Representing the Best Real Estate in Phuket

Phuket Residential MarketView Q4 09

Q4 2009 saw a continued recovery in the Phuket property market. Sales of resort property improved but were still at low levels and mainly concentrated in a limited number of projects.

The level of built but unsold inventory of completed condominium and villa units is low.

Prices for built property have remained relatively stable with few examples of forced sale situations.

Purchasers are cautious and are focusing on projects promoted by known developers where there has been visible construction progress. We believe that demand is recovering.

The total supply of completed resort condominiums was 2,681 units at the end of Q4, an increase of 9% Q-o-Q and 30% Y-o-Y. Five Condominium projects were completed in this quarter. The single unit type that accounts for the largest proportion of Phuket’s completed condominium supply are two-bedroom units in entry-level projects.

No new condominium projects were launched in Q4 2009.

We estimate that 13% of completed resort condominiums have not been sold.

During Q4 2009, the average asking price of condominiums being marketed was THB 86,755/m2.

Villa

The total supply of completed villa projects was 3,472 at the end of Q4. There were 13 villa projects completed in this quarter.

As expected, completed units have the highest sales performance, with 76% sold. 58% of villas in projects under construction have been sold. We estimate that there are 372 units that are under construction still available for sales.

The average asking price of luxury villas being marketed was THB 124,110,000.

Outlook

Overall Phuket has come through the combination of the global financial crisis and Thailand’s political problems relatively unscathed.
The opportunity and challenge is for developers to identify target markets and create properties that match those requirements. Potential buyers will be more cautious and will want to be confident about ability of developers to deliver product both in terms of their financial resources and development expertise Phuket Villa Sales - Read full report

No Significant Drop in Prices Expected

The Thai market has historically shown it can weather crises without damage to investors.

The ‘Red Shirt Protests’ that turned parts of Bangkok’s shopping and financial district into a barricaded fortress for more than 2 months is unlikely to lead to dramatic drops in property values, although some people have deferred buying decisions for the time being, reveals a study by a company well known for its research.

The reason is because the property market has been dampened by political uncertainty for the last five years.

Those who have followed the pattern of property values during periods of political uncertainty in Thailand will have noticed that prices rise in good times but hold and do not drop in bad times, with steady growth again after the situation improves.

One exception was real estate prices did drop dramatically during the 1997-98 Asian economic crisis, when real estate prices did drop dramatically. But it has to be explained that these plunges took place among secondary grade properties and not prime ones, whose values held up.

The impact of the recent protests, in the opinion of most people living in Thailand, both Thai and foreigners, will be short-lived

So all in all we are still seeing substantial confidence in the Thai property market.
Turning to the resort markets, the study shows that there was no evidence of a drop in value in Phuket and Koh Samui as existing foreign owners of property on the two islands are choosing to hold on to their assets.

The fundamentals of the resort markets are that they are predominantly foreign markets with purchases made with surplus funds. Since there is no financing available to foreigners to buy property, almost all purchases are 100% cash.

Looking at Phuket, most of the buyers are sitting on positive financial gains on their investment and there is no direct pressure to sell. So generally speaking, people only sell when they have made substantial profit. This means there is generally little stock on the market at any one time.

In fact, it has been the global financial crisis that has had the prime influence on the resort markets and this has led to the cancellation of many developments. While big Thai companies have launched major projects in Phuket in recent years, quite a lot of the developments have been foreign-led, although some of these projects have been quite small.

From our experience we have seen a reduced volume of sales but prices are still recording substantial gains for those few sellers in the market.

Despite the recent problems, Thailand is still a top resort destination. And although good prospects in emerging markets such as Cambodia have been reported over the past couple of years, there is no stock of quality resort properties there today.

To see the full report, click here.

Phuket Voted ‘Best Asian Maritime Capital’

While Thailand’s tourism recovers from political demonstrations in the capital Bangkok and some northern provinces, which saw governments advising their citizens not to travel to Thailand, the paradise island of Phuket, 900 km south of Bangkok, has received a major accolade. Phuket was voted ‘Best Asian Maritime Capital’ in the annual Asian Boating Awards 2010 hosted by luxury magazine Asia-Pacific Boating.

Yachting, whether sailing or power boating, is one of Phuket’s best-kept secrets. But probably not for much longer as word of this magical cruising area spreads. Compared to more established yachting destinations in other parts of the world, the waters and small islands around Phuket are unspoiled and little traveled. Deserted beaches and otherwise inaccessible ‘treasures’ await those who explore by sea.

MyPhuketInfo.com supports Phuket’s high value/low impact yachting tourism with page after page of detailed information and images on every aspect of boating holidays in Phuket, including day trips, sailing yacht charters, speed boat tours, sport fishing and yachting events.

