The Market Impact of September 11th
John from Hong Kong, who had been considering a second home in
Phuket asked me "What effects have the events of September 11th
had on the property market in Phuket, and what long term impact do you
think the market can expect?"
It's fairly easy for me to report on my companies experience of what has happened over the last month, but somewhat harder and really too early, for me to predict what may happen in the future, at least until it becomes clearer what the full outcome of the War on Terrorism will mean to the world at large.
In the immediate aftermath of the destruction of the World Trade Centre, perhaps not unsurprisingly, we noticed a significant drop off in the number of new property inquiries both over our web site and from walk in customers (though that it also consistent with the lousy weather that we had in the last half of September) - but by early October both local and internet inquiries have come right back to normal and are actually a little better than usual for the time of year.
As for the long term outcome for the market for Phuket resort residences, I will be bold and make a stab at it and say, that assuming there is not (and to a certain extend even if there is) a massive escalation of the current scope of the War on Terrorism, I do not see that there will be a negative impact on the second home property market in Phuket and there may well be a positive outcome.
Real estate purchases, (unlike tourism which is more of a short term impulse driven decision process - hoteliers are currently reporting a few cancellations) are generally part of a longer term financial strategy or lifestyle decision. While the world economy has clearly been slowing for almost a year now, purchases in Phuket real estate has continued to rise, suggesting that property purchase in Phuket is more of a long term life style decision, than the frivolous spending of gains from a bubble economy - indeed there is a lot that supports the argument, that people are now making investments in Phuket now, precisely because the financial markets are falling and their expectations of returns on capital are so much lower than the dot com bubble days.
As a predominantly Buddhist country, Thailand has also taken a very balanced approach with respect to the War or Terrorism and is therefore one of the counties least likely to get drawn into any protracted dispute. Consequently, Phuket is beginning to take on the status of a safe haven for those who are concerned by terrorist threats.
While there are clearly some short term uncertainties, all in all I believe that the outlook is still positive for property in Phuket.