Phuket Property Watch Your Eyes on Real Estate in Thailand
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Our theme for today is to look for the big trends that will dictate the course of things, regardless of your business desires. We’ll start as always with non-local news, this time from the Bangkok Post about the forces behind sustained demand in Thailand and cities like Bangkok for investment and vacation properties by Chinese buyers. This detailed piece from Juwai CEO Carrie Law breaks down two ‘Megatrends’ for us. The first describes how China, approaching four million US dollar millionaires on the mainland alone, has a burgeoning upper-middle class, and is currently seeing a 6+% growth rate (double what is common in the United States). Due to corruption and other issues domestically, foreign real estate investment is seen as trustworthy, and barriers to entry are smaller in Thailand compared to more mature property markets. This reached a Megatrend critical point at the end of 2016 when stricter government regulations enforcements on capital controls reoriented property buyers from more expensive Australian and United States developments to projects in cities like Bangkok. Law expounds on the effect this has had:
Chinese buying inquiries for Thai property surged as a share of their inquiries about property worldwide, from about 5% in 2016 to more than 13% in 2017 and even higher in 2018.
Sounds like Bangkok, while subject to local and regional effects, should remain a healthy investment for a good while.
Our next item today is a nice tangent for our property & lifestyle in Phuket readers, from The Thaiger’s Thailand News, an article about the Phuket Light Rail project which in 2023 will extend nearly 60km from the Phuket Airport north across the bridge to Tha Noon, Phang Nga, and south down through Phuket Town to Chalong Circle. With a value of 35 billion Thai Baht, a new round of presentations and discussions on Friday in Bangkok are generating interest as the MRTA is opening investments to local administration and to the private sector. If you know Phuket, you’ll have noted in the description above that this tram runs through the central-east part of the island rather than the more tourist-targeted west coast; this is largely due to logistical issues. The prices are expected to fall in the 100 to 150 baht range, much cheaper than the 1,000 baht taxi fares to Phuket Town, but still requiring an additional mode of transport for most travelers hoping for the most carefree airport-to-resort experience in Thailand. Local Thai residents are the ones along the route (and worried about delays and fallout from a lengthy 3 year construction time), but very probably wouldn’t be willing to pay such fees without generous subscription discounts or other possible subsidies. However, as we remember from our Bangkok Lookback, BKK developers have recently been situating along mass transit lines, and per-sqm prices are skyrocketing as late. If Phuket does become the Phuket 2020 tech hub dream we’re rallying for, it wouldn’t be irrational to start looking at largely driven-by locations for future developments or surrounding businesses (like hospitals and clinics for the Phuket medical tourists for example) now.
Hope your 2019 continues to go well: keep working for it.
