Phuket Gazette

PHUKET: As we enter the second quarter of 2017, the real estate market in Phuket remains slow.

There are ‘pockets’ of demand: there is demand for freehold condos and discounted resale properties. Inquiries from the Thai domestic market are picking up and the condo market in Bangkok is doing well, with many developers there reporting strong sales so far this year.

During the past high season, rental occupancy on pool villas was very good, with many villas experiencing high occupancy rates, albeit at rental rates which were lower than in peak years. It is true to say that the current market remains challenging, but there are reasons to be positive about the not-too-distant future.

Like markets the world over, Phuket’s real estate market will experience ups and downs.
In 2014, Phuket real estate prices were at a peak, but the subsequent crash in oil prices and Russia’s economic downturn brought an end to it, and prices have come down since.

This is not necessarily a bad thing as markets get overheated and need a correction. They cannot go up in a straight line forever.

A correction will eventually bring in new buyers and can lead to a new sustained boom. Look at the US stock market which reached record highs this month after being written off by so many.

It is always difficult to time markets. However, prices have come down to a level where we are seeing increasing buyer interest as measured by the number of inquiries.

This should signal that the bottom of the market is being reached, with more people looking to buy in, and the argument for a bright future for Phuket is much stronger than the alternative.

The elections due next year, new 50-year leases for foreigners being mooted, infrastructure improvements, a new constitution in place and continued stability with ever-growing tourist numbers, coupled with current lower real estate prices, could lead to the next real estate boom here. For those with cash sitting idle in the bank at record low interest rates, it is a good time to be a buyer in Phuket and put that money to work.

For more information about this article, contact Kevin Hodges, Siam Real Estate (SRE) – Tel: 076-324042; Email: [email protected]; Web: siamrealestate.com.

This article first appeared in the February 15-21 issue of the hard-copy
Phuket Gazette newspaper.

Digital subscribers may download the full newspaper, this week and every week, by clicking here.

Keep checking the Phuket Gazette, join our Facebook fan page or follow us on Twitter
@PhuketGazette for the latest news updates.

— Kevin Hodges

1

A real estate agent saying "it's a good time to be a buyer"....... what a surprise!

Posted by Sir Burr April 22, 2017 06:02:02AM

Reply

6    1

2

A real estate agent saying "it's a good time to be a buyer"....... what a surprise!

Posted by Sir Burr

Yes, but imagine the points he could have scored if he'd recommended caution, pointed out all the current pitfalls and suggested that any purchases be deferred for at least another year. This could really give celeb status in the market. Someone's gonna do it, and he'll be my 'go to' guy when/if the Phuket market does begin to show some hope again.

Posted by Dan Cromwell April 22, 2017 07:50:32AM

Reply

2    3

3

A real estate agent saying "it's a good time to be a buyer"....... what a surprise!

Posted by Sir Burr

Yes, but imagine the points he could have scored if he'd recommended caution, pointed out all the current pitfalls and suggested that any purchases be deferred for at least another year. This could really give celeb status in the market. Someone's gonna do it, and he'll be my 'go to' guy when/if the Phuket market does begin to show some hope again.

Posted by Dan Cromwell April 22, 2017 07:56:30AM

Reply

1    2

4

Until foreign investors are allowed to own freehold on their home, the market will continue to suffer. We're talking European prices now, and by the way how can agents justify charging 6% commissions when Europe is 1%-3%?

Posted by harry April 22, 2017 11:06:32AM

Reply

7    0

5

Until foreign investors are allowed to own freehold on their home, the market will continue to suffer. We're talking European prices now, and by the way how can agents justify charging 6% commissions when Europe is 1%-3%?

Posted by harry

I'm thinking the brokers will say that buying and selling a property in Thailand is a minefield – far more difficult, risky and time consuming than the simple, straightforward process in Europe. They (the brokers) would certainly have some justification in saying this. Indeed, it can take them 6-8 months to close a deal.

