past 12-18 months and longer-term volatility looks to be flattening out.
That said, the fact that labor costs have continued to rise together with inflation has most major quantity
surveyors I spoke to believing that costs will remain at the current level for the remainder of the year.
Viewing the prospects of recovery remain dependent not only on Thailand's political and economic issues,
but the wider global picture.
With continued flat market conditions expected to continue into 2010, anticipated recovery has been
pushed back to 2011.
It's important to note that excellent long-term fundamentals are at play for Phuket: its improving international airlift and number of direct flights, high brand concentration and critical mass of brands.
Investment by the government is being pushed into a new international airport terminal and improvement
of the islands road network, while further development of demand generators - marinas, golf courses and
the service sector - have continued to grow which all bode well for luxury property.
At the same time, however, the luxury segment is hitting barriers to entry due to limited prime seafront
land. This will push new areas of development into Phang Nga and the bay. As a result of the current
recession, property launches have been constrained, which has allowed excess product from the supply
stream to be absorbed.
Property is, by nature, a cyclical business and once normal trading patterns return, there is the potential to
capture a good share of the upswing.
Phuket has continued to evolve from a sector mainly promoted by smaller independent developers into
something more in line with traditional norms and standards.
Areas to watch for growth are resales, rentals and high-end fractionals. Given the connection now between
hotel chains or managed products and shared ownership, I believe by next year we are going to see this
segment becoming a significant niche market.
While the broader market needs to move away from its reliance on foreign purchasers and increase
domestic sales, the luxury market looks set to keep on the same successful course for the time being.