Will the Phuket Property Market recovers after COVID-19?
Is it uncertain times for the Phuket property market? There has been speculation and concern as to what impact COVID-19 will have on Phuket's property market in 2020. Is the industry in danger of collapsing?
Economies around the world are struggling; this is a fact; however, Phuket maintains a resilience that we have seen time and time again. Each time there has been a crisis, and the forecast looks gloomy, the Phuket market bounces back stronger than ever. With a proven track record, we can see just how quickly the property market has recovered after crisis periods since 2008. In our opinion, this will continue to grow and develop over the next decade. With an increasing level of investment from sizeable international property developers, we see big players in real estate development, for example, Singaporean developers who are responsible for the famous international Laguna projects, who invest in Phuket.
We understand that Phuket has some serious potential for outside investors, as projects of such magnitude require large sums of investment. This in itself should give potential buyers some reassurance that this island is still very much a hotspot where you can get more bang for your buck than in other countries. Being one of the wealthiest provinces in Thailand, Phuket has always been an attractive location for both small and large scale investors. With a favorable exchange rate against the U.S dollar, we can attribute much of the success of the market to that which has greatly contributed to an increased level of investment over the years. The Thai baht has held its weight against the U.S Dollar for quite some time. The exchange allows buyers to make money on the exchange rate as well as through other means such as rental returns and capital gains.
Very few taxes are imposed during the purchasing of property. This is the same case with regards to earning rental yields and had a significant positive impact on the property market in times of economic uncertainty. This is a real advantage for those wanting to invest.
In our experience COVID-19 will not negatively impact the tourist market permanently, this will be more short-term. People will still choose to spend their holidays here and enjoy the delights of our beautiful island. For many a trip to Phuket at least once a year is essential to their wellbeing, particularly those who are from big polluted cities, cold climates, and for those who have demanding careers. Being an affordable family holiday destination also keeps tourism steady. We can't see this changing anytime soon. For this reason, we are inclined to see more and more families choosing to purchase villas or serviced condominiums as a second home, to use while on holiday, with the aim of renting out their properties as a form of passive income.
Therefore opportunity in the future to earn healthy rental returns will persist. What we are seeing is developers offering extremely competitive prices, making it even easier to pick up a good deal right now. Anybody will smaller budgets wanting to get their money out of their country is able to enter the market here for as little as 62,000 $ (USD). Developers have also noticed an increase in the amount of online traffic received, with many buyers abroad purchasing units without having ever been to Phuket.