C9 Hotelworks Market Research – Phuket Luxury Real Estate Growth
Phuket’s sizeable mega-villa property sector has experienced an unexpected surge in multi-million-dollar sales over the past year as Thai buyers sought refuge in the global Covid-19 crisis. Over THB5 billion (approximately USD167 million) in primary and secondary high-end properties transacted at the height of the pandemic.
According to new market research from Thailand consulting group C9 Hotelworks, transactions in 2020 in top tier real estate hit its highest level in five years despite flat trading levels in the broader marketplace. Expansive tropical island mansions with four, six or more bedrooms have struck a chord with wealthy Thai’s who have been unable to travel overseas and are fatigued by mounting air pollution issues in the nation’s capital.
Speaking about the transaction charged revival in the island’s mega-villa sector, country living and estate villas in the age of pandemic are a strong reaction driven by both internal and external factors. Thailand’s wealthy have been effectively stranded in the country for nearly a year and the impact has seen them revisiting and falling in love with Phuket. Resort real estate remains an emotional proposition and this is a contributing factor in reigniting luxury property sales.
Aside from the Thai segment, there is more to the Phuket real estate backstory. There’s off plan and completed properties in the primary market, whereas secondary or resales has seen some deep discounting of large villas to overseas buyers. C9’s research has identified one source of these to be the global luxury marketplace Concierge Auctions. One of the key factors that the group has been able to effectively harness is creating competitive tension by means of an auction and inducing demand though the perception of value creation.
Taking a sharper look at locations recording mega-villa trades, C9 data reflects that Millionaires Mile in Kamala, Layan and Nai Thon Beach, all on the West Coast of the island are favorites. While on the East Coast, Cape Yamu continues to perform strongly with the new Headland project. Phuket’s luxury footprint is now also firmly expanding over the Sarasin Bridge into a Greater Phuket catchment with the Aquella integrated golf course community underway.
Noting how proximity of projects is key to success and that there is often only one degree of separation between buyers in mega-villa estates. One of the most successful twining of projects last year has been the ultra-luxury Layan Residences by Anantara and Avadina Hills by Anantara. The synergy of having a hospitality overlay and hotel-style management to the developments has helped enormously.
While forecasting how 2021 and beyond will see the Phuket luxury property market fare, there is optimism for primary residences as we are seeing considerable interest from Bangkok high-net worth individuals and key regional capitals like Hong Kong and Singapore who are drawn to the island by clean air and space, quality international schools, and strong support infrastructure.
We are on the cusp of seeing a series of new inland integrated communities such as Tri Vananda in Thalang come on stream and this is expected to shift a larger slice of demand towards luxury single family homes. Covid-19 has refocused an entire generation on the value of work-life balance and proven work from home is a viable ongoing alternative.