The significant increase of tourists to the island, some of whom become expats, has driven real estate prices up, according to statistics unveiled at a real estate conference led by financial and property experts at the Royal Phuket City Hotel.

Above: From left, Varin Sachdev, Wannaprapha Suksomboon, Anukoon Ratpithaksanti, and Srinarin Paopongpaiboon.

Dozens of Phuket investors attended the discussion, dubbed the “Economy and Investment Trends for the Tourism Industry”, a collaboration between Siam Commercial Bank, the Tourism Authority of Thailand (TAT) and Plus Property Co.

A 27-per-cent increase in flights to Phuket during the high season, coupled with the 7-per-cent growth in the local real estate market over the past three years have helped Phuket families enjoy a 3 per cent increase in annual income.

The influx of tourists who become expats, along with the inclusion of residents from other parts of Thailand, have contributed to an annual 3-per-cent increase in the population of Phuket, according to the TAT.

Above: The significant increase of tourists to the island, some of whom become expats, has driven real estate prices up.

“There is a trend among tourists who come to Phuket after searching through Google and Agoda. Instead of staying in hotels, they rent an apartment or house. Most of them want to live in local Thai style,” said Wannaprapha Suksomboon, Phuket’s Deputy TAT Director.

Ms Wannaprapha noted that condominiums are the most popular in Kathu District, while villas rent well in Thalang District.

Property investment, especially in Phuket, has generally given higher returns than gold or government bonds, according to Srinarin Paopongpaiboon, a Senior Analyst at Siam Commercial Bank’s Economics and Business Research Centre.

Above: Instead of staying in hotels, tourist rent an apartment or house.

“If you buy a condominium with the aim of selling it, you will get 10 per cent profit after a year or, if you rent out your condo, you will get an income of 6-8 per cent a year,” she said.

Ms Srinarin also noted three important factors to be borne in mind when buying property: “Study carefully which development offers the best payment terms; Check the location – does it offer good potential for return on investment? And check the quality of the product itself.”

Land prices have increased dramatically as well. In the case of Kathu, land is now selling at B50,000 to B60,000 a square wa, a big change from B27,000 a square wa just a few years ago, according to figures by Plus Property Co.

“If you have the finances, you should grab the opportunity now to grow your money. Of course, every investment has risk attached and you should always set aside some money for emergencies,” said Ms Srinarin.

Above:  More and more tourist come to Phuket.

“But now is the time to invest in property, because some tourists are renting condominiums or houses instead of staying in hotels.”

One of the audience asked Ms Wannaprapha how he could convince his partners abroad to invest in Thailand in light of the problems of tuk tuk mobs, bad water, uncollected garbage, poor electricity supply, “Mafia” activities and poor infrastructure in Phuket.

She explained that Phuket suffers from a shortage of budget from the central government because only 362,000 of Phuket’s estimated population of one million are registered as living in the province, and it is that number – 362,000 – on which government budgets are based.

“We get limited budgets. That is why we do not have enough money to take care of these problems. We also have a lot of government rules to follow.

“I wish the island could be independent and we could work in our own way without having to depend on the central government for funding.”

She added, “In Thailand we usually get things done through personal relationships, unlike in many First World countries. We definitely need a path to reform.”

Source: The Phuket News