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SAMUI'S LUXURY PROPERTY
MARKET FACES CHALLENGING TIMES
(Immediate Release — Phuket, 3rd March
2009) —
Global and domestic
crises are worsening and moving through the first quarter of 2009
the market outlook forecasts an extremely challenging property
market in Samui and other key resort areas in Thailand, according to
C9 Hotelworks latest Samui Luxury Villa Market Report.
"The evolving tourism sectors and broadening access to Samui
introduce a new set of potential investors to the islands real
estate market, and with changes to how the island is governed it may
well alleviate concerns about necessary infrastructure development
and other local issues," said Bill Barnett, Managing Director of C9
Hotelworks.
Thailand is still suffering from the recent
political events and a national agenda which focused more on
domestic affairs whilst other regional economies were gearing up to
address the impact of a global downturn. As a positive though, the
Thai baht depreciated approximately 15% over the past 12 months
versus major currencies and is forecasted to devalue another 5% in
2009, thus creating lower acquisition prices for offshore buyers.
The Thai luxury property market is operating at a severe
handicap versus more developed markets, due to the fact that in a
segment dominated by overseas investors there have been no
significant government stimulus packages or reforms addressing
foreign ownership of land and availability of mortgages to
foreigners.
Bill Barnett added: "With the increase of luxury
branded developments entering the market, Samui's reputation as a
luxury destination has been cemented. However, with the capital
markets crunched and available debt declining, the development
pipeline looks to remain static into 2010; which long term will
swing supply demand into a more favorable ratio, but short term will
put existing retail pricing at risk."
The Samui luxury
property segment, however, continues to see transactions even though
at reduced levels with buyers minimising development risk by
preferring existing product to off plan units. As the economic
crises continues to deepen the gap between expectations on price are
becoming more evident, though property values are holding due to
limited leveraging by investors.
Challenging times lie ahead
for investors, developers and the government as infrastructure and
development will need to grow in parallel to secure Samui's position
on the luxury resort destination map.
Important links:
Map of
Samui's new luxury villa projects
Samui
Luxury Villa Market Report
Photo of
C9 Hotelworks Managing Director, Bill Barnett
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