Market Swell: 'Supersizing' Villas
The Phuket Gazette.
Thailand's and Phuket's luxury real estate market has caught the tailwind of US$76 million worth of transactions involving 14 "UltraVillas" in the first eight months of this year.
UltraVillas are properties with over six bedrooms and cost over US$ two million.
Research carried out by C9 Hotelworks highlighted resales in the sector as a driving force in this year's high sales, bolstered by a surge in wealthy Asian buyers.
A growing appetite of the rich and famous to 'supersize' their homes, saw Beyond Villa at Natai Beach, Phang Nga sell for a reported US$24 million. The popularity of resales in the UltraVilla sector call be attributed to a 'failure to launch" during the past two years by developers, with only 77 new properties being built, with a market value of US$329.
Resales have eclipsed 83% of the sector's total market sales.
C9's mid-year Luxury Villa Market Update reported that the 'upscale' market segment registered an average property value of US$5.4 million. A huge spike in cost due to the rising impact of the UltraVilla sector.
Viewing broader trends in supply and demand, take-up rates for off-plan units remain soft with the possibility of product fatigue setting in.
A lack of new entrants and fresh products, which could induce demand, are presently absent from the mix, C9 reports.
Adding to the situation, investor confidence in hospitality projects is spilling over into the residential market, and the stage seems set for some suspended projects to be restructured and re-enter the supply stream.
Research shows that the geographic source of buyers is pragmatically shifting on the back of changing global currency markets, and the emergence of a growing number of high-net worth individuals.
Both Chinese and Indian buyers are showing signs of potential sales interest in Phuket.
As for a forward outlook, new zoning regulations may become a third party force in driving new UltraVilla developments, with rapid revisions to existing zoning legislation being churned out fast and furious.
A delicate balancing act is being struck between the environmental impact, over-development concerns and foreign investment that will remain a challenge in the near future in this sector.
But lower density luxury villas look to be well-suited for the market conditions ahead.