A thinner smile than before

Post - Articles by David Wade, Tropical Homez

I am pleased to report I am back in the Land of Smiles – although it appears that not everyone is smiling. Before I left, the government had decided that a crackdown on companies that appeared to be held in foreign ownership seemed like a good idea.

Now they have chosen to take a stance against foreigners who use the 30-day tourist visa as an opportunity to stay in Thailand indefinitely.

If I was the kind of guy who suffered from paranoia I might think these two measures, implemented so close together, implied an anti-farang movement was gaining ground.

Fortunately I do not suffer those delusions. I prefer to believe that the present government is simply flexing its muscles in the lead up to the next elections. The measures are nothing new. The foreign ownership laws, though archaic, have always been in place and hopefully – with the arrival of a new government – they will be thoroughly overhauled. I am, after all, an optimist.

Tourist visas are exactly what they are stated to be – visas for tourists. Those of us who wish to stay here indefinitely have a number of means by which we can do that.

Why should we be so surprised about this latest enforcement of the law? Ask a Thai travelling to Europe or, for that matter, a member of the EU travelling to the States. Could a Thai fugitive accused of murdering his daughter hide so easily in the US for almost two years?

Anyway enough political debate, let’s take a refreshed look at the local property market. If you are a regular reader of this column you will know I have been in Europe for the best part of two months. Unlike most of Europe, I am pleased to report that Thailand, and Phuket in particular, is still booming.

What I have also noticed is an increase in enquiries from countries that one would normally count as a holiday destination in their own right. By that I mean Italy and Spain, not to mention Mexico and Brazil.

Additionally we are seeing an increasing number of enquiries from expats living in other parts of Thailand, especially Pattaya, who are considering a purchase in Phuket and seeking a permanent residence here.

The surprise for many of them is the cost of moving here. We had an enquiry last week from an expat based in mainland China seeking a three bedroom apartment for one million baht! I had to ask him if he was referring to a rental. Not surprisingly he did not reply.

I am a little concerned about a trend I first warned about several months ago. Some developers are increasing their prices out of line with usual upward movement during construction. Increased prices are going to happen during construction for a number of reasons – why else would anyone buy off-plan?

As the development gets closer to completion, and to reflect the increasing costs of construction during the course of the development, fair price rises are inevitable.

That is not my concern. I am more worried about developers raising prices out of pure optimism – and perhaps a little greed. I have seen this happen all over the world and it is disastrous for the market. Too much boom is almost certainly followed by bust, ask any market man, not that I see that happening here.

Most developers look to the long term and see Phuket as I do, as one of the future, if not already, most desirable upmarket destinations in the world.

There is another problem I see for some developers. There are already too many developments on Phuket that are not answering the demands of the buyer.

It is frustrating to take a sincere client around the island to look for a certain type of property only to find that property does not exist - in one particular case that meant a good western quality apartment close to any coast for less than ten million baht.

Six months ago I could have shown the client a number of developments around the island but now these are selling out and very little is coming along to take their place.

If you are a developer with just such a development and I have somehow missed you, please give me a call. To paraphrase the usual salesman’s hype: we have clients waiting!

By David Wade, Tropical Homes Real Estate
(2006-10-03 11:37:24)