Transactions In Phuket's Luxury Villa Market Tops 3.5 Billion Baht

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From the Phuket Gazette 31 August 2009:

"PHUKET: Transactions in Phuket’s luxury villa market topped 3.5 billion baht in the first half of 2009, according to figures just released by Phuket-based consulting firm c9 Hotelworks.

The report, ‘Luxury Villa Market Update Mid-year Edition’, defines luxury villas in Phuket as those with price tags of 65 million baht (approx US$ 1.9 million) and above, and puts the value of the island’s current inventory of such villas at 10 billion baht – with 19 of the top-end properties having been sold between January and June, and 92 units currently for sale.

According to the report, resales of luxury villas are becoming a significant segment, with over 1 billion baht in transactions by mid year. High-end products are outperforming the broader market, despite recovery prospects for the overall property market having been set back to 2011.

The full report, including an analysis of current supply and demand, can be viewed here. " end of quote

I am somewhat at a loss to determine whether this is good news or bad news, whether for buyers or for developers. I have tried to access the link for the complete report, but the site "www.c9hotelworks.com" does not respond. I believe this site is operated by Bill Barnett who also operates "www.phuketinsider.com". The latter site responds readily but it does not contain a copy of this report.

The Gazette article features a photo of a villa in the Andara Development at the beginning of the famous "Millionaires Mile". It has been proven that at least two luxury developments on the "Millionaires Mile" have partly been constructed above the legal 80 m limit. So any buyer of a "luxury" villa in this area would be well advised to employ his own surveyor to make sure that what he is buying or leasing is legal. Better be safe than sorry.

Coming back to the Gazette article, not knowing what luxury villa sales were during the last year, one cannot tell whether sales of "luxury villas" have been increasing or diminishing. Supposing sales remain constant, and allowing for the number of re-sales, means that it would take 2 years to dispose of the remaining 92 units. In contrast to this is a report published by the Gazette in May this year where the Land Office reported a drop in revenues from land and property sales by a massive amount of 70% for the first 4 months of this year as opposed to the same period the year before. Sellers would hope that this would not be reflected in the "top-end" market and buyers, of course would hope the opposite, that it does.

So, is it a good year to lease (or buy through your spouse or limited company) or not ? But whatever you do. do not forget to check for the 80 m ! Being a part of a well advertised property is not a guarantee that all of it was constructed legally. A number of leasers/buyers in Phuket had to find out the hard way.