Bargain hunters size up Phuket

PUBLISHED : Wednesday, 12 January, 2005, 12:00am
UPDATED : Wednesday, 12 January, 2005, 12:00am

Bargain hunters are being drawn to Phuket in Thailand, according to property consultants.

Andrew Pang Tze-on, executive director of international investment at Knight Frank, said: 'We have closed several transactions shortly after the [tsunami] tragedy and received inquiries from clients who are ready to pick up bargains.'

The tragedy at the end of last year has led to uncertainties in the property market, where several Hong Kong buyers have bought or were looking at properties.

Up to 70 per cent of properties in Phuket, ranging between US$250,000 and US$5 million each, were bought by Hong Kong people, mostly expats Mr Pang said.

But so far, Mr Pang said no client had informed the company they wanted to sell their properties.

Mr Pang said developers were offering modest discounts of about 5 per cent to lure buyers, but no drastic price reduction had been made.

In the past two weeks, property agents in Phuket have been trying to play down the negative impact on the property market, saying that almost none of Phuket's infrastructure has been closed down, while more than 80 per cent of its hotel rooms remained open for business as usual.

Mr Pang said: 'It may take about 12 months to get a clearer picture about the Phuket property market's outlook.

'Will holiday makers come back during the Lunar New Year and Easter? These answers will provide more evidence about the prospect of the market,' he said.

Because investment in the Phuket property market was closely related to tourism, rental income for luxury villas would definitely be affected if holidaymakers failed to return, he said.

'In this way, the investment atmosphere will also be undermined.'

Colliers International managing director Piers Brunner expected a short-term knee-jerk reaction to beachfront property in general.

'Now would be a good time for opportunistic buying, but I suspect that most owners will refuse to sell as the market will stop dead for a period. In the medium to long term, I do not expect property values to be affected,' he said.

On Friday, Colliers International will offer 50 two-bedroom deluxe villas in Hua Hin, 180 kilometres south of Bangkok, for sale - the first development to be put on the market since the tsunami, which claimed more than 150,000 lives in 13 Indian Ocean countries.

Buyers will receive a 6 per cent minimum rental per annum for two years. Prices for the villas start from US$260,000 each.