Demonstrating the resilience of this branch of tourism, all the while tourists were shying away from Thailand, fearful of becoming embroiled in the protests, the Top of the Gulf Regatta went ahead in Pattaya, while the Koh Samui Regatta maintained similar entries to last year and interest in Phuket’s own forthcoming Six Senses Phuket Raceweek was gathering pace.

As Phuket’s local travel guide, MyPhuketInfo.com is an invaluable source of independent information on the growing number of charter boats plying Phang Nga Bay just off the north of Phuket, as well as the countless pristine islands and beaches to the south. Each year, the number and quality of boats available for charter - many of them built in Phuket itself - expands, with operators departing from all points on the island.

For the adventurous traveler who wants an escape from the hustle and bustle of Phuket’s major tourist beaches, there is nothing to beat taking to the water in search of Greater Phuket’s real paradise.

The Protests: What Really Happened

It is no secret to us here, on the ground in Thailand, that the coverage of the ‘Red Shirts’ protests in Bangkok by the international media, especially by CNN and BBC was very poor and very biased. They made it look like these protest were an up-rise by the poor rural people from the north and north east of the country, against the so called ‘elite’ from Bangkok, and were demanding democracy and equal rights. However, nothing could be further away from the truth!!

‘Democracy’ was used as a façade, a mask, to hide the true intention of the ‘Red Shirt’-leaders to organize these protests: to cause mayhem, trying to bring the Abhisit government down, by such paving the way for new elections, so that the real ‘brain’ behind the protests, their paymaster, convicted and fugitive criminal Thaksin Shinawatra, who is living in self imposed exile to avoid a 2-year jail sentence after being found guilty of corruption while in office as Prime Minister, could return to power if ‘his’ party was to be voted back in power. By ‘buying’ enough votes, an illegal, yet very common practice by Thaksin’s party ‘Pheu Thai’, his return to Thailand and power, and white wash of all his crimes would have been assured.

That the poor and uneducated people from the rural north can be fooled by such demagogue practice can be understood. And these people could very well use the 500 to 2,000 Baht a day they were being paid to attend the protests. A fact that can be proven by many videos that can be found on ‘You Tube’, but ignorantly ‘forgotten’ to be mentioned by most international media.

What is more difficult to understand is how even European leaders could fall for this nonsense? Below I have summarized the major points made during the European Parliament session on 20th May:

1) This conflict is about the red shirts versus yellow shirt government supporters.

Now, this is where they are already wrong. No, it is not red versus yellow. The People’s Alliance for Democracy (PAD) supports Sondhi Limthongkul and the New Politics Party, which isn’t a part of the coalition government. They haven’t done anything in this crisis other than sit on the sideline talking tough and making threats. They condemned the government’s handling of the situation at every turn.

2) There is mass censorship. All media has been blocked.

No, wrong again. Only the red media has been blocked. And for a very good reason. It was calling for violence, arson and terrorist attacks like bombings, burning Bangkok, killing the Prime Minister… Would not any other country in the world shut down media that is inciting violence?

3) The government should have applied the road map.

Yes, and they intended to. But how could they? The UDD (Red Shirts) turned down the road map. Somebody (CNN and BBC) forgot to report that part.

4) All citizens should enjoy a free election.

Ah, finally, here they are correct. At least, partly. Because… all Thai citizens were about to enjoy a free election, on 14 November this year to be precise, as proposed by Prime Minister Khun Abhisit as part of his road map. Initially, the UDD (Red Shirts) agreed to accept that offer. But after talking with the paymaster in exile (Thaksin Shinawatra) they changed their mind.

5) They spoke out against Emergency Law.

Bombings and shootings in the streets, the two months long occupation of the major business and shopping district of Bangkok, causing millions in damage daily, making people losing their jobs, people went out of businesses, attempting to take over ThaiCom, the communication lifeline of the country… Was none of this reported by the international media in the months prior to May 19?

Please see below links to ‘You Tube’. I feel that the links give a very good account and feedback to what has been going on here in Thailand and the way forward, as presented by the Prime Minister Abhisit to an International delegation.

1. http://www.youtube.com/watch?v=q4-hEoESykk
2. http://www.youtube.com/watch?v=PHsE6uLQYA0
3. http://www.youtube.com/watch?v=oL1GBht7vvY
4. http://www.youtube.com/watch?v=56XUERrfUQI
5. http://www.youtube.com/watch?v=oju0Dt9VjXA
6. http://www.youtube.com/watch?v=ptBf5fFVKk4
7. http://www.youtube.com/watch?v=SVbj0vOQ9qM
8. http://www.youtube.com/watch?v=Fr8DLa13vOE