Connect with us
CGIF-10th-Year-Anniversary

Ripe for the picking

Whilst there certainly isn’t blood in the streets here in Phuket the property market remains slow with a consensus to wait on the side lines.

Avatar

Published

on

“The time to buy is when there’s blood in the streets.” – Baron Rothschild

“You pay a very high price……..for a cheery consensus.” – Warren Buffett

Whilst there certainly isn’t blood in the streets here in Phuket the property market remains slow with a consensus to wait on the side lines.

A faltering global economy, the weakness of the European currencies, politics, have all contributed to the softness of the market here.

Phuket’s rental market has suffered too and is weaker than in recent times: there are less Russians seeking rentals, more hotel rooms and low oil prices mean less people from the Oil industry seeking rental properties.

However, should we really be feeling so pessimistic about the future?

The answer is no, Phuket’s future is very bright. All economies have their peaks and troughs and Phuket will surely rebound soon.

With the expanded airport due to open this month, strong and increasing arrivals, improving infrastructure, leisure facilities, continued high season rental demand, are just some of the reasons for a positive outlook and expected rebound.

When any market has a correction, opportunities will arise and Phuket’s property market is no different.

In the resale market we are now seeing sellers reducing prices, in some cases quite heavily and there are buyers / investors around who are picking up these bargain deals.

Property at these lower prices will produce higher than average rental returns but they won’t be around forever.

As an example a recent sale of a 130 sqm, 2 bed condo in Rawai, Phuket, foreign freehold with a partial sea view: was sold for a heavily discounted selling price of 4.5m THB!

Using conservative rental rates and even at only 60% occupancy net returns are projected to be nearly 6% p.a. (see the table below, rental rates range from just 1,500 to 3,000 THB / night).


SRE Rental Projections

The above rental rates above can be compared with the average rental yields throughout the SE Asian region. The chart below shows the average gross yields for Thailand are 5.13% versus Singapore and Hong Kong where yields are less than 3%.

Asia: Gross rental yields (%). – The properties are 120-sq. m. apartments located in premier city centres.rentalpropertyyield

Source: Global Property Guide Research – The gross rental returns (or rental yields) figures published by the Global Property Guide are based on the Global Property Guides own proprietary in-house research.

The findings by Global Property Guide Research match those of our in-house research into the average rental returns from properties in Phuket. See the below table from our most recent market research report.

Phuket Rental Yields - SRE Mkt report

The down turn in current market conditions has created opportunities for buyers / investors to achieve above average income returns on property purchases. Property is an important part of an investment portfolio and can generate a steady income return through rental incomes and capital gains upon eventual sale and it seems that now is the time to be buying into Phuket. Why wait to pay a higher price once the cheery consensus is that the market has recovered?

For more information about this article contact Kevin Hodges, Siam Real Estate (SRE) Tel: 076-324042 Email: [email protected] ; www.siamrealestate.com

 

Comments

Investment

Thailand Saw $1.7 billion Applications in Bio-Circular-Green (BCG) Investments in 2020, BOI Says

The BCG model, as defined by the Thai Government, encompasses industries that allow inclusive, sustainable growth while reducing waste, pollution and dependence on finite resources.

Avatar

Published

on

By

In the first nine months of 2020, local and international companies applied to invest as much as $1.7 billion in Thailand in more than 300 projects in the sectors listed as “BCG”, or Bio-Circular-Green economic activities focused on environmental protection and sustainability, according to data collected by the Thailand Board of Investment (BOI).

(more…)
Continue Reading

Economics

96% of Foreign Investors still confident in Thailand says BOI

The Board of Investment of Thailand’s (BOI) latest survey, shows most foreign investors, estimated at 96%, are still confident in the country, and are willing to bring forward their investments.

National News Bureau of Thailand

Published

on

BANGKOK (NNT) – With the COVID-10 pandemic causing significant disruption around the world including in Thailand, the Board of Investment of Thailand’s (BOI) latest survey, shows most foreign investors, estimated at 96%, are still confident in the country, and are willing to bring forward their investments.

(more…)
Continue Reading

Companies

Thai Firm to produce 200 million doses of Covid-19 vaccine

Thai Firm Siam Bioscience Joins with AstraZeneca to Make COVID-19 Vaccine for Southeast Asia and says it will produce 200 million doses of its anti-coronavirus vaccine in Thailand next year.

Olivier Languepin

Published

on

Thailand aims to vaccinate up to half of its population against Covid-19 next year according to the director of its National Vaccine Institute, Dr. Nakorn Premsri.

(more…)
Continue Reading
Advertisement

Latest

Most Viewed

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 13,413 other subscribers

Trending