PHUKET: Welcome to the brand new year of twenty thirteen. So far the twenties have been pretty disappointing. Music seems to have taken on an alter personality with televised ‘talent shows’ now taking us dangerously close to a purgatory known as ‘karaoke-land’.
There are the movies, but sequels to mega-blockbusters seem to be rolling out faster than one of those greyhounds chasing the magic, metallic rabbit. Round and round we go.
Politics gets a yawn. Terrorism a niggle of anxiety and sports… well, we have Lance to thank for his fabulous great big lie: “I did not dope.”
Getting into the fray in Phuket, it seems momentum has turned to talk, news and idle chit chat about all things Russian. Not since the Cold War lapsed into a coma and the Berlin Wall came tumbling down like a poorly built shophouse, have these guys been in the spotlight so much.
It seems there is an outcry against the rising tide of Russian visitors here, doing business and buying property. Cresting on what has been one of the best high seasons ever, the tone is bittersweet from the tourism sector.
To frame the picture, as the world economy retracted during the global financial crisis, Asia, which includes Phuket, boomed. We built up a steady flow of new midscale hotels, for a large part indistinct properties which were vaguely similar, in an Alzheimer’s sort of way, and lacking in any real DNA. Personally I call this sector the ‘same sames’.
At the same time, prosperity grew among local citizens who started new service businesses such as shops, restaurants, travel agencies, tour companies and real estate agencies. Mass tourism enabled them to buy new cars, condos and cash flowed in. It must also be said that credit limits have also gone into orbit.
Everyone was prepared for more tourists, but what happened next was a massive wave of ‘Russians’ (more correctly on a broader scale, Eastern Europeans).
Charter flights filled to the brim, tour buses were jam packed and the beaches were full of the great untanned.
Suddenly there was an outcry from every corner of Phuket: “Too many Russians!” The island was overrun with them. Media reported on growing violence and then there was a taxi blockade over suspected Russian transport drivers; illegal shops and businesses. The police were called in and the ominous cycle of investigation began. My sarcastic self might add a LOL after that last line.
As for these new visitors, after decades of isolation, they just want to bust out and have some fun. Who can blame them? I’ve been to Moscow in the winter. Phuket has always been a haven for snowbirds, starting with the Germans, then the Scandinavians and now this emerging mass market. You could add China to the equation, though somehow those following that flag have not incurred the wrath of the locals. At least not yet.
Tourism and business leaders are issuing quotes about wanting higher spending visitors, and ranting about “zero baht tourists”. The last term is too crazy to even accommodate as I dare you to travel on a two-week holiday anywhere and not put money into the local economy.
Phuket’s tourism sector is like a child who goes into a candy story with a thousand baht. The eyes are ultimately bigger than the appetite and when the money is spent and all the ice cream is gone, there are only groans of remorse. The fact is that the island keeps on building more and more and once you punch the ticket of mass demand, there is no getting off the train.
But let’s get back to the angst over all these Russians. For the most part, the entire group is actually made up of a far larger Eastern European market. While I’m American, from a country well known for poor awareness of geography, at least I can tell the difference between Poland, Latvia, Uzbekistan and Kazakhstan.
Look at Russia; it gave us the Bolshoi, great literature and of course those guys in red. No one is perfect. My own USA has bred an entire culture of gun-toting, Tea Party-supporting, Nascar-loving, country-and-western-music-singing, God-fearing xenophobes. I’m not even going to start poking fun at the Brits, Aussies, Germans or the French. It’s too easy.
In Asia’s crowded house, and yes, here in Thailand, which somehow sleepwalks itself from crisis to crisis, moderation and living in a rainbow world of multi-culturalism is its greatest strength. Phuket’s welcome mat to overseas visitors and investors should not be rolled up simply because we now have a large segment of Russian tourists.
Moving through 2013, the current spate of xenophobia will no doubt dim in the light of an, as yet unseen, freight train of unanticipated events and circumstances. Our lives today move in what seems to be ten-minute cycles and it seems the next big debacle is never more than a mouse click away.
