How will the ‘New Normal’ affect the Phuket real estate

How will the ‘New Normal’ affect the Phuket real estate sector in the years ahead?

Toourism is vitally important to Phuket, and the industry was naturally devastated when COVID-19 forced the closure of Thailand’s borders. At the time of writing, however, we are optimistic about prospects for a reinvigoration of Phuket’s tourism sector. The global rollout of vaccines is underway, which should soon allow more visitors to plan their holidays on the island. Given the strong correlation between tourism and property sales, the return of newly vaccinated tourists will almost certainly provide some wind in the sails of Phuket’s property sector. Are we expecting an immediate return to “normal” – a rapid reversion to the numbers of condo and home sales seen in the years leading up to the coronavirus crisis? Probably not. It is more likely that we will witness a discernible paradigm shift in the Phuket real estate market, forced upon us by the ‘new normal’. For real estate agencies on the island to stay ahead, they will need to adapt, with new business models and a change of focus. We have always been quite lucky in Phuket. The real estate market cycles here are far removed from the normal peaks and troughs found in other markets around the world. The dynamics of the Phuket property sector even differ from other cities in Thailand. For example, in Bangkok far more local Thais own condos as a percentage of all sales, than on Phuket’s west coast – the most vibrant area of the island. This means Phuket has always relied heavily on a thriving tourist industry to generate sales. Despite the grim picture painted above, the Phuket real estate market has by no means ground to a halt. Many buyers are searching for bargains right now – some quite successfully. Other buyers who have been sitting on the sidelines for years have finally decided to jump into the market after finding attractively priced property. But it is not just villas and condos that are enticing buyers. There are also many Phuket hotels for sale and this sector has picked up considerably over the last few months with a much larger choice of hotels on the market than in the months immediately preceding the coronavirus crisis. A number of private buyers (and even some major corporations) are seeking to capitalize on the current situation. Those who select wisely today will undoubtedly see their investment pay off handsomely in the years ahead. As with any major purchase, the old maxim still applies: caveat emptor – let the buyer beware. If the Thai authorities use this crisis as an opportunity to clamp down on the illegal hotel sector, it could have a significant impact on the future of both the boutique hotel sector and the low-end condominium market. A recent Aljazeera article echoed the sentiments of other mainstream media outlets in calling for a rethink of global tourism, and an end to what is being called ‘extractive tourism’. First coined by the academic Vijay Kolinjivadi, extractive tourism is when the financial benefit of mass tourism fails to compensate local communities for its intrinsically destructive nature. In other words, a growth in tourism offers clear benefits to a community, but Kolinjivadi’s argument is that there are also plenty of losers. For example, the best interests of local populations and the environment are frequently disregarded when developing an area for tourism, sacrificing ethics for profits. Thailand, especially Phuket, are sometimes named when this topic is broached. It has been wondrous to see leatherback turtles laying eggs on Kata Beach for the first time in decades. This was, of course, a consequence of no tourism, and those clever turtles knowing it was safe to visit the beach. But there has also been a human cost to the lockdown, and the people living here must be cared for too. Perhaps we will embark down a more eco-friendly path, with a fairer and happier equilibrium. Looking back three or four decades, tourism was very different in Thailand. But there was little or no evidence then that backpackers staying at bungalow resorts on far flung islands were hurting the local communities or the environment. Back then, instead of mass extractive tourism, the wealthy holiday makers took up residence for a few weeks or months in luxury villas or hotels in Phuket’s more idyllic locations, while backpackers sought out more adventurous and often isolated locations.

Who knows what the future holds as we gradually return to something resembling normality? Backpacking may live on in Thailand, and there is little doubt the luxury market too will survive and flourish. But cramming tens of thousands of cheap hotel rooms into what was once an area of scenic natural beauty may not be the way forward. After all, the imbalances referred to by academics like Kolinjivadi are already plain to see in some areas of Phuket.

The Phuket real estate market has changed in many ways, and these have been most noticeable over the last 5-10 years, as the number of tourists visiting the island grew exponentially. Many of those visitors instantly fall in love with the Land of Smiles and the Pearl of the Andaman Sea, and in the course of their 2-week vacation decided to buy the dream and invest here. Since February 2020, however, this segment of the market has pretty much disappeared, and the closure of many shopping malls has meant the shuttering of the property kiosks and real estate sales booths once frequented by would-be buyers. It is not unreasonable to suggest that we may yet see a ‘devolution’ of the Phuket property market. Quite possibly the market could revert back to how it was many years ago. There may be fewer projects and fewer buyers, with higher price points per sale, but it is difficult to predict exactly what the future holds. The last 25 years has presented Phuket with multiple financial crashes, epidemics and natural disasters. Phuket has an excellent track record for responding to and overcoming all of these crises, but the duration of the border closings and the depths of the economic crisis this time have been unprecedented. This means that the Phuket real estate market may add new dimensions in the years ahead, and reopening may require greater nuance than simply returning to business as usual.

by Thai Residential Phuket Property Guide This article is from the Thai Residential Phuket Property Guide. To download the 2019/2020 Guide visit ThaiResidential.com

Read online Thai Residential Co. Ltd.

