Connect with us

Property

By the book: Not all doom and gloom on Phuket

Legacy Phuket Gazette

Published 

 on 

PHUKET: People who spend time on Phuket or reside here will surely have heard expats grumbling about the island’s property market.

Of course there are some nagging issues: there is a lack of easily accessible information for buyers, similarly and most certainly a lack of regulation and there is no Multiple Listing Service [MLS].

However, while the market here is a little soft with the resale/secondary side yet to get into full swing, we believe it is not all doom and gloom because it does have a bright future ahead with many strengths already in place and many more opportunities on the horizon.

Moreover, property prices in Phuket have been very stable mainly because nearly all foreigners are cash buyers as it is impossible for them to get a mortgage in this country. This greatly reduces the amount of debt in the market.

A large segment of foreign-owned property is made up of retirees and these buyers will not slash prices to sell because the property is part of their retirement plan so they will instead wait for the market to recover. The upshot of this is more stable pricing than in other property markets.

The build quality and standard of materials used has improved considerably over the past decade and now Thailand is producing quality properties to international standards. There is a huge amount of choice on offer to buyers in Phuket covering different types of property, locations and price ranges.

Compared internationally, Thailand’s property transaction taxes are relatively low and there are no municipal taxes (details here)

From the perspective of the Greater Mekong Sub-region, Thailand also has excellent infrastructure. Phuket in particular has good roads, first-class hospitals and international schools and its infrastructure is improving all the time. This is clearly visible as the island becomes increasingly accessible with the expansion of Phuket’s International Airport. Direct flights to Phuket are now available from Europe, the Middle East, Russia, Australia and many other countries within Southeast Asia. More arrivals to Phuket will surely mean more potential property buyers.

An improved lifestyle offered by living in Phuket is a major attraction for many expats. The weather, Thai culture, Thai and international cuisine, beaches, established expat community and sporting activities are some of the main advantages of living in Phuket.

Tourism in Phuket has been booming for a while now with tourist numbers growing year on year. This is supported by a first class hotel industry that provides huge economic benefits for Phuket and with more luxury hotel brands coming online the industry looks set to prosper well into the future.

For those looking to purchase or develop property here in Phuket, or other related business, there are many opportunities.

There are also good value resale options with Siam Real Estate’s Residential Market Report pointing out that resale properties in Phuket are on average priced lower than new properties. This provides opportunities for above average return on investment [ROI] through rental returns and capital gains. New off-plan condo and villa developments also offer interesting deals to those who buy early.

There is also a growing trend of more families using Phuket as a hub to do business throughout the Southeast Asian region. This is supported by the strong infrastructure here and, as previously mentioned, because Phuket is becoming a destination for international-level education, a trend which sees no sign of abating.

Phuket is also benefiting from another regional trend: property in Singapore and Hong Kong is now extremely expensive compared to this island. A lot of property investors in these locations are looking to invest on the island as they see more opportunity here and perhaps have been priced out of their own cities.

Despite what you might hear, Phuket is not yet overdeveloped and there is continuing market demand for new property developments.

Phuket already has a well-established and successful marine industry and, with the support of the government, Phuket’s marine industry is expanding. Much publicized recently was Phuket’s plans to attract more superyachts to the island’s marinas.

As with any business and investment, there are always threats that could derail the best laid plans. It is nearly impossible to predict the next black swan event, even though in hindsight some will say ‘I told you so.’ With this in mind we mention some potential threats to the market below.

Growth in popularity of competing tourist destinations inside Thailand and within the Southeast Asian region could attract tourists at the expense of Phuket. However, they have a lot of catching up to do.

Further strengthening of the Thai baht is unlikely as the US has ended its QE program and is very likely to start increasing interest rates later this year or next year, while Thailand seems set on keeping rates low. This will see funds flow out of Thailand and back to the west, which in turn will see the baht weaken against the US dollar and other major currencies.

Renewal of political instability is currently not an issue as the military government has provided much stability to the Thai economy and political environment. Prior to returning power to the electorate, the NCPO plans to implement political reforms that will provide a stable base for future Thai politics.

Having analyzed the market here we believe that the strengths and opportunities Phuket offers far outweigh the weaknesses and potential threats. Although the market is currently soft, we expect this to be nothing more than the usual economic trend that affects property markets all over the world. Phuket’s brightest days lie ahead of us.

For more information, contact Kevin Hodges by calling 076-324042 or emailing: kevin@siamrealestate.com.

— Kevin Hodges

 

Want more Thailand news from the Thaiger family?

📱 Download our app on Android or iOS for instant updates on your mobile
📝️ Join the conversation on Thaiger Talk - discuss news & life in our Thailand forums
📧 Subscribe to our daily email newsletter
👍 Like/Follow us on Facebook
🔔 Subscribe to or Join our YouTube channel for daily video updates

image

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Medical14 mins ago

Gender Health Clinic opens in Bangkok for transgender needs

Coronavirus (Covid-19)3 hours ago

30 million baht added to vaccine side effects compensation fund

Coronavirus (Covid-19)4 hours ago

Plan for 16-week gap between AstraZeneca vaccines dropped

Phuket Sandbox July 1st

days
hours
minutes
seconds

Thaiger is getting behind local businesses for the restart of tourism in July - up to 50% discounts across all advertising packages in June!

Sponsored by image

Coronavirus (Covid-19)5 hours ago

CCSA: 120 day reopening will proceed with conditions

Tourism6 hours ago

Sandbox latest, CCSA says all regions reopening must reach 70% local vaccination

Coronavirus (Covid-19)8 hours ago

Covid UPDATE Saturday: 3,667 new infections and 32 deaths

Politics9 hours ago

Thamanat elected to role of head ‘fixer’ in Palang Pracharat party

Expats18 hours ago

List: China has over 50% of all foreign-owned condos in Thailand

Coronavirus (Covid-19)20 hours ago

Government plans 10 million vaccines for July

World23 hours ago

Thailand News Today | Vaccine deaths investigation, PM heads to Phuket, BMA extends vendor licences | June 18

Thailand24 hours ago

1 million AstraZeneca doses arrive, Anutin says “more” on the way

Drugs24 hours ago

1.2 tonnes of methamphetamine and heroin seized near Malaysian border

Coronavirus (Covid-19)1 day ago

Pattaya bars plead for government help

Thailand1 day ago

Colour-coded zoning revised, restrictions to ease nationwide

Transport1 day ago

Department of Land Transport will reopen, issue licenses

Thailand4 months ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism4 months ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket4 months ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism4 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand4 months ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism4 months ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand5 months ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand5 months ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand5 months ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand5 months ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand5 months ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand5 months ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand5 months ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand5 months ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Thailand5 months ago

Thailand News Today | Southern floods, Face mask fines, Thai Air Asia woes | January 8

Trending