Property Updates
PROPERTY UPDATES Published 03 JAN 09 Phuket Gazette
Phuket versus the world
The world has just witnessed one of the greatest reversals in its economic history. While the past has dealt s a global depression, two world wars & stock market crashes, to name but a few, none of these have affected every country & every asset class in the way this most recent crisis has.
For its part Thailand has experienced its own share of problems of late; a cop, an election, mob rule and airport closures, again, to name but a few.
The immediate impact on the Phuket economy is proving severe, much like the impact of the Asian crisis, the 2004 tsunami and the 2006 cop. Throughout these periods real estate managed to hold its vale and after a brief hiatus prices continued to move steadily upward. The underlying strength in the market has a lot to do with Phuket being essentially a cash market.
The recent global turndown of global markets has certainly affected a lot of people's investment strategies and impacted plans for retirement. We have seen some buyers withdrawing from purchases, leaving an opportunity for others to by-in at lower price levels. Timing is now more crucial than ever and anyone buying off-plan will be in a good position with the current market.
Since the 2nd quater of 2008, currencies such as the New Zealand & Australian dollar have witnessed an extreme drop in vale. Particularly against the US, birth place of the financial crisis and world economic meltdown and the country with the largest deficit, is now printing new money as fast as it can. You may ask yourself is this really happening?
We may see the fallen currencies rise against the dollar, restoring some semblance of normality, or it may be a case of the US leading s into this mess, and the market leading us out. Recent chart analysis points to this only being a short term rally.
The world's wealth is currently migrating towards China, India, Russia and Asia – and these countries are likely to be the economies that recover most rapidly from the crisis.
Conventional wisdom would suggest that the recent political and economic environment would have triggered depreciation in the Baht, although recently it has continued to rise. Logic dictates that once the political situation improves in Thailand, so will the economy and strength of the Baht. While the stock market currently remains at a multi-year low, it will not stay around the same levels once the present political problems are resolved.
Anybody currently purchasing property in Thailand is in a good position. The underlying vale and investment return remain strong as Phuket continues to move forward as Asia's premier holiday and retirement destination.
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