Every villa buyer faces a version of the same question: purchase off-plan during construction and lock in a lower price, or buy completed and start earning rental income immediately?
The answer is not obvious. Off-plan purchases deliver built-in equity through discounts. Completed purchases deliver immediate cash flow. The right choice depends on how much capital you have, how long you plan to hold, and whether you need income now or later.
SKHAI, a developer active across Phuket, Koh Samui and Bali, has published pricing data and return projections that make the trade-off clearer. The figures are developer-sourced, but they illustrate the core dynamics that apply across most villa markets in Thailand and the wider region.
The off-plan discount: what the numbers actually show
Off-plan villas are priced lower than completed equivalents because developers use buyer capital to fund construction. In exchange for waiting and accepting construction risk, buyers receive a discount.
According to SKHAI’s data, discounts vary by stage:
- Pre-launch or founders phase: 25-30% below completed market price
- Launch phase: 20-25% discount
- Mid-construction (around 50% complete): 10-15% discount
- Near completion (90%+): 5-10% discount
- Completed and ready to rent: full market price, no discount
In plain English: a three-bedroom pool villa in Phuket priced at $380,000 when completed might be available for $285,000-$304,000 if purchased at launch. That is $76,000-$95,000 in built-in equity the moment construction finishes.
The buyer does not pay for that equity with cash. The buyer pays for it with time and risk.
Two investors, same budget, different outcomes
SKHAI modelled two investors, each with $300,000 to deploy in Phuket villa investment.
Investor A buys off-plan at launch:
- Purchase price: $285,000
- Deposit at signing (30%): $85,500
- Construction milestone payments over 18 months: $142,500
- Final payment at completion: $57,000
- Market value at completion: $365,000-$380,000
- Built-in equity on day one: $80,000-$95,000 (28-33%)
- Year 1 rental income after completion (7.8% yield): $28,470
- Total three-year return (equity plus rental): $137,000-$152,000 (48-53% ROI)
Investor B buys completed:
- Purchase price: $380,000
- Full payment required: $380,000
- Market value at purchase: $380,000
- Built-in equity: $0
- Three years of rental income (7.8% annual yield): $88,920
- Capital appreciation (6% annual over three years): $72,000
- Total three-year return: $160,920 (42% ROI)
The completed buyer needs $380,000 in capital, not $300,000. For a true comparison at the $300,000 budget level, Investor B would need to buy a smaller villa or accept a less premium location.
The off-plan buyer achieves a higher ROI percentage because of the built-in equity discount. The completed buyer generates more absolute rental income because the villa earns from day one.
The key variable is the construction period. The off-plan buyer earns nothing during the 12-24 months of construction. That income delay is the cost of the discount.
Why this matters for Phuket property buyers
Phuket’s villa market moves in cycles driven by tourism recovery, infrastructure projects such as new road connections and airport expansions, and foreign buyer confidence tied to visa policy and ownership clarity.
Off-plan purchases work best when the market is stable or rising. If demand softens during construction, the built-in equity advantage may narrow or disappear. Completed purchases work best when rental demand is strong and buyers need income immediately, or when construction risk feels too uncertain.
The SKHAI data also highlights payment plan advantages. Off-plan buyers spread payments across construction milestones rather than paying 100% upfront. With a $285,000 purchase, the buyer might deploy only $42,750-$85,500 in the first 30 days, with the remainder spread over 12-24 months. The remaining capital can be held in reserve, earn interest, or be deployed elsewhere.
Completed buyers lock in 100% of capital immediately with no flexibility.
What the data does not tell you
The SKHAI projections assume construction finishes on time, rental yields hold steady at 7.8%, and capital appreciation follows a 6% annual trend. None of these assumptions are guaranteed.
Construction delays are common across Southeast Asia. A delay of six months wipes out six months of potential rental income and delays the point at which the off-plan buyer begins earning.
Rental yields in Phuket vary by location, villa quality, management efficiency and seasonal demand. A 7.8% yield is realistic for well-located, professionally managed villas in high-demand areas, but not universal.
Capital appreciation depends on sustained buyer interest. If economic conditions weaken, visa rules tighten, or competing supply floods the market, appreciation may slow or stall.
The report does not address developer risk. Off-plan buyers depend on the developer to complete the project. If the developer faces financial trouble, construction may stop. Completed buyers face no construction risk because the villa already exists.
The detail buyers should watch
SKHAI’s data includes a milestone payment structure that is typical for off-plan villa purchases across Thailand:
- Reservation or deposit: 10-15% at signing
- Contract signing: 15-20% within 30 days
- Foundation complete: 15-20% at 3-4 months
- Structure complete: 15-20% at 6-9 months
- Fit-out complete: 10-15% at 12-15 months
- Handover and completion: 10-20% at 15-24 months
This structure protects buyers to some extent because payments are tied to construction progress. The buyer does not hand over all capital before seeing proof that work is advancing.
But it also means the buyer must monitor construction and confirm each milestone before releasing funds. That requires either regular site visits or a trusted representative in Thailand.
The report also notes that developers raise prices as construction progresses. A villa purchased at pre-launch in Phase 1 will cost less than the same villa type sold in Phase 3 when construction is 60% complete. By the time the project finishes, the last units sold are typically 20-30% higher than Phase 1 prices.
This progressive pricing creates natural capital gains for early buyers, assuming the developer’s pricing strategy reflects genuine demand rather than optimistic forecasting.
Frequently Asked Questions
What is the typical discount for off-plan villas in Phuket?
According to SKHAI data, off-plan discounts range from 25-30% at pre-launch to 5-10% near completion. A villa priced at $380,000 when completed might sell for $285,000-$304,000 at launch, delivering $76,000-$95,000 in built-in equity.
How long does off-plan villa construction typically take in Phuket?
SKHAI’s projections assume an 18-month construction period. Actual timelines vary by project size, weather, material availability and developer efficiency. Delays of 3-6 months are not uncommon in Southeast Asian villa developments.
Do off-plan buyers really achieve higher returns than completed buyers?
Off-plan buyers achieve higher ROI percentages because of the launch discount, but they earn no rental income during construction. Completed buyers generate income immediately but pay full market price. Over longer hold periods, the difference narrows as rental income accumulates for both.
What is the main risk of buying off-plan?
The main risk is developer failure or construction delay. If the developer faces financial trouble, construction may stop. If construction is delayed, the buyer loses months of potential rental income and may face higher holding costs. Completed purchases eliminate construction risk entirely.
How do payment plans work for off-plan villa purchases?
Off-plan buyers spread payments across construction milestones rather than paying 100% upfront. SKHAI data shows typical payment structures with 10-15% at signing, followed by milestone-based payments tied to foundation, structure and fit-out completion. This spreads capital deployment over 12-24 months.
Sources
- SKHAI — Off-Plan vs Completed Villa: Which Delivers Better ROI? (With Real Numbers) — link
