Phuket Villa Information

A “villa” is a common term referring to landed properties, often a one or two-storey structure built on a private ground. Most villas in Phuket are located within a resort or a gated development, with a limited number of standalone villas on the market.

Most quality villa developments in Phuket are offered for sale on a leasehold basis. In accordance to Thai law, foreigners are prohibited to own freehold land, therefore a series of renewable 30 year leases are granted. There are no restrictions on foreigners owning a building outright. In case of Thai buyers, they are able to own the land and structure outright for developments that offer the freehold ownership option.

Phuket villa types can be broadly classified as follows:

1) Prime Location Phuket Villas:
Prime location villas are luxury villas located in beachfront locations with panoramic sea views. Prices of these villas usually start from USD 3 million for a 4-bedroom property. Common features include a private pool, expansive indoor and outdoor living spaces, and high specifications with comprehensive common facilities and professional management. Phuket Beachfront Villas.

2) Luxury Phuket Villas:
Prices of luxury villas in Phuket typically start from USD 1 million and are mostly located in low density developments offering a high level of privacy. Common characteristics of luxury Phuket villas include prime locations, either on hillsides or close proximity to the beach with some offering sea views. These villas offer a high standard of construction and finishing. Most luxury villas feature a private pool, with comprehensive common facilities and professional property management. A selection of our Luxury Phuket Villas.

3) Semi-detached Houses & Townhouses:
There are a number of developments offering semi-detached houses and townhouses in Phuket, notably around the Laguna area. These developments are often located inland, mostly without sea views and in higher density developments with smaller land plots. This type of property offers a good quality of construction with a range of common facilities, usually at prices starting from approximately USD 500,000.

4) Branded Hotel Villas on Phuket:
Phuket has an increasing number of villa developments operated by four and five-star branded hotel operators for example Jumeirah, The Yamu, Banyan Tree and Dusit Laguna.These villa properties command a premium as owners will benefit from the four or five-star management and the opportunity for rental income through the hotel’s managed rental scheme. The price of a branded hotel villa in Phuket starts from approximately USD 750,000 for a four-star brand and from USD 2 million for a five-start branded villa. A selection of our Branded Hotel Villas on Phuket.

There has been a diversification in locations being developed in Phuket. The west coast was the original centre of development where many luxury villas today are located, including Amanpuri. As prime beachfront west coast sites have been taken up, the once overlooked south and east coasts now see an increase in the number of exclusive developments including Jumeirah Phuket Private Island, Cape Yamu and The Yamu. Developments are also extending beyond Phuket into Phang Nga, Krabi and the outlaying islands in the Phang Nga Bay.

The West Coast
The stunning beaches of the west coast from Nai Thon down to Kata Noi are the centre of Phuket's tourism and also offer the lion's share of the hotels and branded resorts. Initial developments were concentrated in Patong up until the opening of Laguna Phuket which shifted development focus to Bangtao and Surin areas, the centre of luxury villa developments in Phuket today.

The East Coast
With a limited number of prime beachfront sites available on the west of Phuket, the east coast, with its stunning views across Phang Nga bay, is now seeing rapid development. The access to Phang Nga bay has also motivated a number of marina property developments, namely the Yacht Haven, Royal Phuket Marina and the Boat Lagoon and a number of luxury villa projects including Jumeirah Phuket Private Island, Cape Yamu and The Yamu.

The South Coast
The distance from the Phuket International Airport and golf courses has resulted in a slower pace of development. The south of Phuket not only has good quality beaches but also has a number of headlands with developments offering quality sea views. The popularity of Cape Panwa and Rawai has increased.

The North Coast
With the shortage of west coast beachfront land, a number of property developers have moved up to the beaches on the north of the island, these offer close proximity to Phuket International Airport.

Inland
The most popular spots for development are those located a few metres from the shore with easy access to the beach and those with golf course views or situated near hubs of activity such as Phuket Town and Cherngtalay. Inland properties are becoming increasingly attractive to budget conscious villa buyers.

Greater Phuket (Phang Nga, Krabi and Outlying Islands)
Phang Nga is an attractive alternative to some of Phuket’s busy beaches. Located to the north of Phuket, Phang Nga offers an unspoilt coastline with proximity to the Phuket International Airport. The market is still largely undeveloped, but a number of developments are commencing. (more on Phuket Villa Locations)

1) Re-sale villas:
Re-sale villas are second-hand properties offered for sale by individuals, as opposed to sales directly from the original developer. These properties can be under construction (off-plan) or completed. To date, Phuket has had a limited market for re-sale villas as most buyers tend to be long-term investors and occupiers of their villas upon completion. However, the market for re-sale villas is a growing and maturing market.

2) Completed villas:
Villas that have completed construction and are available for viewing. This type of villa purchase carries no development risk as the property is already constructed and buyers can also see the exact quality of finishing and design, which is not possible for off-plan purchasers.

3) Off-plan villas:
Off-plan villas are villas sold whilst the projects are under planning or construction. To minimise development risk in purchasing an off-plan villa, it is important to buy from a reputable developer. Most quality developments selling off-plan have show units available for viewing. There is often an appreciation potential for off-plan properties upon completion as off-plan sales are usually offered at a discount.

4) Investment Villas:
There are a number of developments positioned as investment properties with rental guarantee offers. Investment properties have owners’ usage restrictions as the units are part of a compulsory rental programme. The level of guaranteed returns varies from 5% to 8% for a period of 1 to 6 years and an annual owners’ usage of 45 to 60 days, depending on each project.

Most people discover Phuket as tourists, enjoy its outstanding white sandy beaches, unparalleled hospitality, tropical climate, great value for money, beautiful diving sites and some of Asia’s best golf courses. Many then choose to invest in its property market, and buy a second or retirement home, or a property to rent out.

The island now has in excess of 3,000 villa 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 Phuket'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. Furhter info on Phuket Weather.

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. Further detail on Phuket Travel.

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 Villa research)

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 Villa Supply:
The total supply of completed villa projects was approximate 3,600 units at the end of the first quarter, an increase of 0.86% Q-o-Q and 5.88% Y-o-Y. Two villa projects were completed.

Phuket Villa Demand:
As expected, completed units have the highest sales performance, with 77% sold.

Luxury Phuket Villa Price:
The average asking prices for luxury projects were highest on the East Coast (North). The average asking price of luxury villas being marketed was THB 139.3 million.

Phuket Villa 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. Phuket Property Management.