What is buying property off-plan?
Off-plan property is a property before a structure has been constructed upon it. If you are interested in buying a house in Thailand you should consider this popular option of investment.
Pre-sales is a fairly common method of investing in real estate development throughout the world. House construction companies are able to more favorable financing for the project, and buyers or investors expect to increase capital upon completion.
Buying house off-plan, how does it work?
Most of developers in Phuket offer pre-construction property for sale. The Buyer reserves either a land plot, or a property, at the initial construction stage and offered larger financial reward.
Advantages of buying houses off-plan
One of the major benefits of buying houses at an initial construction stage is a likely increase its value after construction. For Thailand, this number in most cases is about 5-15%, such capital growth investor can get within 12-18 months when the project is complete.
Another advantage is the payment schedule, when the Buyer makes monthly or bi-monthly instalments to the developer. Payments can be also connected to construction process.
Changing house floor-plan – moving walls, adding extra spaces, rooms, choosing furniture, tile colour etc – yet another advantage when choosing off-plan property. Most of the property developers will offer such option.
Risks of buying off-plan homes in Thailand
Buying a property off-plan carries more risk than buying the completed development.
If property value starts to fall before the building is completed but the buyer is obliged to purchase at a specified price. If the purchase is an investment there is a risk of losing the expected profit in the short run. It is important to note the level of other infrastructure in the area to understand it’s future.
The developer may go out of business prior to construction or completion of the project. The buyer may not be able to return the prepaid funds .In the case of the construction of villas, it is necessary to confirm Buyers right in the Agreement to buy out the land to continue construction with another developer .
Another risk is that after completion, the property does not meet the initial expectations of the Buyer, either due to objective reasons or due to the defects. Usually developer offers construction guarantee and standard Agreement contains conditions to eliminate defects noted by the Buyer.
Expectations from investment in property in Phuket
The real estate market in Phuket is relatively young. However, in the last 5-10 years, the prices of property and land increased by almost 40-50%. Should we expect similar growth in the next 5-10 years?
There are some preconditions for property price growth at the moment:
- сonstruction of new terminals in Phuket International airport. The planned increase in passenger traffic from 8 to 20 millions passengers a year by 2016;
- infrastructure development and new roads development;
- construction of two new a shopping centres from the Mall Group and Central Festival groups;
- development and strengthening of economic ties Commonwealth Asian countries ( ASEAN).
Also the attentions should be paid to the development of certain areas of the island . Attractiveness of some parts of the island due to the possibility of construction, availability and price of land, from the other part some of the areas is too overcrowded and the price of land may be overstated.
Off-plan property for sale in Rawai beach, Phuket
Our new project Rawai Vip Villas started on February 1, 2014. More than 40 villas will be built within 3 years. First Phase of Rawai Vip Villas has 13 villas and 3 plots were sold within 2 months. First show-houses will be complete until November, 2014.
At the initial stage of construction Buyers have more choices of plots and opportunity to make floor-plan changes.
- The largest villa project in Southern Phuket with private park within 300m from beach – selling off-plan houses.