Despite global economic woes and Thailand's rather unstable domestic politics, resort destinations in Thailand such as Phuket and Samui are still a popular choice for second home investors and this year has seen a significant increase in the number of private villas and condominiums coming onto the market, either to buy or rent on the country's most popular islands.
Market analysts offer a number of reasons why property markets in resort areas have proved partly resilient in the face of an economic slowdown. Despite a significant drop in sales volumes, developers and private individuals have continued to build new homes, sound in the knowledge that with a global clientele to draw on, there will be no shortage of tourists to provide rental yields or new investors to drive capital appreciation. With finance now more freely available, as well as a number of fractional ownership schemes that mean lower market entry prices, the potential for rental yields attracts buyers in search of a more long term investment, particularly at the luxury end of the market.
On Phuket, the market has quickly started to diversify in order to match new types of investor expectations. Properties that offer a perceived low cost of entry have become a particular focus, often offered as part of a resort style development and therefore with plenty of potential for rental returns. Professional management companies like Phuket Villas and Homes help owners make the most of their property while not in residence, providing everything from maintenance to marketing and guest relations. Such value added service clearly gives international buyers added incentive and this is reflected in the island's continually expanding stock of completed properties. By the middle of this year, published reports showed Phuket had more than 3500 and private homes, as well as 3000 completed condominium units, a clear indication that the market may be shifting to more affordable accommodation with yields becoming as important as capital appreciation while investors wait for the global economy to recover. The improved outlook globally, and particularly in the Asia region is already helping the Phuket market recover however, and with plenty of confidence in the island's enduring appeal as a holiday destination, recapitalized growth, although still not yet at levels it was a few years ago, seems a sure sign of Phuket's resilience.
On Koh Samui, although the last two years have brought a serious drop in the number of residential sales, new villa developments continue to spring up around the island with more added in the first half of 2010 than in any previous year. Low rise condominiums are also attracting buyers in search of a more relaxed, tropical lifestyle complete with resort style facilities and services. As is the case on Phuket, the Samui market is increasingly driven by holiday rentals, but the boutique nature of the island means the market is also increasingly focussing on quality products as opposed to large scale development. The island is increasingly known for its enduring natural beauty and has become popular with high-end private investors, so many of the new developments are located in quieter parts of the island and designed to suit the natural environment.
On both of Thailand's most popular islands, the lure of the beach remains strong both for second home buyers and holiday rental clients. With new global economic trends developing and lifestyle choices taking an ever increasing role in people's financial decisions, the outlook for Thai resort property markets remains positive.