And Lance – yes, you did dope.
Bill Barnett is managing director of C9 Hotelworks and can be contacted through C9hotelworks.com.
— Bill BarnettKeep in contact with The Thaiger by following our Facebook page.
Coronavirus, and Thailand’s property market
The Coronavirus outbreak poses challenges for Thailand’s real estate market as potential Chinese condominium buyers remain stranded in China. Analysts believe Chinese condominium transfers in 2020 will be at least 25% lower than average because of the challenges. Meanwhile, some believe that the outbreak may bring opportunities for non-Chinese buyers and in the long-run, the Chinese may be looking for an overseas refuge in the event of these types of emergencies.
Market remains weak
The pandemic, which started in China, is hurting the condominium market as Chinese nationals account for half of the international buyers in Thailand, or 57.6% of the total foreign condo owners in 2018.
Vichai Viratkapan, acting director-general of the Real Estate Information Centre says that 50% of Chinese condo transfers are expected to disappear in the first 2 quarters of this year and the total transfer value by the Chinese will miss the mark of the usual 29 billion baht by about 25% (around 7 billion).
However, since Chinese property buyers only make up 6% of the total international and domestic housing transfers in Thailand, the total housing transfer number in the country is likely to be similar to last year.
Thailand adjusts GDP growth target due to coronavirus
On Monday (February 17), the Office of the National Economics and Social Development Council said Thailand’s GDP growth rate is predicted to be about 2% this year, a record low in the last 6 years. They forecast the rate will be achieved if the pandemic ends before April or May, tourist arrivals reach 37 million, and the world economic growth grows 3.2%, among other factors. Otherwise…
The Chinese are reluctant to complete transfers
The virus has continued to affect hospitality operators, including hotels and condominiums that service tourists, nationwide. Since China has suspended tours, put restrictions on movement, and locked down cities, home to over millions of people, it also poses a threat to real estate developers as their clients are unable or unwilling to fly.
“Currently multiple off-plan condominium developments are approaching completion, and Chinese clients are unable or unwilling to transfer. Chinese clients who made a reservation in Q4 2019 are requesting a refund and withholding their investment,” said Marciano Bijmohun, Business Development Director at FazWaz Property Group.
He believes every condominium that is in transfer status will see the percentage of non-transfer units rise in the coming months.
“These non-transfer units will cause a big financial hit to developers.”
If a client refuses to transfer, does not comply with the terms and conditions stipulated in the sales and purchase agreement, and decides to release the property, their deposits will be forfeited.
“However, there is some good news, these non-transferred units can be offered with a discount to new clients.”
Also, as China has been susceptible to a few disease outbreaks – from bird flu and swine fever and the current coronavirus – it may prompt Chinese buyers to look for second homes outside of China.Keep in contact with The Thaiger by following our Facebook page.
Major condo developers in Bangkok are looking for rental clients
As sales have taken a nosedive since last year, major condominium developers in Bangkok are looking for rental clients.
As an example, L.P.N. Development, which developed condominiums and houses under the Lumpini brand, is offering newly-launched condos for rent. The company plans to attract tenants by offering lower or slightly lower rents than the market price for a 3 year contract. The rented units are then combined and sold together to investors with 5-6% guaranteed rental returns which LPN adds on top to boost sales.
The strategy has been rolled out as some newly-built projects have seen less than 50% sales. Rents that are collected will be used for room maintenance. LPN condominiums that offer this strategy include Lumpini Township Rangsit-Klong 1 (2,700 units), Lumpini Place Rama 3 Riverine (100 units), and Lumpini Park Phahon 32 (100 units), or the total of 2,900 units worth 2 billion baht.
Another Bangkok developer, Supalai, has also unveiled Supalai Smart Solution, which offers a 30 year lease as an alternative to buying freehold, with the price 35-40% lower than purchasing the units. Buyers can pay 20-40 installments to Supalai with 0% interest within the period of 60 months.
