The Phuket Property Industry is gaining international exposure
Most people’s first exposure to Thailand is that of a tourist and the thought of buying property was probably not even on their minds. But foreign buyers of Phuket properties are not only holidaymakers.
Global exposure through international property shows now regularly feature villa and condo developments in Bangkok and Phuket. This is further promoted by local real estate advisors to ensure that their client’s property reaches an international audience regardless of whether that property is by a new developer or a resale by a private client.
The international property market is certainly becoming more interconnected as more people travel globally and making all corners of the world easier to reach.
According to Properstar, Changes to one of Thailand’s historic demographic constants is accounting for some of the increased demand in Phuket Property.
The influx of foreign buyers in Phuket – both those coming here to live, as well as those purely looking at investing opportunities – are not the only ones contributing to Phuket’s population growth.
For centuries, multiple generations of Thai families lived together in a single home, or a compound of homes. It was accepted that, when children went off to work, they would either continue living in the home, or if they moved, that their parents would move in with them.
Today, however, many younger Thais are “moving out” and buying their own houses or condominiums. This trend is certainly reflected in the population growth in Phuket which, at circa 7.4% per annum, is a higher rate than that seen in most regions of the country.
In addition to that, the growing wealth among the older generation in Thailand means that many have capital to invest in the property market. A number of wealthy Thais have created property portfolios which include villas and condos in Phuket.
The property market in Phuket is benefiting from both of these trends.
The long-term stability of the Phuket Property market makes it a very attractive place to invest.
One of the main reasons for that stability is this: there is virtually zero lending to foreigners buying Phuket property.
The financial crisis that threatened to melt down global markets in 2008 all started with a mortgage crisis. While complicated financial instruments played their role, the root cause was mortgages which the borrowers could no longer afford.
And the willingness to lend money to those “high risk borrowers” in the first place started a bubble in property which popped when interest rates started to rise.
Because foreigners are prevented from borrowing money for property in Thailand, the industry in Phuket is almost entirely a cash business. Without the lending, there is no risk of default. Without the defaults, there is no boom bust scenario to play out in Phuket.
Tourism may be driving the property market in Phuket but shifting demographics and the ongoing infrastructure improvements both point to strong prospects for Phuket property as a long-term investment.
One thing is plain: foreigners are investing in Phuket property, either as homes or as rental properties, and the market remains buoyant.