Posted by Glen Riorden April 22, 2017 12:03:23PM

Reply

3    1

6

Until foreign investors are allowed to own freehold on their home, the market will continue to suffer. We're talking European prices now, and by the way how can agents justify charging 6% commissions when Europe is 1%-3%?

Posted by harry

I'm thinking the brokers will say that buying and selling a property in Thailand is a minefield – far more difficult, risky and time consuming than the simple, straightforward process in Europe. They (the brokers) would certainly have some justification in saying this. Indeed, it can take them 6-8 months to close a deal.

Posted by Glen Riorden

I'm afraid I don't agree. If anything, the process here is more streamlined. Structural surveys are rarely conducted and pretty worthless anyway. Bridging loans and escrow accounts are rarely a problem, and because they don't exist you simply make a purchase agreement, transfer the money and transfer the property. Or you don't. The agent's main job is finding the buyer, just like in the west.

Posted by CaptainJack April 22, 2017 12:55:28PM

Reply

4    1

7

Until foreign investors are allowed to own freehold on their home, the market will continue to suffer. We're talking European prices now, and by the way how can agents justify charging 6% commissions when Europe is 1%-3%?

Posted by harry

I'm thinking the brokers will say that buying and selling a property in Thailand is a minefield – far more difficult, risky and time consuming than the simple, straightforward process in Europe. They (the brokers) would certainly have some justification in saying this. Indeed, it can take them 6-8 months to close a deal.

Posted by Glen Riorden

I'm afraid I don't agree. If anything, the process here is more streamlined. Structural surveys are rarely conducted and pretty worthless anyway. Bridging loans and escrow accounts are rarely a problem, and because they don't exist you simply make a purchase agreement, transfer the money and transfer the property. Or you don't. The agent's main job is finding the buyer, just like in the west.

Posted by CaptainJack

More streamlined? Wow, such naiveté. The fact that structural surveys are rarely conducted makes a purchase far more – not less – risky (read: more work for the salesman/broker). The absence of bridging loans and escrow is also a major weakness, problematic and 'streamlines' nothing. But love the spirit (or treachery?) in your "simply make a purchase agreement" and transfer everything :) Conclusion: You yourself are a salesman (timeshare?) or a property broker!

Posted by Piet Van Zandt April 22, 2017 02:08:01PM

Reply

1    2

8

I'm thinking the brokers will say that buying and selling a property in Thailand is a minefield – far more difficult, risky and time consuming than the simple, straightforward process in Europe. They (the brokers) would certainly have some justification in saying this. Indeed, it can take them 6-8 months to close a deal.

Posted by Glen Riorden

I'm afraid I don't agree. If anything, the process here is more streamlined. Structural surveys are rarely conducted and pretty worthless anyway. Bridging loans and escrow accounts are rarely a problem, and because they don't exist you simply make a purchase agreement, transfer the money and transfer the property. Or you don't. The agent's main job is finding the buyer, just like in the west.

Posted by CaptainJack

Your correct that obtaining a property in Phuket is simpler than in Europe, but it is very risky because the lawyers here work for the deal to happen, but the legality is another story. And why in Europe it takes longer is that the lawyers there have to make sure everything is legal as they are accountable.

Posted by harry April 22, 2017 03:15:43PM

Reply

4    1

9

Until foreign investors are allowed to own freehold on their home, the market will continue to suffer. We're talking European prices now, and by the way how can agents justify charging 6% commissions when Europe is 1%-3%?

Posted by harry

If this was true, how do you account for the property boom that finally ended in 2008? This boom lasted 20 years, or more. I agree with you regarding agents fees. Outrageous for just sticking up a photo on their website.

Posted by Sir Burr April 23, 2017 07:51:54AM

Reply

5    2

10

Until foreign investors are allowed to own freehold on their home, the market will continue to suffer. We're talking European prices now, and by the way how can agents justify charging 6% commissions when Europe is 1%-3%?

Posted by harry

If this was true, how do you account for the property boom that finally ended in 2008? This boom lasted 20 years, or more. I agree with you regarding agents fees. Outrageous for just sticking up a photo on their website.