Supalai believes this will meet the demands of high-earning customers, senior customers, and foreigners. Condominiums that offer Supalai Smart Solution are in Bangkok, Pattaya, Chiang Mai, Phuket, and Rayong such as Supalai Oriental Sukhumvit 39.
Many developers have seen sales plummet since last year, due to internal and external factors, including slowing economic growth, tighter mortgage regulations, and the strong baht which affects Chinese buyers, who are the major condo investors in Thailand.
SOURCE: positioningmag.comKeep in contact with The Thaiger by following our Facebook page.
Tips when buying a vacation home in Thailand
by Marciano Birjmohun
Imagine beachfront villas, riverfront condominiums and mountain hideaways. Vacation homes like these are often purchased for particular lifestyles and leisure activities. However, buyers may need to consider other factors to make the best buying decision. Rental management, for instance, should be considered as holiday home usage often peaks during the holidays, and many homeowners want to benefit from their investment, all year round.
Back in the 80s and 90s, close proximity to your primary residences was a major factor; most vacation homes were within driving distance or a short domestic flight away. However, globalisation has removed the barrier, and these days, investors cross land and sea to acquire their dream homes.
Location is the most important aspect when purchasing a vacation home for both residential and commercial reasons. When considering the location, keep the following questions in mind: Which recreational activities are available? Is there sufficient infrastructure such as mass transit, restaurants, and entertainment spots? Does the location offer a short commute to the airport? And, what kind of developments can we expect to see in the area?
Set in lush tropical gardens, Trichada Sky villa offers a private sanctuary. The pool & garden beckon while the elegant layout & design confirm you are here to relax. Pitched roofs over the common living spaces emphasise the tropical lifestyle.
Holiday lodges in Chiang Mai are best visited during the cooler period of the year, while the opposite is true for beach front homes in Phuket. Vacation homes are directly linked to seasons and climates. When purchasing a vacation home, consider which season matches with your preference and schedule – investors who live in the colder hemisphere often prefer a home that offers a “warm” welcome while people in tropical countries are tempted by a crisp hideaway.
Chiang Mai Onsen Wellness Resort is primed for wellness investment, set amidst unspoiled nature on a natural hot spring in Northern Thailand.
Nature and scenery
Whether you’re looking for oceanfront, mountains or beaches, everybody is looking for that perfect, personal vacation sentiment. This is a very subjective aspect of vacation homes and often the underlying trigger in buyers’ choices. It can be the rhythmic ebbs and flows of the waves that lull you to sleep or the grand mountain that inspires awe and ignites adventurous spirits. Your ideal home should be a retreat where your inner self feels at rest – or at its best.
Beachfront Bliss does not compromise when it comes to ocean views. The low-rise condominium sits on one of Phuket’s most beautiful beaches, making for a perfect seaside escape.
Thanks to vacation rental companies, holiday homes have gained global popularity and opened doors for millions of travellers each year. When purchasing a holiday home for investment, it is important to research rentability in the area, including: Which homes are in my area, and what kind of rental and hospitality services do the competitors provide? Is there demand and potential in this location? Which seasons will have the highest occupancy and how can I accommodate those travellers? The good news is high demand and a good reputation put your property ahead of the game and increase your rental returns.
Every detail in Chandra Villa on Koh Samui speaks of harmony with nature, from the lounge couch to the woven lanterns.
As a vacation homeowner you will not be able to manage your own property on a weekly or even monthly basis, and expect seamless results. It’s important, therefore, to work with a reputable rental management company or hospitality operator. These days, merely managing rentals is not enough; providing top tier hospitality is the key to success.
Keep in mind that the largest operator is not always the best operator. In many markets, boutique operators have created positioning that penetrates niche markets. In either case, that company will become your business card – and the point of contact between your clients and your property. Maintain frequent communication with the operator and have them provide regular reports.
M Gallery Residences, MontAzure Lakeside exudes charm and luxury in its design. This hotel-operated community is surrounded by lakes and tropical gardens.Keep in contact with The Thaiger by following our Facebook page.
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