofconstruction
using moderate-quality materials and
specifications
• LocalManagement
Economy Villa
• SellingpricelessthanTHB20million
a unit
• Noseaviewfromtheunit
• Locatedquitefarfromthebeach,
facilities and amenities
• LocalManagement
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