Phuket Condo (Condominium) Information

Phuket has established itself as a global resort destination, offering a range of luxury villas, condominiums and apartments for sale. Phuket properties are comparable to those offered in the Mediterranean and Caribbean, at a fraction of the price. Widely accepted as the pinnacle of the Asian resort market, the Phuket condo market has expanded since the 1990’s in line with the growth in its tourism. The Phuket condo market is well positioned with the island’s supporting infrastructure including world-class amenities and leisure facilities and an International Airport offering good accessibility. Many investors choose to invest in the Phuket condo market as it offers a combination of western luxury and an exotic tropical lifestyle.

In recognising the long-term potential of the Phuket property market, CB Richard Ellis opened our Phuket office in 2004. Our sales team of Thai and expatriate staff are experts in the Phuket condominium market. The CBRE team has some of the broadest market knowledge in the industry and is able to offer valuable insights for buyers and investors interested in purchasing in Phuket.

Having discovered Phuket as tourists, many then choose to invest in its property market, and buy a second or retirement home, or a property to rent out.  With its outstanding white sandy beaches, unparalleled hospitality, tropical climate, great value for money, beautiful diving sites and some of Asia’s best golf courses, the Phuket property market is well positioned, making it a popular holiday home destination.

The island now has in excess of 3,500 condo owners. For the past ten years, Phuket offers property buyers a lifestyle investment with good potential for capital appreciation. Investors have experienced an average capital appreciation of 20% to 50% per annum for prime beachfront or sea view locations, although some properties have seen the value of their asset rise by as much as 100% between the launch and completion.

Lifestyle/ Leisure/ Infrastructure
Phuket currently has over 150 hotels & resorts along with an extensive sporting and leisure facilities. The island has a total of six golf courses including Blue Canyon Country Club, Laguna Phuket Golf Course and Mission Hills, and four marinas providing a total of 655 marina berths. As the Phuket’s tourism and property market has matured, there is also an expanding choice of upmarket dining and entertainment venues.

The island’s infrastructure is also well developed with an International Airport, 6 major hospitals and 3 international schools. The development of Phuket’s infrastructure and extensive leisure facilities has complemented the growth of the island’s real estate market over the years.

Weather
Phuket has a balmy tropical climate and a fairly consistent temperature all year round (25 to 35 degree Celsius), with its best weather during the European winter. There are two distinct seasons in Phuket- the dry and green season. Phuket’s weather is at its best when the dry season starts in November through to January, while March and April are the hottest months. The green season runs from end-April to November when the rainfall is at its peak. (Phuket overview page)

Access to/from Phuket
Phuket arrivals exceeded 5 million in 2007.  Served by a total of 42 airlines (14 of these are chartered airlines), the Phuket International Airport offers flights to destinations including Hong Kong, Singapore, Kuala Lumpur, Moscow, Seoul and numerous others. (Phuket travel page).

This section outlines some of the findings from the CB Richard Ellis Phuket Property Report, a quarterly subscription report which brings professional analysis and transparency to the growing Phuket villa market.(Phuket Property Report Page) Market Overview: Q1 2010 saw a continued recovery in the Phuket property market. The sales volumes were nothing like 2007 levels but showed to us the enduring appeal of Phuket and reflected the fragile global recovery and the lack of high end stock. Obviously the market demand and buyers profile for resort property has changed in terms of the product that purchasers want and what they are prepared to pay. There will always be demand for high end property in prime ocean front locations, but at a reduced level to 2007 and developers need to factor in more time to sell. At the low end, condos and apartments just inland but with easy access to the beach will always have demand at affordable prices.

Phuket Condo Supply:

The total stock of completed resort standard condominiums was approximate 3,000 units, an increase of 0.3% Q-o-Q and 39% Y-o-Y. Only one condominium project was completed during the quarter.

Phuket Condo Demand:

We estimate that 1,786 units in 28 projects are under construction.  Out of those, 990 units have been sold, a sales rate of 55%.  There are 796 units under construction that are still available for sale.

Phuket Condo Prices:

During Q1 2010, the average asking price of an available condominium unit was approximately THB 16.07 million per unit, with a range from THB 1.86 - 98 million.  In terms of price per sqm, the average price was THB 116,176 per sqm.

Phuket Condo Market Outlook: Phuket continues to hold firm on resort property pricing, driven by limited supply and the general strength of the region. So far it has successfully overcome global, and local problems based on it's fundamental appeal. With improvements in either the global economy or Thai politics someway off Phuket will have to continue to rely on those fundamentals, but on any comparison with other SE Asian resort destinations, Phuket still leads the pack. We believe there are opportunities for new projects and our research consultancy and agency teams are able and active in providing developers and investors with the market information that will help them redesign and focus their projects to sell better and meet 2010/11 market demand. For further information on the Phuket property market, download our latest Phuket Residential MarketView.

Phuket Property Payment Terms
The majority of properties in Phuket are sold off-plan or in a partly built state. Buyers will always be asked to pay a reservation fee. This secures the property which will then be taken off the open market. Then, some time (usually 30 days) is given to allow for legal work to be completed before the first payment is due on signing of the contract. Thereafter payments are usually split according to construction milestones.

Here is an example:

• Signing of agreement: 20% 
• Completion of villa footings or pilings: 20%
• Completion of columns, floor slabs and roof frames: 20%
• Completion of villa shell, including external doors and windows: 20%
• Substantial completion of the villa: 20%

Sinking Fund
In a new villa or condominium project, each owner will pay an initial amount into a sinking fund on transfer of ownership of the property. This will be used for major renovations in future and repairs which are outside the operating budget.

Common Area Management Costs
In a villa or condo development, specifically appointed property managers, such as CB Richard Ellis, will normally be responsible for managing all aspects of the common areas.
This service normally includes:

• 24-hour onsite security
• Maintenance and irrigation of all common area landscaping
• Cleaning and maintenance of all the communal areas
• Management office and staffing as well as ancillary costs, accounting and Insurance.
• Electricity and water supply in the common areas, Refuse collection and Pest control

The property management company reports directly to the owner's committee on management issues and the financial status of the project. (Property management)