The vast majority of buyers in Phuket today have a positive outlook on the property market, and it is easy to see why. It is always good to understand what influences any market, and here we examine the key drivers ahead for the Phuket real estate sector.
The island’s natural beauty has long inspired foreigners to move here. Photo: The Phuket News / file
A Stable Real Estate Sector
A credit crisis typically inflicts the greatest immediate pain on the property sector. Because lending to foreigners is restricted, however, the booms and busts witnessed in other real estate markets around the world have not really been seen in Phuket.
Positive Effects of Inflation
Much of the trillions of dollars created by post-2008 quantitative easing in the United States flowed into global stock and property markets.
Investors from around the world came to buy Thai property, and prices have certainly risen. But the increases have not been excessive, and Phuket property has avoided “bubble territory”.
Global marketing has had a significant impact on the Phuket property market. In addition to properties being sold to those living in Thailand and to people visiting on holiday, Phuket now receives incredible international exposure. In fact, property shows are now promoting Phuket property around the world.
Even without the foreigners who have decided to make Phuket their home, Phuket is experiencing strong population growth (over 7% annually), which is higher than most other regions of Thailand.
Historically, the elderly in Thailand have lived with their children, but many younger Thais are now living in condominiums, townhouses or in gated housing estates.
Both of these trends are driving the local property market in Thailand.
Thais Marrying Foreign Nationals
It is no secret that foreigners who come to Thailand often find a Thai partner. This trend is not slowing, and obviously creates another dynamic within the Thailand property market.
Should the couple decide to live in Thailand, and purchase a home, this would be an obvious boon to the real estate sector (and to the economy as a whole) because the capital to purchase the home would typically be transferred into Thailand from overseas.
The Hospitality Driver: What Tourism Means for Phuket Real Estate
For a small country, Thailand has a remarkable tourism industry. Thailand is consistently among the top five countries in the world in terms of revenue generated from tourism.
In fact, at US$46 billion per year, Thailand outstrips both France and Italy in this category. Tourism is growing steadily year-on-year, and currently contributes circa 20% to Thailand’s GDP – nearly double the global average.
Tourists are clearly part of the fuel that keeps the property sector burning.
Ongoing Improvements in Infrastructure
Anyone who has lived here or visited Phuket during the last couple of decades has seen remarkable upgrades to the island’s infrastructure.
Both the local and national governments have taken these improvements seriously, and hundreds of billions of baht have been allocated for public transportation projects, including rail, bus and airport upgrades, all designed to make travelling to (and around) Phuket much smoother.
The island’s improved road system means that there is land which can be developed close to or adjacent to these new roads, which will bolster both the tourism and the property markets.
This article is from the 2018/2019 ThaiResidential Phuket Property Guide. To download the 2019/2020 Guide visit: ThaiResidential.com/phuket-property-guide