It would be nice to write about the Phuket Property Market without using the words ‘pandemic’ or ‘Covid’. Unfortunately, for nearly two years now, the COVID-19 Pandemic continues to impact all facets of our lives – including the market for homes and rental properties on the stunning tropical island of Phuket.
But while Thailand may be struggling to restart its tourism economy, many people remain surprised by how buoyant the property market truly is.
It is hard to believe that it was 18 months ago that we cautioned readers not to sit back and wait for ‘fire sales’ of villas and condos in Phuket. There were always going to be owners whose personal finances were stretched so thin that a job loss or furlough would make it difficult for them to maintain their second property. This was especially true given the lack of tourist rentals.
Any such emergency sales were few and far between, however, and were typically completed before the property could be broadly listed. The fact that property is a cash market for foreigners in Thailand, with hardly any loans or leverage, meant that owners simply had an asset on their books which generated no income, and which they could not use themselves. People simply had to ‘wait it out’, and many continue to do so.
But there are also owners who have managed to withstand the pandemic up to now, but they are fed up with waiting for their income stream to return, and they are selling. What they are not doing, however, is letting their properties go for a song.
To be clear: there are still bargains to be had, but as we observed early on, there is not a rash of fire sales. Offers to buy Phuket property are coming in across the price spectrum – for condos and villas alike – and the market remains buoyant.
Phuket Sandbox was expected to further boost the real estate sector, as the island was opened to vaccinated tourists from around the world. This attempt to slowly restore Thailand to normality may not have lived up to the original lofty expectations, but despite the more modest trickle of tourism, sales of property to investors from overseas have continued.
Prior to 2020, Chinese buyers were a growing demographic on the island, and even now Chinese investors (generally those with their money outside of that country already) and many from Hong Kong, continue to be attracted to Phuket property. But it is not only Chinese nationals, we have seen increased interest from foreigners of all nationalities based in Hong Kong as well as Singapore.
Germans and Swiss also seem to property hunting in surprisingly high numbers. There have also been the usual Russian, British, French, Dutch and North American buyers. Naturally, Thai nationals have also been hunting bargains on the island.
Australians have always had an affinity for Phuket but the current travel restrictions make it difficult for them to fly here. That has not stopped Aussie investors from buying remotely however, or flying down from Bangkok if they happen to live in the country already.
Those with flexible schedules and the money to spend are flying to Phuket and booking the mandatory 14 days in an approved hotel. While they are not free to change their accommodation for 2 weeks, they are free to explore the island after one day (following a negative Covid test). Other no-less motivated buyers meet their property agent on Zoom, WhatsApp, Skype or WeChat and after establishing their property preferences, conduct virtual tours of the condos and villas that meet their requirements.
Although Phuket’s numbers are much higher, Thailand’s vaccination rate is only 13.1% of the population at time of writing, so it is anyone’s guess when the country (or even Phuket) will open its borders again fully to all visitors.
As we have seen during the last 20 months, agents and buyers alike have adapted to this ‘new normal’ and the business of buying and selling property in Phuket continues.
Despite the ability of the real estate industry to adapt, Phuket is not the same place without the beaches full of sun worshipers during the day, while the bars and restaurants spill out onto the pavement at night. Not only will the island be a little bit more fun, but anyone who invests in property now will be rewarded by rising prices and increased rental yields when the country fully reopens.
Suffice it to say, for many reasons, we are all looking forward to the day the ‘old normal’ is restored.