The sales performance of the overall villa market declined due to a slump in the entrylevel villa market. However, the sales volume of the other sectors remained relatively stable.

Entry-level villas priced between THB 5-15 million are the most dependent on Russian buyers. This sector will remain weak if the Russian economy and the ruble do not make a recovery. However, we have seen evidence of some Chinese buyers entering this sector. It is possible that they may start buying in bulk once they have confidence in the market.

Two luxury villas (over THB 90 million) were sold in Q1 2015. Both luxury villas were in Banyan Tree Grand Residences, with a starting price of THB 101 million.

Above:Banyan Tree Grand Residences

Above:Banyan Tree Grand Residences

We believe that the villa market will remain sluggish in the near future. We do not expect that Chinese buyers will be able to immediately replace the decline in Russian buyers in the coming quarters.

Phuket resort condominium and apartment unit sales fell compared to last year. Forty percent of the units sold were one-bedroom units followed by studio units at thirty five percent.

There was a 53.9% drop Y-o-Y in Russian arrivals to Thailand and this has hit the condominium and apartment sales.

The total completed supply of resort condominiums amounted to around 5,200 units and there were over 3,000 units in the pipeline, which are expected to be completed within 2017.

We saw the first real evidence of Chinese (PRC) buyers starting to buy resort property condominium units. This number is significant in certain projects. A small number of Thai investors also purchased units with rental schemes.

Western expatriate buyers are more cautious in their investment and prefer the resale market. There have been resales in existing developments; however, prices are not publicly available.

As the resort condominium competition has remained fierce, especially in the entry-level, the rental scheme has become an important marketing tool for developers.

Above：The resort condominium competition has remained fierce

The increase in the number of condominium units in rental schemes will mean that condominiums will be competing with hotels for daily rate guests and the rental returns will depend on the overall performance of the Phuket hotel market.

Going forward, we expect slow sales and limited project launches. Unit sizes will be smaller and have lower lump sum prices.

Source: CBRE Thailand