Luxury's Got a Sweet Spot

Posted: 26 Mar 2011 | 6:00 am

Most Phuket property developers these days have swapped their heart-stopping guzzling of Red Bull for chakra-inspired slow sipping of green tea.

Mystical chants aimed at revealing the elusive "sweet spot" in the luxury property market continue to leave even die-hard devotees gasping at thin air, like a down-on-his-luck big game fisherman.

Indeed, it's often the tale of the one that got away.

Landing the big one remains nothing more than wishful thinking for many developers. Yet thrust into the harsh daylight, the face of raging bulls last year accounted for 2.84 billion baht trading volume in top-end ultra villas in Phuket.

Despite uncertainties arising from political upheaval, a strong luxury market in Phuket still drew strategic investors interested in the long-term prospects of real estate on the island.

As a slave to the bean - the coffee bean, that is - I am in no state to continue writing this with-out a calming influence. I need the inside numbers.

Just in the nick of time my new-age analyst arrives fresh from a yoga session. Crunching the numbers, it's hard to not make comparisons with 2009, when Phuket's real estate market hit rock bottom with a thud that resembled a meteorite crashing into a Toyota Vios.

Last year things started picking up again, though this time resales grew to account for 68 per cent of trading volume.

As despicable and misunderstood as any split personality, the dreaded word "luxury" in our office is defined as villa properties priced at 65 million baht and above.

While I often pine over a lovely lost pet gecko named "Mike", many property brokers continue to cry into their beers waiting for the return of the euro and pound buyers. To me, purgatory can wait.

The number guru lights up, seeing that - just as in tourism - Phuket's' property market is experiencing a change of characters; something akin to a recast of Charlie Sheen's role in Two and a Half Man. I have to say, though, Charlie would like Phuket if he'd give it half a chance.

Three top new geographical source markets for upscale property are Russia, China and India. A direct correlation between high growth tourism and property markets appears evident. Strange bedfellows? Yes, but trends are trends.

Our office mate continues to spew out more facts and figures. Oceanview, oceanfront and high-profile developers are now dominating the score card. Hotel-managed projects and those on Phuket's west coast remain the top achievers.

While the existing stock of new units in the sector numbers only 72, supply and demand figures predict that the luxury property segment in Phuket will remain healthy.

I may prefer nurses to doctors, but the check-up results produced by the guru has calmed my nerves, at least for the moment.

What's in store in 2011? We are already nearly a quarter into the year and halftime is not yet in sight. Players are currently hitting the Gatorade and sweating like amped-up madmen.

At least two high-profile estate developers - one on the east coast, another on the west - look set to introduce new projects this year.

Phang Nga remains plagued by the new zoning regulations kick to the head last year, and most ink is being spilled over domestic low-end condos in the burgeoning metropolis of Patong.

One thing is for sure, though: The air is thin at the top of the mountain, and that's the way buyers like it.

Expect the walls of property offices to be making room for some trophy fish this year.

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