Posted by Sir Burr

How do we account for the 20-year boom? Western susceptibility to the then considerable powers of seduction of Thailand, and ignorance of some of the more fundamental market realities lurking just below the surface - things like laws, culture and economics. It was a fools' paradise and we were the buffoons and lemmings who danced in it.

Posted by Jack Martin April 23, 2017 09:07:46AM

Reply

3    1

11

Until foreign investors are allowed to own freehold on their home, the market will continue to suffer. We're talking European prices now, and by the way how can agents justify charging 6% commissions when Europe is 1%-3%?

Posted by harry

If this was true, how do you account for the property boom that finally ended in 2008? This boom lasted 20 years, or more. I agree with you regarding agents fees. Outrageous for just sticking up a photo on their website.

Posted by Sir Burr

Well, Sir Burr, the boom has gone because of the running saga of legality and foreign investors have now wised up. Until there is secure and transparent legislation, property will continue to suffer, and mainly at the expense of Bangkok developers so hopefully freeholds will eventually happen. But it's all up to them?

Posted by harry April 23, 2017 11:09:45AM

Reply

2    0

12

If this was true, how do you account for the property boom that finally ended in 2008? This boom lasted 20 years, or more. I agree with you regarding agents fees. Outrageous for just sticking up a photo on their website.

Posted by Sir Burr

How do we account for the 20-year boom? Western susceptibility to the then considerable powers of seduction of Thailand, and ignorance of some of the more fundamental market realities lurking just below the surface - things like laws, culture and economics. It was a fools' paradise and we were the buffoons and lemmings who danced in it.

Posted by Jack Martin

"Buffoons and lemmings"? Speak for yourself. I, like many friends made good profits on property in the 1990s and early 2000s.

Posted by Sir Burr April 23, 2017 11:51:01AM

Reply

0    3

13

If this was true, how do you account for the property boom that finally ended in 2008? This boom lasted 20 years, or more. I agree with you regarding agents fees. Outrageous for just sticking up a photo on their website.

Posted by Sir Burr

How do we account for the 20-year boom? Western susceptibility to the then considerable powers of seduction of Thailand, and ignorance of some of the more fundamental market realities lurking just below the surface - things like laws, culture and economics. It was a fools' paradise and we were the buffoons and lemmings who danced in it.

Posted by Jack Martin

"Buffoons and lemmings"? Speak for yourself. I, like many friends made good profits on property in the 1990s and early 2000s.

Posted by Sir Burr

I did too - but a pity I didn't sell it... all of it. Now well below water on everything I bought from 2000 onward.

Posted by Damaged April 23, 2017 12:37:19PM

Reply

1    1

14

The underlying value of a property, besides location, is the land. When I bought some land and had a house built, the cost of the land was about 30% of the total cost. That was in the year 2000. Presently, I would estimate that the land now makes up two thirds of the total value of the property. The market for empty blocks of land has always been more buoyant than the housing market.

Posted by Sir Burr April 25, 2017 09:26:58AM

Reply

1    0

14

The underlying value of a property, besides location, is the land. When I bought some land and had a house built, the cost of the land was about 30% of the total cost. That was in the year 2000. Presently, I would estimate that the land now makes up two thirds of the total value of the property. The market for empty blocks of land has always been more buoyant than the housing market.

Posted by Sir Burr April 25, 2017 09:26:58AM

Reply

1    0

13

If this was true, how do you account for the property boom that finally ended in 2008? This boom lasted 20 years, or more. I agree with you regarding agents fees. Outrageous for just sticking up a photo on their website.

Posted by Sir Burr

How do we account for the 20-year boom? Western susceptibility to the then considerable powers of seduction of Thailand, and ignorance of some of the more fundamental market realities lurking just below the surface - things like laws, culture and economics. It was a fools' paradise and we were the buffoons and lemmings who danced in it.

Posted by Jack Martin

"Buffoons and lemmings"? Speak for yourself. I, like many friends made good profits on property in the 1990s and early 2000s.

