2005 Phuket condo value now double

The average price for a condominium in Phuket is now 101,203 baht per square metre, almost double the price per square metre in 2005.

That´s according to new Raimon Land publication Why Invest Phuket, which also acknowledges the continued boom of the Phuket property sector thanks to new hotel plans, acquisitions and upgrades going ahead despite recent economic and political uncertainties.

Why Invest Phuket is prepared by Raimon Land´s research team, providing the latest facts, figures and trends relating to Phuket.

The research team also found that global interest from the United Kingdom, North America, Scandanavia and Australia remained strong, while interest from Russia and China was emerging.

"Considering the international brands investing in Phuket´s hotel market and the diversity of nationalities buying Raimon Land developments, there is no doubt Phuket is set to experience long-term growth in the real estate sector," the report stated.

The report predicted solid yields and capital gains for the future for both Thais and foreigners who can purchase freehold condominiums in Phuket and leverage their investment throughout the construction period with attractive structures.

Currently, rental yields are ranging from six to ten percent per annum and buyers are enjoying sound increases, according to the report.

Allow me to qualify a bit this study, because I think some details were omitted:

1. From what I have observed as a real estate broker (www.phuketimmo.com), it is far riskier to purchase a condominium on plans than to purchase a villa. 
   Indeed, many developers, even well know brands, are bankrupt or have put their project on stand-by. I personaly know some people who settled a downpayment on a condominium that will never be be delivered. And nothing can be done about it. If purchasing a villa give some rights on the land, whch would allow the buyer to finish the constructio himslef if the developer was bankrupt; purchasing an apartment, even freehold, gives no rights on the land. In brief, if you buy an apartment locatedd on the third floor of a building that will never be built, you got NOTHING.
2. When one speak about value increase, one must implicitly in the case of a "freehold" purchase, which, again, is the rarest form of purchase. Indeed, in the case of a "leasehold" purchase, one should speak (at least theoriticaly) of depreciation.
   Let me explain: let's say you sign a 30-year lease contract on a condominium. In one year, there will only be 29 years left on the lease, which means that your right on the property will have been decreased by 3.33%.
3. THe Condominium Act allows developers to sell to foreigners only 49% of the marketable surface area of the project - which makes it difficult to complete for lack of Thais buyers for the remaining 51%. Besides, this law forbid to buy these condominiums for speculative purpose and for commercial exploitation, which means that one cannot buy these type of apartment with the sole purpose of renting them.
4. Real estate rental is subject to a 12.5% taxe (12.5% of the rental contract).
   Nobody pays it now; but, if one day the Thai Taxman wakes up...

Comments

[louisville lofts]

This is informative post,Thanks for sharing your views.I hope this 2009 will change the status of selling condos.

-Ella

[condo Philippines]

Good thought with this one. Very nice details.

Deirdre