Real estate can be found in a wide price range, from the more affordable to the more lavish. While it is true that, on the one hand, a good location is not usually synonymous with luxury property, on the other hand, luxury property is very nearly always synonymous with a good place; this is not the case at the high top-end of the property market.
Recently, Phuket has made significant steps toward becoming a top-tier real estate market. The island’s prosperity is no longer tied to the fortunes of a single market, like its historic tourism bases in Hong Kong and Japan. This infusion of ‘new wealth’ and the city’s growing diversity has helped propel Phuket to the forefront of Thailand’s luxury real estate market, with many new projects priced at $10 million or more.
Not only has globalization contributed to Phuket’s luxury real estate boom, but the adage that “location, location, location” holds more accuracy than ever. Phuket benefits from its natural surroundings, including the Andaman Sea’s temperate waters, pleasant climate, beautiful coastline, excellent sailing conditions, and proximity to some of Asia’s and the world’s most famous dive sites. Unsurprisingly, a thriving market for high-end real estate would emerge in a place with so many attractive natural features.
Luxury real estate development, however, necessitates a deeper investigation into the site’s unique characteristics. Phuket might be compared to an uncut gem, with certain facets polished but others still rough around the edges. Not every part of Phuket qualifies as a “luxury location” for real estate.
Almost every builder and real estate broker will say that their house is in a great location, regardless of where it is. This emotion, however, should not be taken at face value all the time. A thorough neighborhood investigation is required to answer the question, “Does this area have the dynamics required to support a luxury lifestyle?”
Several builders have tried to sell high-end items in low- and medium-priced neighborhoods to maximize profits. This is done so that they may take advantage of cheaper land.
This has repeatedly failed because your product can’t just be thrown into a store and expected to succeed. It is unlikely that you will have much success if you try to create a high-end product in a low-end market and vice versa for a mass-market (or mid-price range) project in a high-end market.
That doesn’t mean real estate projects can’t be successful in less affluent areas. Many wildly successful initiatives exist in Phuket’s underdeveloped districts, like Nai Harn and Chalong. However, other concerns, such as price and value for money, take center stage when considering options in these areas.
As a developer of luxury resort-style condos, I have no problem shelling out top dollar for prime real estate in an attractive area. Securing a desirable spot to build is my top priority. Condos are no longer exclusively affordable alternatives to villas; a small but growing number of high-end complexes have carved out a new premium niche in the market. Due to the historically high prices of luxury villas, any high-end condo project must be situated in a truly high-end area.
Having opted to target the high-end market with my product, I set out to learn more about my target demographic and the amenities they would find most appealing on a potential development site. The first thing I do is scope out the neighborhood to see whether it fits my criteria for a luxury location (is it close to the beach, has a view of the ocean, and has the necessary infrastructure already in place), including high-end accommodations, restaurants, stores, and transportation options.
All of these conditions seem to me to be necessary. If the location is incorrect, investing in a high-quality product is pointless. Nothing, and I mean nothing, change a premium property’s site. You can’t compensate for a wrong location with a fancier clubhouse and larger pool. Sea views, proximity to the beach, and proximity to services are essential for a high-end luxury condo.
Unless the surrounding area is upscale, I will have a hard time selling the property as a luxury to potential buyers. Customers of luxury condos anticipate paying a premium price for the associated high level of service, amenities, and location. For this reason, the western shore has several desirable neighborhoods, including Surin and Bangtao. They offer easy access to the beach, beautiful views of the water, and a well-established system of high-end amenities.
Making a high-end neighborhood from scratch is impossible. There needs to be at least a skeleton in place. This occurs over time due to numerous external factors over which a single creator has little control.
For this reason, spotting the next ‘up and coming region’ is a popular pastime for everyone from real estate developers to prospective homebuyers. Even if based on an accurate prediction, speculation always carries the danger of significant financial gain or loss. Your preferred location might be considered “up and coming” for the next two decades. In general, looking for properties in well-established neighborhoods is best if you want to invest in luxury without taking any unnecessary risks.