_Recap of Phuket Villa Market in 2021 and Outlook for 2022

Mr. Nattha Kahapana, Managing Director, Knight Frank Thailand, said that as a resort destination for tourists from all over the world, Phuket’s real estate market has grown alongside tourism in Thailand’s distinctive islands, and vacation homes or villas have become important destinations for tourists in their respective holiday seasons. In addition, villas can also be rewarding assets for buyers, generating rental income when owners are not in residence themselves. A popular location for villas is the west coast of Phuket, which is close to the beach with stunning sea views. It also offers a wide range of amenities in the vicinity. As such, villas in this area are quite expensive and can be traded at a good price. On the other hand, land plots for villa developments on the west coast are relatively scarce and difficult to develop due to construction restrictions and laws. There are not many left projects left in the market, including projects that have already been developed. As a result, villa prices on the west coast are steadily rising year after year. Despite the unfavourable economic situation as of late, the villa market still attracted some buyers throughout 2021.

Supply

At the end of 2021, the total supply of villas in Phuket included 4,002 units. The number of new units decreased by 35 percent from 2020, with 165 units sold in total. In 2021, the new supply included 108 newly launched units from eight projects; most of the new villas for sale are located in the Cherng Talay area at up to 61 percent of the total, followed by Bang Tao Beach and Nai Yang Beach, which each accounted for 15 percent, and Layan Beach, with 11 percent. The new villas launched for sale in 2021 were priced from 10 to 50 million baht each

Demand

From research conducted by Knight Frank Thailand, it was found that there were 3,233 villas sold in Phuket out of a total supply of 4,002 units, representing a sales rate of 80.8 percent. The sales rate increased by 2.3 percent from the previous year.In 2020, the sales rate was 78.5 percent. The increase in the sales rate reflects the small number of villas, only 108 units, launched in Phuket in 2021. As for 2021, there were a total of 177 new units sold. The number of new units sold has declined steadily from 2020 due to the ongoing Covid-19 epidemic over the past two years. The tourism sector is in the process of recovery, but the arrival of foreigners is still not enough to stabilize the economy. As a result, the number of villa units in Phuket has decreased. At any rate, the number of new units sold reflects the demand of affluent Thai buyers, which make up about 80 percent of the total number of units sold this year. The remaining 20 percent are foreign buyers based in Europe and Russia. The majority of the Thai buyers live in Bangkok and decided to buy villas in Phuket as a “safe zone”, should severe and difficult-to-control epidemic flare-ups occur in the future. This has enabled many projects to close their sales both online and via in-person visits, even with a slight increase in their asking prices.

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