Pent-up Demand to Drive Phuket Villa Market in 2021
Though property market remains sluggish as the third wave of COVID-19 hit Thailand, CBRE, a leading international property consultant, has witnessed an active real estate market as enquiries for buying luxury villas have been increasing since Q4 2020 with demand coming from both local and international purchasers as the villa supply remains limited due to developer’s delays in new launches and shortage of suitable development sites. The Thai government’s recent approval of the Phuket Sandbox programme starting in July may yet to play a significant role in Phuket’s recovery by the end of 2021.
Ms. Prakaipeth Meechoosarn, Head of Advisory & Transaction Services - Resort Property Sales at CBRE Phuket, mentioned, “The surge of luxury villa demand is visible from two main sources; firstly, well-heeled regional buyers such as Singapore, Hong Kong and Mainland China who are seeking a second home or a retirement home in the post-pandemic tropical location and are already familiar with Phuket’s natural attraction and landscape. The second group are the local buyers, both Thais and expatriates, who are looking for a luxury resort home with the purposes of own stay and investment. The unexpected turn of the Phuket market into a buyer’s market phase has prompted these high-net-worth individuals (HNWIs) to look for a worthwhile long-term investment in a property sector that was predominated by foreign investors for many decades.”
According to CBRE Research, due to curfews and other restrictions in the first half of 2020, the completion of some under-construction projects has been affected with only five villas completed in H2 2020 adding to the total existing supply in all grades of nearly 4,300 villas in Phuket. In the luxury segment which prices are above THB 90 million per villa, the total supply as of Q4 2020 stood at 320 villas with only 7 new luxury villas expected to be completed in 2021 and no future supply expected in 2022. Given this information, it is clear that the luxury villa supply will be very limited in the coming years and suitable land plots for top-end villa development in Phuket is becoming rarity.
“Phuket remains one of Thailand’s top destinations for tourism and for anyone looking for holiday homes as Thailand’s villa market can offer everything to suit everyone’s lifestyle depending on their budget and location requirements. CBRE believes if the number of inbound tourists return with help of the Thai government’s approval of international vaccinated tourists to visit Phuket without quarantine coupled with a successful vaccine roll-out and a consistent dedication to keep the third COVID-19 wave under control, the revival of Phuket’s luxury villa sale market should be expected by the end of this year. This is a good window of opportunity for buyers seeking second homes or income-producing properties. The supply in the market is currently stocked with the best choices, flexible price and a variety of product options which may not be available when the market situation returns to normal.” Ms. Prakaipeth concluded.