Phuket Residence – Paradise Found
Thailand, a country spoken of with high appraisals for its majestic beaches, hospitable mannerisms and renowned temples has long since been appealing for visitors of all nationalities. Welcoming over 35 million tourists per year, Thailand experiences economic expansion caused by the revenue generated from tourist spending, which is taken a step further when these tourists choose to purchase holiday homes, either for personal or investment purposes – tremendously impacting the property market in Thailand.
Property investment in Thailand is seen as an economic investment by affluent foreigners owing to the competitive price values offered by Thailand that other nations simply cannot aspire to match. Affordability combined with high returns has investors from China, Hong Kong, UK, France and other countries opting to slide past other Asian nations in order to settle for investment in Thailand.
The percentage of property investors steep higher year after year due to a variety of influences:
1. Mounting numbers of Tourist Visitation:
The Land of Smiles renowned for its white sand beaches and courteous local hospitality continues to shine as the number of foreign tourists streaming into the country has increased from 32 million, as recorded in 2016 to 35 million – up a considerable 10%, as recorded in February 2018.
Owing to its tropical and inviting weather, Thailand has offers a surfeit of adventurous and leisurely activities for tourists to engage in, such as, jet skiing, parasailing, yachting, kayaking and canoeing. Additionally, Thailand has also become one of the top golfing destinations in Asia, boasting over 200 world class golf courses. As known by all tourists, shopping in Thailand is a reverent experience, with impressive options available for anyone and everyone, spanning in an entire range from vibrant flea markets to high end luxurious fashion.
According to the Ministry of Tourism and Sports, the revenue generated from tourist visitation in just the first month of 2018 surged up to a whopping 200 Billion THB, increasing by 11.59% when compared to the first month of 2017. The totality of foreign tourists generating this revenue was 3.54 million where 2.14 million were from Asia, 900,000 from Europe and 811,000 from the United States, Oceania, Middle East and Africa.
Escalating number of tourist visitation is generating sizeable revenue for the country causing a stir in economic opportunity that is reflected in the real estate market, with more investors seeking property in Thailand to delight in capital gains and rental yields brought forth by the tourists.
2. Sustainability of Returns:
The repercussions of high tourist visitation is a flourishing luxury property market where property prices experience speedy inclines, with investors from across the globe looking to purchase luxury properties in resort cities such as Koh Samui and Krabi where property prices appreciate between 10 – 15% – substantially higher than appreciation rates in the capital city Bangkok, where the market experiences upward trajectories of approximately 3-5% annually.
The finest property developers – such as KASA Development, have taken to giving rental guarantees for a certain number of years upon property purchase, promising investors yields of 6- 8% , with possibilities of higher return rates shall the market project to grow further.
Furthermore, luxury furniture packages and management agreements that are offered alongside the property are added sources of value ensuring even higher revenues for the investor shall they wish to sell the property.
3. Universal Accessibility :
Favourably located in the heart of the Asia-Pacific region, Thailand has long since been accessible by flight from all countries across the globe.
Thailand’s International Airport – Suvarnabhumbi Airport operates an estimated number of 80 flights per hour incoming from all over the world. Foreign visitors are aware of the easy accessibility of the country, both when travelling into the country as well as when travelling within the country. The warm hospitality of the locals along with the systematic transportation system linking the entire grounds makes it easy for travellers to explore every corner of Thailand.
Similar to the popular island of Phuket, other resort cities of comparable beauty have emerged as top destinations for travel and luxury property investment. This progression is attributed to the emergence of International airports providing direct air-links from these cities to financial hubs such as Singapore, China and Hong Kong.
Taking Koh Samui as a case in point: the island’s accessibility is soon to surpass that of Phuket islands’, as, in the next two years, it is to become the second international hub of Thailand after Bangkok’s Suvarnabhumi Airport.
Bangkok Airways, the country’s largest privately owned carrier, would launch more direct international flights for medium-haul routes through the resort airport. Additional to the existing scheduled flights to and from Hong Kong and Singapore, plans to offer direct flights from Samui to Dubai, Shanghai, Bali and Kuala Lumpur are currently underway.
Also in the pipeline are Rail System Development Plans being carried out in order to connect Thailand to its neighbouring countries. Pronounced by the Tourism Authority of Thailand,“The Asian Highway is growing rapidly and will provide extensive road connectivity beyond the neighbouring countries to both China and India. Rail travel is going to be the next generation of land-transport infrastructure to emerge, with high-speed links now in the design and planning stage.”
Along with the Rail systems, the Tourism Authority of Thailand has also taken to addressing the country’s inadequate disabled-friendly infrastructure by promoting a concept called “Tourism for all”, whose fundamental focus is to improve infrastructure and facilities available at popular tourist destinations to ensure accessible tourism for people with disabilities.
These factors along with the country’s advantageous geographical location at the heart of the Asia-Pacific region is assurance that visitor arrivals will continually escalate, with no signs of deceleration in the foreseeable future.
4. Retirement Haven:
Thailand has gained famed as a leading destination for expat settlement according to the HSBC’s Expat Explorers Summary 2014 – where the country was ranked No.1 in Asia and No. 7 in the world as the most preferable destination for expats retirees.
There are diverse motives supporting the expats decision in making Thailand the most fitting destination to retire; the predominant one being the luxurious quality of life offered in inexpensive and economical prices that other countries cannot aspire to beat.
Affordability becomes a critical aspect as Healthcare costs are undeniably important when considering senior citizens. Thailand, known as the hub for medical tourism, offers international standards of healthcare services and facilities at precisely half the cost of comparable offerings in other countries.
As stated by Mr.Robert McMillen, Chairman and CEO of MAC Capital Advisors – “Thailand’s government has recognised that the warm culture of its people, tropical environment, relatively low living costs, access to world-class healthcare and ease of travel, make the country an attractive destination for international retirees”.
Thailand’s government has in fact been accommodating to international retirees by making retirement visas fairly easy to obtain. Additionally, longer term leases on houses and properties have also been considered in order for senior citizens to own their houses for a considerably longer period. Thailand’s ranking as the fifth best in regards to affordability of life alongside stated aspects, have had significant impact on the property market with numerous expat retirees purchasing homes in this welcoming country, bringing about a higher property demand and in consequence, driving property values higher year after year.
5. Teflon Thailand:
As does every country, Thailand has experienced its fair share of political unrest. However, over the years, the nation has portrayed something of an enigma for investors as despite its political turmoil, the real estate markets have proved to be exceptionally resilient.
Consistent and even increasing property values stimulated a growth in the property market sector, earning the country its nickname “Teflon Thailand”, as attributed to its ability to brush aside its defeats.
The nations magnificent natural beauty, world class hospitality, incredible cuisine and long-established label as one of the world’s most appealing places to live has enabled the real estate market to ride out storms that might have floored other countries.Housing Index prices serve as verification, displaying an increase of over 5% from July 2017 to May 2018.