Phuket's luxury villa market holding despite global conditions

The upscale luxury villa segment has outperformed the broader Phuket property market for Q4 2008 in spite of the worsening global financial downturn and recent political issues in Bangkok, according to the Phuket Luxury Villa Market Report.

Key fundamentals at play in the market are the absence of purchaser debt which has stabilised capital values, a slowdown in new product launches that will build marketplace traction while the availability of premium land continues to shrink, thus creating substantial barriers to entry. One emerging benefit of the crisis is the sharp reduction in construction costs in the region by 20-30%, although this is being offset by limited availability of developer debt in the Thai financial markets.

According to the Market Report, a total of 304 properties priced from 65 million baht (USD 2 million) and above, and located within estate developments, were for sale at the close of 2008 with projected increases to see this number rise to 367 moving into 2009 and beyond.

"Given the limited market size, re-sales of existing units will become more predominant as buyers shy away from taking development risk on off-plan purchases," A spokesperson said.

Geographical diversification is another key trend. Limited prime oceanfront land within the traditional West Coast areas is pushing development into southern Phang Nga province (just over the Sarasin bridge), Phang Nga Bay, and into the East Coast of Phuket Island. Hotel developments in these areas are rapidly influencing buyer sentiment on the back of international brands such as Jumeirah, Taj and the design team of Philippe Starck/Jean Michel Gathy's luxury development 'The Yamu'.

Based on overall pricing parity comparisons, the spokesperson said the resort island's East Coast has now edged ahead with an average of 128.2 million baht, versus the West Coast at 127.1 million baht, for units currently on sale.

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New International School

Thalang: Phuket International Academy is well under construction for its opening in early September 2008 The school is expected to open on the 8th September with its first students ranging from nursery through to Grade 4..
The school once complete will also feature primary, junior and senior high. All constrcution is scheduled to be completed by September 2009

The school is located on 125 Rai, and will have more than 700 students in attendance.

Recent Changes to Thai Law:

Changes are to be made to the number of shareholders in a Thai Company, this will be reduced to from 7 to 3, this is effective from 1st July 2008, section 1237 of the Civil and Commercial Code (No. 18) BE 2551 (A.D. 2008. This change will be of great benefit to foreign investors who now must find only two genuine Thai co-investors with whom to set up a company.