82/37 Sam Pao Courtyard, Moo 4, Patak Rd., T. Rawai, Phuket 83130 : 09 4841 1918 thairesidential.com phuket@thairesidential.com

The human race comprises good and bad, but overall humans have proven time and time again they can’t be trusted with absolute freedom to do as they wish. there is daily evidence aplenty from selfish driving wreaking lives, bullying, toxic environmental practices through to human trafficking, modern slavery, genocidal and acts of gratuitous violence. People are provably irrational to varying degrees. Humans shouldn’t deceive themselves into thinking humanity has somehow reached a peak of ethical sophistication. this extends to how digitalised systems are being ethically developed and used. the Covid19 pandemic has brought out the best and worst in society, highlighted the abject failures and weaknesses of states, if operating on any form of democratic principles, empowered by citizens to provide a framework for a peaceful and ordered society with cultural preservation and development part of the objectives of that order. the same states, democratic, authoritarian, dictatorial and just downright nasty committing genocidal acts in the name of sovereignty or ‘the collective purpose’ against their own citizens, or persons who are considered somehow ‘different’ and therefore ‘unacceptable’, have ‘apparent’ authority to try and ‘regulate the internet’ (now better framed more widely as ‘regulate digital activity’). When each of us was born, states already possessed power which devolved to them from the people over centuries. the power is transferred as new politicians and elite rulers – private and public – take measures to ensure continuing control of the people, sometimes for noble endeavours, but often for self-interest and exploitation. Apparently, those same states are, to some extent, and by a fairly large segment of apathetic society, entrusted to be the people’s guardian of the digital age. Watching selfcongratulatory regional institutions purporting to aspire to a better future for all, fumble over decisions on which vaccine to purchase, how to license, produce and prioritise vaccination, and how to persuade vaccine sceptics to participate is not a confidence-inspiring event, nor a confirmation that world leaders are ready to properly regulate digitalism. our ethics are a hugely complex set of emotions and values, which are not always regulated by our brains and are obfuscated by the interaction between humans across spectrums of different cultures, religions, national proclivities, politics and biased beliefs. the philosophical study of ethics, which is neatly summarised in russ Shafer-Landau’s The Fundamentals of Ethics, reveals just how difficult it is to pinpoint a uniform set of rules that can align values across a spectrum of differing beliefs and backgrounds. exploring ethics can be revealing as to the embedded hypocrisy and incompetence of policy makers and, when applying the variances in ethics to the treatment of issues in a digital age, the issue is amplified as if a Google Sense Adword had resonated across the strongest algorithm invented. If we think back to the time when we were slowly replacing land line and super expensive international call charges with dial up modem internet cards to send messages from internet cafés whilst on the move, the type of regulation that could have been envisaged by the general population would have been fairly basic – regulating internet usage fees; the competitiveness of the equipment; universal access rights and the division between ‘public and private internet’. If you read historical analysis of regulation in the 1990s, for example in the uS, the understanding of just how extensive digitalism would be in life was understated and way off the mark compared with what has occurred. the visionaries have made their fortunes and changed the way the world communicates, and the general populous have followed the path laid out for them. Now, digitalism presents a series of challenges which lethargic, inefficient and self-interested states may find it increasingly difficult to keep up with. A critical issue I see, which will continue to hinder a coherent and balanced policy for a global phenomenon which invisibly crosses borders, is the often incoherent and confused differences between understanding of what ethics means, and the acceptance that even with different ethical beliefs, minimum protections against harm may still be implemented.

Digital ethics & real ethics –

the same thing?

ra2 studio / sHuttErstoCK.CoM

As a fan of common sense and logic tests, and of judges who write reasoned opinions by reference to real world experience, I also strongly feel that regulation should be reflective of and adaptable to modernising societies. By analogous application, we can see that some behaviours and acts carried out digitally or virtually should not necessarily be differentiated in ethical analysis from physical interaction. there are plenty of grey areas, and it is questionable if irrational exploiting states and irrational citizens have any near-to-perfect solutions to these issues: For example: • Bullying and harassment in person is considered ethically wrong so to what extent should the concept be changed when (a) this happens digitally and/or (b) the wrongful acts are carried out by a state against its citizens? Standing in a group and throwing stones and kicking dirt into somebody’s face is not socially acceptable in 2021, but what about abuse in social media comment forums? • Sex education is often tightly scrutinised for content and timing of delivery in institutional educations. It should arguably mirror a particular society’s norms, but access to one niche element of sex – pornography – is global and the content is designed to apply to user preference, ignoring societal ethical norms in the name of freedom.