In a market that is, shall we say, depressed, one sector of the real estate industry is moving. Slowly but surely, it’s moving. That is resales, in particular resales of a certain age, between 5-15 year old properties. And there are several reasons for this and we’ll circle back round to those a little later.
Another sector of the market that shows signs of movement is the small apartments, 28-35sqm units. This is mainly due to developers offloading the less appealing units sometimes with a guaranteed rental return.
These units tend to be lacking in view, natural light, or have some sort of drawback that other units don’t. So whatever the market conditions, these units would be harder to sell. Some developers are taking the bull by the horns and dumping the price on these units just to off-load them and create some sort of cash flow. All in all, a good plan.
Back to the resales. So why are they proving good value for money right now? Well, these older apartments are usually fairly big, for a 2-bed unit the standard (back in the day) was anywhere between 100sqm – 140 sqm. That’s big compared to today’s shoeboxes of 50 -70 sqm. Also, the currency exchange was much stronger 10+years ago. This means that owners that are desperate to off-load and drop their selling price, but still make a tidy profit on the repatriated currency gain. In the immortal words of Del Boy Trotter; “Everyone’s a win!”
These larger apartments and villas tend to be in better locations. All those years ago land closer to the beach was cheaper and more plentiful. Nowadays, developers are having to move their projects further inland as the price of land rockets the closer you get to the coastline.
The one comment I hear all the time is; “I want something new, nothing old.” Well, how old is old, 3 years, 5 years 10 years plus? In our own countries, properties of 30, 50, 100 years plus is sold daily, why should Phuket be any different? Yes, older property may not be decorated to your liking, but this goes for any other property regardless of age.
Clients sometimes think that older properties are going to fall down and crumble. Not usually the case, and if you are concerned about the properties you are being shown you are working with the wrong agent, they shouldn’t be listing the property in the first place. As it happens, I would be more concerned about some of the newer builds.
Finally, villas. Yes, I will concede here, some villas can look a little dated, and if neglected for any serious length of time, they can look tired and in need of some TLC.
This renovation cost should be taken into consideration when a marketing price is established. On the upside, these types of villas are usually in good locations and larger in land plot size. So there you have it, a very brief “What’s Hot” and “What’s Not” is real estate right now on Phuket.
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