Happy Friday and Happy February from Phuket Property Watch! Maybe it’s the excitement of the new year, maybe it’s realtors trying to instill confidence, maybe it’s even a trend. What we’re talking about today are the continued positive outlooks for Thailand property markets, with some interesting stats to help back them up.
First up we have a Nation article featuring some stark insights from Plus Property Co., Ltd.‘s Managing Director Anukul Ratpitaksanti. Starting with Bangkok, he describes favorable growth across the board, but significantly favoring demand over supply. After analysing data from 2015 to 2018, Plus offers that centrally located Chit Lom and Phloen Chit have seen a 20% increase in supply trying to keep up with an 80% increase in demand over the time period. In comparison, Sukhumvit saw 30% supply growth and 50% demand growth while Phya Thai-Ratchathewi exploded with 240% more supply and 570% more demand in those four years. Because the rise in demand so outstrips that of supply, it’s explained, resale units have become important investments, offering solid 4-5% yearly returns in Bangkok especially close to city centre, let alone being move-in ready and tangible, visitable homes. Mr. Ratpitaksanti further expects resale units to attract a keen eye in 2019 due to BoT’s loan measures due in April. Plus is additionally noting interest in popular tourist and vacation spots throughout Thailand which are also seeing massive infrastructure improvements. Examples given are Hua Hin, with incoming motorway and high-speed rail from Bangkok, and Phuket, with its own high-speed rail plus Phuket Smart City and the 3rd phase expansion of Phuket Airport. As the recurring theme goes, proximity to transit hubs provides for amply-priced luxury condominiums followed oft by business development and thereby small village centres.
If our business-types are wondering just how this set of expectations is to be met in the real world, Hotel News Resource gives us a clue with the announcement of Red Planet Japan (RPJ) taking over operations of six hotel companies across Thailand. The out-to-win subsidiary of Red Planet Hotels Ltd. is banking on increased interest in Japanese culture and travel to and fro Japan from SE Asia, and after acquiring two Manila projects last year is setting an ambitious goal by planning to complete takeover of operations in Thailand by end of Q1 2019. In addition to three hotels in Bangkok, one each more in Phuket, Pattaya and Hat Yai, RPJ also looks to open two new properties: Red Planet Sapporo Susukino Central in October 2019 and Red Planet Hiroshima Nagarekawa in summer 2020. Chairman Simon Gerovich explains the twofold benefit of not just gains due to well-managed business efficiencies but also the confidence that such operational expertise can provide to the market, which reveals itself through management contracts, franchising opportunities and other types of joint ventures. It’s hard to argue with their claims as their latest venture boasts it may invest as much as JPY 22 billion in six projects through 2020.
Finally we have our homegrown local Phuket news from The Thaiger for you, a fitting wrap-up piece (and unintentional maths word problem) for the day about how Thailand can expect more than 40 million tourist arrivals in 2019. After seeing 38.27 million in 2018, we would need an increase of nearly 2 million tourists this year, or nearly 5% more tourists than last year. Considering 2018 saw 7.5% more visitors to the kingdom than 2017 did, it’s not quite a stretch of the imagination for 2019 to be the year of the big four-oh. In fact the Ministry of Tourism is all-in on another 7.5% increase this year as well, to the estimated tune of 41.1 million arrivals spending a whopping THB 2.2 trillion; recently tourist spending makes up 12% of Thailand’s overall GDP. This again bodes well for the aforementioned resale market, as rent paid by some of these tourists and expats (ever on the search for a job in Thailand) will fuel the powerful yields which all but guarantee the stability of the markets’ foundations.
As good as the news is (and keeping in mind it is Friday), Phuket Property Watch politely reminds you to keep your head down and your feet moving if you want to be a part of those returns. Local players like FazWaz Property Group have been, and have requisitely seen a 20%+ boost in organic traffic between just December 2018 and January 2019. The grinds we take on in this wonderful world of real estate in Thailand collectively help to benefit us all in turn, so let’s make this February one to remember.