Phuket ultra-luxury market wobbly
THE very top tier of Phuket’s property market seems to be more stressed these days with one likely reason being that more super-rich buyers are heading for urban areas, Bill Barnett, managing director of C9 Hotelworks said on Saturday.
Certain ultra-luxury villa transactions show that there has been discounting and undoubtedly there is a lot of room for negotiations. On the other hand the secondary market of this very posh and niche segment is not large as most of the owners are high-net-worth individuals.
“This is a different market compared to small investors who buy apartments to rent out.”
While sales of these super-posh villas seem to be a little more difficult these days, Mr Barnett mentioned that the rental market remains strong although having shifted.
“We saw this past high season, which is typically October through to March, that there was more demand coming from Singapore, Hong Kong and mainland China.
“These markets are starting to be primary renters of big villas which traditionally have been more of a European and UK market.
“The long-haul market would rent the big ultra-luxury villas but now we are seeing more Asians taking up that proposition.”
However C9 Hotelworks’ recent research on Khao Lak, which is adjacent Phang Nga province’s key resort area, shows that Europeans and Australians typically stay between seven to 14 days while Asian guests between one to three days.
“They are staying shorter terms but they are taking these four- to five-bedroom luxury villas, they find value versus renting three to four hotel rooms in luxury resorts.
“This is being driven by Airbnb (room letting website) and things like that.”
Even so many owners of these super-posh villas are only seeking rental returns to cover their operating costs and not looking in terms of obtaining rental yields.
Mr Barnett has noticed that more buyers are now drifting to urban areas and are attracted to super-luxury projects in Bangkok such as The Residences at Mandarin Oriental, Four Seasons Private Residences and Sansiri’s 98 Wireless.
“We are seeing more action in urban luxury estate than we are seeing in leisure real estate.”
However Phuket ultra-luxury market, where just one posh villa could cost around 200 to 300 million baht, will likely strengthen once new products enter the arena and add a bit of excitement. Two strongly anticipated developments include Rosewood Phuket and Park Hyatt on the island’s east coast at Koh Siray.
By Nanthida Kumari
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