Property market in Phuket sees little fallout

02 September 2008

Despite the closure of Phuket International Airport for two days, real estate professionals on the island claim their business is unlikely to be affected because foreign buyers understand Thailand’s political situation.

Martin Phillips, based in Phuket as managing director of the upmarket residential brokerage Engel & Volkers (Thailand) Co, said no clients had postponed purchases despite the situation being international front-page news.

He noted Thailand was not alone in facing political issues and that these situations often happened in Europe.

"This is not unusual and these are usually short-term disruptions, much the same as the temporary closure of Phuket," he said.

Aliwassa Pathnadabutr, managing director of the international property agency CB Richard Ellis Thailand, had a similar view.

"We do not think the political situation will affect property purchases in Phuket as most buyers in Phuket are foreigners who are familiar with Phuket and understand Thailand quite well. We believe the demand for Phuket properties will not drop due to this," she said.

But Mr Phillips added that ongoing political uncertainty in Thailand was not helpful to business generally or to the resort property market, which would benefit from an environment more conducive to investor confidence.

"While this is a domestic issue, and has so far remained quite peaceful, it unfortunately will not be viewed positively across many sectors, not just resort property," he said.

Patima Jeerapaet, managing director of the consulting firm Colliers International Thailand, said Thailand needed to correct the country’s image immediately to reassure foreigners about the hospitality Thai people usually offer to foreign visitors.

He said foreign investors were still confident about the fundamentals of the Thai economy, which were much better than those of its neighbours like Vietnam, Cambodia and Burma.

He admitted that some foreign investors might delay purchases, but said investors who understand the theory of high-risk, high-return were still looking to invest in Thailand.

Source: Thailand Real Estate Magazine