Phuket News / Daily Updates from Paradise

Phuket’s strong tourism markets support the fast-growing real estate market. Although Phuket is a relatively small island, some real estate in Phuket could cost millions of baht. For those wishing to make Phuket a holiday home as well as an investment, there are many areas to be chosen according to their lifestyles.
Much of the high-end development for the international market over the last 20 years has been along Phuket’s western coastline, particularly between Bang Tao and Patong, and near to the island’s most popular tourist beaches and resorts. However, with land prices along this stretch now very high, developers have begun to look at other areas of the island. Phuket is a relatively small island, and for many property professionals on Phuket, a leasehold agreement has become the main alternative to the now heavily regulated company freehold purchases.

The number of residential units for sale in Phuket reached a peak in 2006, with 1,473 units for sale. The trend dropped in 2007, with 44 percent decrease over 2007, due to the political instability in Thailand.

The luxurious and high-end property will be focused in the Western Area concentrating at Bangtao Beach. The high-end trend in this area began with Trisara, an exclusive villa resort and spa that quickly became a Phuket landmark when it opened in 2004. The future trend of Phuket’s larger-scale residential projects tend to focus in the Eastern Area, since the western area is now concentrated with many projects.

The trend of residential projects in Phuket is for projects that are integrated with hotels and managed by the same hotel group that manages the hotel. The hotel group also manages the letting of the property, or part thereof, on behalf of the owners, more generally through a rental pool system. They market it on their behalf and split the income between themselves and the owners. Our research shows that the split ranges between 20 percent for the hotel and 80 percent for the owner, to 50 percent for the hotel and 50 percent for the owner.

The trend is towards more people letting out their property in their absence, either with a view to generate income, or for the property to be used and looked after. Phuket’s holiday lettings market is still in its infancy and is set to develop. Rental income can be between 6-10 percent per year.

At first glance, the location of residential projects in Phuket appears to be haphazard; however, after a more thorough analysis, the luxurious residential projects can be divided into five areas or pockets of concentration.

The Northern Area stretches along the Andaman beaches, starting from Mai Khao Beach, passing Nai Yang Beach and Nai Thon Beach to the end, as well as the area starting from Sarasin Bridge to the north. This is the new area, which has only a few luxurious properties located in Phang Nga. The northern area is located just north of the airport and lies to about 15km south of the airport. There is no tourist development here except for the J.W. Marriott Resort and Spa. Phang Nga is now established as an extension of Phuket as a result of its proximity to Phuket International Airport.

The Western Area has been divided into three parts, which are Zone 1, Zone 2 and Zone 3. Zone 1 starts from Layan Beach and goes down to Bang Tao Beach, Surin Beach, Laem Sing Beach and Kamala Beach.

The Bang Tao area was first developed with the Laguna project. In the time following the inception of Laguna, several high-end projects came on the market, followed recently by more middle market developments and low-end condominiums. The Laguna area remains a popular part of the island due to its close proximity to the airport as well as the range of facilities in the area.

The Layan area is very active with projects across a wide range of prices.

The Kamala headland is considered as the “millionaire’s mile”. It has established itself as a prime location for luxury residential developments. Most projects sell here in excess of 30 million baht. There are many projects under construction but sold out already, e.g. Andara Phase I and Phase II. The current marketed projects are Kamalaburi and Andara Phase III, etc.

The branded resort residential in this area is Banyan Tree Villa. The concept of Banyan Tree Residences is to allow investors to buy their own signature villa, town house or apartment, which becomes part of the inventory of these exclusive resorts and receives an annual guaranteed return of 6 percent for six years, with options to renew or share in revenues generated by the property. Owners are entitled to 60 days complimentary use of their residence every year.

Zone 2 is the area along Kalim Beach down to Patong Beach at the end. This area is considered a nightlife area; however, there are some locations in this area that are considered tranquil areas, such as where the Bluepoint development is situated. Kalim Bay is located just to the north of Patong. This area is much quieter than Patong, although the beach is not as good for swimming as there are a few rocks and a coral reef. The reef is exposed at low tide and locals can be seen collecting crabs and shrimp. Kalim is a good alternative if you want to be near the bars and restaurants of Patong, but still want peace and quiet.

Zone 3 is the area from Karon Beach to the end of Kata Noi Beach. Karon is the area that is considered a beachfront residential project. Recently, M?venpick sold 70 percent in a short period. The selling price starts from 14 million baht for a 30-year leasehold. The project has completed, and the resort residential development caters to a lifestyle for the rich and famous. Kata is another attractive area for foreigners. Currently, Raimon Land Group has launched two successful projects, Kata Gardens and the recently marketed project called The Heights Phuket.

The branded resort residential in this area is Mövenpick. The project is owned by the Kingdom Hotel Investments (KHI) company, which focuses on developing an exclusive portfolio of hotels and resorts. Owning a private residence at Mövenpick serves as the signature level of accommodation at the Mövenpick resort. The owner has the option of participating in Mövenpick’s rental program; this means that when you are not in residence they will lend their considerable marketing to the rental of your home.

The Southern Area encompasses Nai Harn Beach, Rawai Beach, Friendship Beach and Chalong Bay to the southern part of the east coast. Nai Harn is one of the island’s most beautiful locations and most popular places with in-the-know locals. Nai Harn is a quiet little spot at the southern end of Phuket. Chalong’s muddy east coast shoreline makes it rather unsuitable for swimming, but it is an ideal and natural spot for yacht mooring. As well as the Boat Lagoon, Yacht Haven and Royal Phuket Marina, Chalong is a center for intense boating activity. Early mornings and late afternoons are the busiest times at Chalong, when diving and day trip groups are bundled on and off boats. The Ao Chalong Yacht Club, which organizes regular sailing races, makes its base here, and its bar is a favorite spot for sailors to swap yarns and party.

The Eastern Area along the east coast looks to be the future destination of high-end developments in Phuket, since there are already three marinas there. The future development of another two marinas will have a total of 800 yacht berths. It is worth remembering that marinas benefit the island’s real estate industry because residential projects generally crop up around them. The area is gaining in popularity since the east?ern side of the island is set to become a marina haven, as boats can make use of the year-round harbor and waters. Such a facility might be necessary for Phuket’s tourism industry to stay ahead because one of its regional rivals, the Malaysian island of Langkawi, may develop facilities for mega-yachts. The land price on this side is relatively cheaper than on the west?ern side of the island. The projects developed in this area are The Yamu, Aquaminium and Tawan View, etc.

There are many residential projects developed on small islands near Phuket Island, for example, Jumeirah, which is developed on Raet Island on the eastern coast of the island, and the Village on Maphrao Island. However, there will be a new development of residential projects on Lone Island on the eastern coast of the island.

Article by Phuket Post – phuketpost.com