2017 The Year Ahead For Phuket's Property Market

As we enter 2017 Thailand has just experienced a record number of tourist arrivals: with arrivals up 9% in 2016 to 32.6m, generating 1.6 trillion baht in revenue up 12.6%.

Occupancy rates for rental properties over the high season have been good especially for pool villas which are like gold dust right now! Although it must be said rates are slightly lower than previous years.

2016 was another tremulous year both here and abroad although many seem to hold a positive view for the year ahead.

Thailand, whilst going through a period of transition has once again proved itself to be extremely resilient with tourist arrivals at record highs, a stable currency and one of the best performing equity markets in 2016 up 20%. With elections due in early 2018 and continued infrastructure improvements planned the outlook is positive.

On the global outlook, 2017 will see a Trump presidency and most likely populist policies which will improve the American economy. The US stock market clearly thinks so and a healthy US economy will be good for the global economy.

In Europe we will see the UK enact article 50 and be the first nation to leave the Euro Zone, so far none of the doomsday predictions have come to fruition. There are some bright sparks in Europe with inflation there now increasing and the economies of the northern EU countries gaining strength.

An improvement in both US and EU economies would be a positive for the property market here.

Since a peak in 2013 - 14 resale prices in Phuket have come down, in some cases by as much as 20%. At some current levels buyers could not purchase land and build for the same cost as purchasing a property in the secondary / resale market here.

This, plus a reduction in the number of new developments in Phuket has led to an increase in resale transactions, whereas in previous years new developments where in highest demand.

Land prices still haven’t come down in Phuket and probably won’t as land owners tend to be willing to hold on longer for prices to recover rather than chase the market down.

However this trend cannot last forever, eventually the prices of resale properties will have to realign. As the global economy improves and people begin to see the stability of Thailand investors will return. With a current lack of new developments this will push up demand for resale property and thus prices.

As already mentioned rental occupancy has remained strong proving people cannot stay away from Thailand! When the global economy improves we would expect a pick-up in rental rates, also increasing tourist arrivals and less development will push up rental prices.

As the sayings go ‘The time to buy is when there's blood in the streets’ and ’ You pay a very high price……..for a cheery consensus’ Whilst there certainly isn’t bloody on the streets the market is slow but the outlook positive. By buying now you are likely to achieve attractive returns which will no doubt become more attractive in the coming years!!!

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