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Market Watch - Page 15:

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Aesthetics - Out With The New, In With The Old.

 

 

 

 

Whether you are property buyer, seller or developer, it IS Important to figure out where you stand in the market cycle. Developing markets tend to evolve from a Wild West stage set into a more sophisticated and gentrified, older and wiser urbanite.

Risk and reward ratios tend to move counter to these patterns, while at the same time key indicators such as rental yields and capital appreciation usually stabilize. Over the past six years, Phuket's demand has continually outpaced supply with capital appreciation averaging more than 20% per annum. In many cases, within premium locations, people buying off-plan have seen 50% to 100% returns after 24 to 36 months. Today, a scan of the teeming number of print directory property publications, newspaper classifieds and real estate agency websites shows that resale properties are becoming a market in themselves. For buyers who were once limited to new products, secondary sales are becoming a market force often displacing initial sales in developments.

For existing villa, condominium or apartment owners who are contemplating a property transaction - to either take profits or upgrade their investment the ground rules are evolving. Local industry commissions were once 3% as a rule of thumb, but now minimum rates of 4%-6% are being levied for individual properties. The trend for many large, Internationally-affiliated agencies and established local operations is to focus on the premium villa and lifestyle-investment, hotelbrand products and to discourage listing properties valued at less than 20 million baht. Welcome to the lottery that is the resale market.

Many lone sellers who want to attract interest in their properties are searching for the right formula to stand out from the crowd.

Often a sliding scale of commission is offered with benchmark

 

 

 

 

selling prices attached.

More recently, there has been an unsettling trend towards cash bonuses or luxury goods being offered to people within an agency who close a sale.

Current choices for individual sellers remain somewhat limited to listing properties with as many agencies as possible, placing classified ads in newspapers or putting up Signs at at the property. Along with selling the unit, obtaining legal advice once a prospective buyer is on board is the next step to closing the deal.

While sales and purchase agreements are not mandatory under the sales registration process at the Land Office, it is strongly advisable to create a well-drafted document covering all commercial details of the transaction. Clarity and detail are the order of the day in such agreements. While capital gains taxes are not applied in Thailand, a transaction tax remains commercially negotiated between the buyer and the seller.

As a starting point, wise sellers need to actively involve themselves in the process from the start: getting professional quality photographs of the property, doing their own research on market values of similar properties in order to price their units to sell, along with prudent listings to key agencies who specialize and cater to either their geographic location or their product.

More is often not merrier and selective targeting where only one qualified buyer is needed to complete a sale is much more effective. No doubt other distribution channels will open once the agencies start to understand the depth of secondary products and sellers will benefit. Looking at the current maturing conditions within Phuket's numerous property offerings, all things point to a growing buyer's market for the short to medium term.

 

 

 

   

Bill Bamett is Managing Director of C9 Hotelworks a Phuket hotel and residential consulting firm With more 20 years experience in the region, he has played an active role in some of the island biggest develovments.

       
       
Articles: 2009
 

Koh Samui's Luxury Market Emerges

 

The Next Big Thing In Ocean Front Real Estate

 

Predicting The Year Ahead - 2009

 

Phuket For Sale

 

Is Phuket Property Too Expensive

 

Is Phuket Ready For Fractional Ownership?

 

Koh Samui's Emerging Luxury Market Part 2

 

The Winds Of Change

 

Phuket Luxury Villa Market Update Part 1

 

 

       
 

Archived Articles: 2007 - 2008

 

Krabi - On The Edge Of A Boom

 

Khao Lak, Back To The Future

 

Rental Income - Investment Rent And Raves

 

US Financial Crisis - Living The Sub-Prime Life

 

Hotel Branded Realestate, Battle Of The Brands

 

Local Communities - Cables Gone Wild

 

Rental Property - Plus & Minus, Buying A Hotel Unit

 

Aesthetics - Bold Designs Keep Boredom At Bay

 

Agent Commission, The Low Down About Paying Up

 

US Financial Crisis - Clouds The Property Horizon

 

Phuket - The Next Big Property Trend 2007

 

Vietnam, Too Fast Too Soon

 

Pre-plan your purchase, and prevent future pain

 

How we should protect the property cash cow

 

Timeshare, High End Fractional Ownership Matures

 

Budget Hotel Brands Shake Up The Scene

 

Re-Inventing Patong

 

Bali, (property) Supply Surges Ahead

 

Property Developers - Number Crunching Pays Off

 

Phuket, Battle to preserve the beaches

 

Aesthetics - Designing For Success

 

Phuket Luxury Villa Market Update Feb 2009

 

Low Season - Cyclical Cynics

   
 

 

   
 
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