the vast majority of purchases are cash based, so access to credit or debt servicing are not issues among this group.
Furthermore, current and upcoming supply in the luxury segment is limited and few undeveloped prime ocean front sites remain; factors which will continue to stimulate demand among potential purchasers.
As such, our medium-term outlook on the Phuket market remains positive.
In recent months, Thailand has been buffeted by the combination of global financial turmoil and local
political upheaval, both of which have shaken confidence in the Phuket property market. No market has
immunity from such events and it is likely that we will see some short-term effects in terms of on-going
development progress and new launches, as well as a slowdown in sales pace.
Phuket is a premier destination in its own right and, perhaps arguably, constitutes a distinct residential
market in the Thai context as well. During the recent closure of the two Bangkok airports, Phuket remained
open for business and was useful to some as an alternative air transport hub. This shows the growing
significance of the island and reflects a certain measure of separation from issues faced in other parts of the
country.
Given the diminishing supply of west coast land with sea views in southern and central parts of the island,
there are new areas to watch in the luxury villa segment. These include the following:
East Coast: Developers seeking out new areas with sea views have moved into locations along Phuket’s east
coast. With high-profile projects including Jumeirah Private Island, Taj Exotica and The Yamu, the east
coast with its unique views of Phang Nga Bay is a developing story in the Phuket property market.
Mai Khao: As beachfront land has become scarce elsewhere on Phuket, Mai Khao has become an attractive
location for developers. The Anantara Phuket recently opened on Mai Khao beach, joining the established
JW Marriott and Sala properties. This area is poised to be a significant destination, with increasing critical
mass to the hotel pipeline including properties from Holiday Inn, Outrigger and Renaissance.
Greater Phuket: The lack of beachfront real estate on Phuket itself – as well as the availability of larger land
parcels for high-end resort development and large mixed-use projects along Natai Beach in Thai Muang and
even closer to Phuket in Takua Thung’s tambon Khok Kloi – has resulted in a trend towards high-end
development and premium hotels in southern Phang Nga.
Examples of this include Aleenta and Sava Natai, while the announcement of the Raffles villa project has
cemented this area as one to watch.
In next week’s column we will look at some of the socio-economic and political trends influencing supply
and demand in the market for luxury villas.
