Phuket property booming as fears of adverse effects of the tsunami and political coup subside
A booming tourism industry is helping one part of Thailand buck the downward trend in property prices.
Phuket, Thailand's biggest island in the Andaman Sea was devastated by the 2004 tsunami and it was feared that Thailand's military coup that ousted a democratically elected government just two years ago, could have led to an economic catastrophe.
There was concern that the thriving tourist industry would grind to a halt, bringing down with it the flourishing foreign-owned housing market.
But the latest figures show that more than 5 million tourists visited the island last year, an increase of 22.5%.
There was a 32% rise in Phuket vacation home transactions during the second half of 2007, according to CB Richard Ellis, Thailand's largest international property firm. During the same period, the value of these properties jumped by 56%.
Charlotte Filleul, a general manager at CB Richard Ellis, said that foreign investors were indeed nervous after the coup and most foreign buyers took a wait and see attitude.
Once it became clear that the new government didn't intend to take any measures that would adversely affect the tourist industry and the property market, signs of a slowdown disappeared. 'Today the market is strong. We have an ever increasing level of enquiries and buyers and we have a very positive outlook,' she said.
Factors contributing to the increase in prices include the fact that luxury properties, in particular, are still 50% cheaper than the Mediterranean or the Caribbean, management costs are very affordable, service is top quality and there is a rapidly growing super yacht and marine industry.
This positive outlook is backed up by a report from Jones Lang LaSalle which found that condo sales are robust, increasing by 25% in the last year and that interest is growing from beyond the traditional sources such as the US, UK and Scandinavia. Visitors from Russian and Middle Eastern countries are keen to invest.
One of the latest to do so is Formula 1 world champion Kimi Raikkonen who has bought a beachfront villa in Phuket. 'Having this kind of place, which is very exclusive, brand new and very high quality, is exactly what I'm looking for when I have a week or two off in winter. I can go and relax in a warm and sunny place,' he said.