From The PR Web
If anyone doubted the depth of overseas interest in Thai residential property; the continued sales of Bangkok condominiums and high quality resort properties notably in Phuket in the first quarter of 2007 has shown remarkable resilience as reported by CB Richard Ellis (Thailand).
Over the last three months, the level of enquiries has shown that demand and interest in Thai real estate remains strong. Our enquiry levels for resort homes have never been stronger and whilst buyers carefully weigh up political considerations, we are still closing sales and received deposits in all our offices"
The political uncertainty resulting from proposals made by the current Interim Government has given rise to concerns both domestically and overseas on the economy and impacted inbound investment, but the attraction of Thai property remains strong, to end users.
This sustained demand by end users and people looking for a quality lifestyle has resulted in continuing sales. Most quality condominiums in Bangkok have since 2002 enjoyed 40-50% sales to foreigners. These high quality properties in great Central Business District locations such as The Met or Athenee Residence have enjoyed significant capital appreciation.
These buyers have brought friends and colleagues into the market keen to follow in their success in investing in Thai property.
Purchasers in Phuket have virtually all enjoyed 50-100% capital appreciation and this factor coupled with a lifestyle to rival any worldwide resort has promoted continued interest in this destination. The Shangri-la Pool Villas launched in February this year have achieved incredible interest and strong sales. Thai resort properties with excellent sea views are still a fraction of the price of Caribbean property and this factor is creating growing global demand.
These increases may seem exaggerated but actual sales and resales bear this out. Phase I of Royal Phuket Marina, launched in 2005, completely sold out last year and resale stock now commands premiums of up to 100% as the Marina is now complete and in operation.
However, other countries such as Vietnam and Malaysia are studying the success of Thai resort properties and are themselves starting to bring resort product to the market. In Malaysia, foreigners are able, under their Second Home Policy, to own freehold property and to get 10 year visas, although, most resort developments to date, have actually been sold with 99 year leases. Vietnam currently offers 50 years leases to foreigners but Viet Q's have created an additional demand repatriating money from overseas. Total sales in these markets are only a fraction of the Thailand resort market.
CB Richard Ellis now sees the coastline from Da Nang in the north all the way through Thailand to islands such as Langkawi and as far south as Borneo (Sarawak and Sabath) as the Mediterranean of Asia.
We believe this growth trend in resorts will continue with Phuket very much at the picnical of the market having the highest international connections, the highest values, the most built quality stock. Phuket is the only resort which can boast facilities for private jets, marinas, international hospital and schools.
Despite increasingly competitive neighbours, Thailand is still, by a large margin, the destination which attracts the volume of enquiries and ongoing sales
Given that CB Richard Ellis sees an increase in genuine demand and a drop off in the numbers of developments launched due to the political climate and we see a situation when Thailand returns to a democratic government, with elections to be held this year, prices will react with sharp increases, just as they did ask after the tsunami due to pent up demand and a lack of new projects coming on to the market.
Developers such as the Shangri-la Villas and Royal Phuket Marina who continue to bring new quality schemes to the market deserve support. In hindsight these new launches will prove to have been smart moves both for the developers and the initial buyers who take advantage of a temporary lull in the market to buy prime units at launch prices.
In conclusion, CB Richard Ellis is impressed with the strength of overseas demand which continues unabated for Thai residential property; clearly this demand would increase dramatically with clear positive Government policies and with any improvement to land tenure such as longer leases or extension on ratio of condominium freeholds. But given the existing situation and looking at the market as it is today, there is still strong demand for Thai property and a growing interest in residence in Thailand.
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