Posted by Sir Burr

I did too - but a pity I didn't sell it... all of it. Now well below water on everything I bought from 2000 onward.

Posted by Damaged April 23, 2017 12:37:19PM

Reply

1    1

12

If this was true, how do you account for the property boom that finally ended in 2008? This boom lasted 20 years, or more. I agree with you regarding agents fees. Outrageous for just sticking up a photo on their website.

Posted by Sir Burr

How do we account for the 20-year boom? Western susceptibility to the then considerable powers of seduction of Thailand, and ignorance of some of the more fundamental market realities lurking just below the surface - things like laws, culture and economics. It was a fools' paradise and we were the buffoons and lemmings who danced in it.

Posted by Jack Martin

"Buffoons and lemmings"? Speak for yourself. I, like many friends made good profits on property in the 1990s and early 2000s.

Posted by Sir Burr April 23, 2017 11:51:01AM

Reply

0    3

11

Until foreign investors are allowed to own freehold on their home, the market will continue to suffer. We're talking European prices now, and by the way how can agents justify charging 6% commissions when Europe is 1%-3%?

Posted by harry

If this was true, how do you account for the property boom that finally ended in 2008? This boom lasted 20 years, or more. I agree with you regarding agents fees. Outrageous for just sticking up a photo on their website.

Posted by Sir Burr

Well, Sir Burr, the boom has gone because of the running saga of legality and foreign investors have now wised up. Until there is secure and transparent legislation, property will continue to suffer, and mainly at the expense of Bangkok developers so hopefully freeholds will eventually happen. But it's all up to them?

Posted by harry April 23, 2017 11:09:45AM

Reply

2    0

10

Until foreign investors are allowed to own freehold on their home, the market will continue to suffer. We're talking European prices now, and by the way how can agents justify charging 6% commissions when Europe is 1%-3%?

Posted by harry

If this was true, how do you account for the property boom that finally ended in 2008? This boom lasted 20 years, or more. I agree with you regarding agents fees. Outrageous for just sticking up a photo on their website.

Posted by Sir Burr

How do we account for the 20-year boom? Western susceptibility to the then considerable powers of seduction of Thailand, and ignorance of some of the more fundamental market realities lurking just below the surface - things like laws, culture and economics. It was a fools' paradise and we were the buffoons and lemmings who danced in it.

Posted by Jack Martin April 23, 2017 09:07:46AM

Reply

3    1

9

Until foreign investors are allowed to own freehold on their home, the market will continue to suffer. We're talking European prices now, and by the way how can agents justify charging 6% commissions when Europe is 1%-3%?

Posted by harry

If this was true, how do you account for the property boom that finally ended in 2008? This boom lasted 20 years, or more. I agree with you regarding agents fees. Outrageous for just sticking up a photo on their website.

Posted by Sir Burr April 23, 2017 07:51:54AM

Reply

5    2

8

I'm thinking the brokers will say that buying and selling a property in Thailand is a minefield – far more difficult, risky and time consuming than the simple, straightforward process in Europe. They (the brokers) would certainly have some justification in saying this. Indeed, it can take them 6-8 months to close a deal.

Posted by Glen Riorden

I'm afraid I don't agree. If anything, the process here is more streamlined. Structural surveys are rarely conducted and pretty worthless anyway. Bridging loans and escrow accounts are rarely a problem, and because they don't exist you simply make a purchase agreement, transfer the money and transfer the property. Or you don't. The agent's main job is finding the buyer, just like in the west.

Posted by CaptainJack

Your correct that obtaining a property in Phuket is simpler than in Europe, but it is very risky because the lawyers here work for the deal to happen, but the legality is another story. And why in Europe it takes longer is that the lawyers there have to make sure everything is legal as they are accountable.

Posted by harry April 22, 2017 03:15:43PM

Reply

4    1

7

Until foreign investors are allowed to own freehold on their home, the market will continue to suffer. We're talking European prices now, and by the way how can agents justify charging 6% commissions when Europe is 1%-3%?

