Not so long ago, Phuket was something of a star destination when it came to property investment. Though things have cooled off a little, it is still very much a viable destination if you pick up the right kind of property. While some investors have started to ignore Phuket and look elsewhere, many have simply done so prematurely without taking the time to understand the opportunities that can still be found there.
The cost of living in Phuket has gone up, but the impact of this is not as great for would-be non-resident investors as it is for residents (though of course this does have a knock-on effect for those investors by impacting on demand for property). Investing in a well-located property close to such desirable amenities as the airport, schools and beaches is still relatively affordable. Prices are far lower than they are for comparable properties in similar beach-centric locations such as Australia.
Of course, this does rely on people wanting to buy those properties, and the demand is indeed there even if it’s not as great as it was when things were in full swing. What some investors mistook for a drying up of demand in Phuket was actually more of a market shift. Previously, the wealthy of Singapore and Hong Kong – especially their respective communities – were the target market of many developers and estate agents in Phuket. Plenty of investment bankers and the like were drawn to the opportunity to purchase a huge, premium property in a prime seafront location for much less than they would have paid elsewhere in Asia. While it’s true that demand from this formerly-key market segment has dropped considerably, agents have responded by casting a much wider net. This means that a good chunk of the demand that has been lost at the top end of the property market has been replaced by a new influx of buyers in the middle tiers.
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A further piece of positivity looms for investors in Phuket, with changes to the law being talked about which would make it easier for people to visit. This would be good news for investors in holiday properties who want to take a decent chunk of personal usage during the year, and will also help make the area more attractive to potential expat residents. Currently, receiving visits for any length of time from relatives outside Thailand is a hassle, and this can be offputting for potential foreign occupants of rental properties.
In all, there are still worthwhile property purchases to be had in Phuket. However, buying these properties as an owner-occupier is not to everyone’s taste, and this boils down to the cost of living. Middle-class standards of living come comparatively expensively and certain things that you would take for granted elsewhere, such as wine or a car, are quite expensive luxuries in Phuket. If this is something you are happy with, then Phuket can be a good place to buy a property for your own use. If you aren’t, then it is quite possible to pick up a purely investment property and find tenants who are.