Posted by harry

I'm thinking the brokers will say that buying and selling a property in Thailand is a minefield – far more difficult, risky and time consuming than the simple, straightforward process in Europe. They (the brokers) would certainly have some justification in saying this. Indeed, it can take them 6-8 months to close a deal.

Posted by Glen Riorden

I'm afraid I don't agree. If anything, the process here is more streamlined. Structural surveys are rarely conducted and pretty worthless anyway. Bridging loans and escrow accounts are rarely a problem, and because they don't exist you simply make a purchase agreement, transfer the money and transfer the property. Or you don't. The agent's main job is finding the buyer, just like in the west.

Posted by CaptainJack

More streamlined? Wow, such naiveté. The fact that structural surveys are rarely conducted makes a purchase far more – not less – risky (read: more work for the salesman/broker). The absence of bridging loans and escrow is also a major weakness, problematic and 'streamlines' nothing. But love the spirit (or treachery?) in your "simply make a purchase agreement" and transfer everything :) Conclusion: You yourself are a salesman (timeshare?) or a property broker!

Posted by Piet Van Zandt April 22, 2017 02:08:01PM

Reply

1    2

6

Until foreign investors are allowed to own freehold on their home, the market will continue to suffer. We're talking European prices now, and by the way how can agents justify charging 6% commissions when Europe is 1%-3%?

Posted by harry

I'm thinking the brokers will say that buying and selling a property in Thailand is a minefield – far more difficult, risky and time consuming than the simple, straightforward process in Europe. They (the brokers) would certainly have some justification in saying this. Indeed, it can take them 6-8 months to close a deal.

Posted by Glen Riorden

I'm afraid I don't agree. If anything, the process here is more streamlined. Structural surveys are rarely conducted and pretty worthless anyway. Bridging loans and escrow accounts are rarely a problem, and because they don't exist you simply make a purchase agreement, transfer the money and transfer the property. Or you don't. The agent's main job is finding the buyer, just like in the west.

Posted by CaptainJack April 22, 2017 12:55:28PM

Reply

4    1

5

Until foreign investors are allowed to own freehold on their home, the market will continue to suffer. We're talking European prices now, and by the way how can agents justify charging 6% commissions when Europe is 1%-3%?

Posted by harry

I'm thinking the brokers will say that buying and selling a property in Thailand is a minefield – far more difficult, risky and time consuming than the simple, straightforward process in Europe. They (the brokers) would certainly have some justification in saying this. Indeed, it can take them 6-8 months to close a deal.

Posted by Glen Riorden April 22, 2017 12:03:23PM

Reply

3    1

4

Until foreign investors are allowed to own freehold on their home, the market will continue to suffer. We're talking European prices now, and by the way how can agents justify charging 6% commissions when Europe is 1%-3%?

Posted by harry April 22, 2017 11:06:32AM

Reply

7    0

3

A real estate agent saying "it's a good time to be a buyer"....... what a surprise!

Posted by Sir Burr

Yes, but imagine the points he could have scored if he'd recommended caution, pointed out all the current pitfalls and suggested that any purchases be deferred for at least another year. This could really give celeb status in the market. Someone's gonna do it, and he'll be my 'go to' guy when/if the Phuket market does begin to show some hope again.

Posted by Dan Cromwell April 22, 2017 07:56:30AM

Reply

1    2

2

A real estate agent saying "it's a good time to be a buyer"....... what a surprise!

Posted by Sir Burr

Yes, but imagine the points he could have scored if he'd recommended caution, pointed out all the current pitfalls and suggested that any purchases be deferred for at least another year. This could really give celeb status in the market. Someone's gonna do it, and he'll be my 'go to' guy when/if the Phuket market does begin to show some hope again.

Posted by Dan Cromwell April 22, 2017 07:50:32AM

Reply

2    3

1

A real estate agent saying "it's a good time to be a buyer"....... what a surprise!

Posted by Sir Burr April 22, 2017 06:02:02AM

Reply

6    1

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