The landscape of the Phuket property market during the pandemic has shifted significantly. Developers across the island have needed to change their approach and adopt new strategies to cope with declining tourist numbers and evolving consumer preferences. Those homebuilders able to keep up with changing trends have not only survived, but even found success.
“Developers who had crisis strategies and were very flexible benefited from the pandemic,” Oleg Golubev, Co-Founder and SMD at Serene Condo Phuket, explained. “One of the important changes has been a change in the minds of people around the world and a tolerance for buying products such as real estate online, which has led to a new wave of sales.”
Of course, the job is not done just yet. Changes that took place to the Phuket property market during the pandemic aren’t going anywhere which means developers must continue to adapt if they are to meet the needs of modern homebuyers.
“I believe that in 2023 the winners in the market will be companies that pay attention to digitalization, projects with a new modern vision aimed at health, quality of life and recreation, conceptual projects,” Oleg noted. “Customer focus and quality of service will also increase sales conversion and raise investment expectations.”
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Challenges found across the Phuket property market during the pandemic
Digitization is one way developers have been able to overcome challenges created by the COVID-19 pandemic. However, others remain. Oleg points out that these can vary depending on if a firm focuses on completed projects or is at the construction stage.
“The completed real estate market experienced high turbulence primarily due to the shortfall in expected rental income because the tourist rental market was dropped,” Oleg stated. “The capitalization and value of this property suffered primarily in projects that decided to suspend operations during this period and wait for the return of ‘pre-pandemic’ prices, as well as reduced management and staff costs.”
Apartments that closed down during the pandemic have lost their attractiveness and require significant investment to return to the rental market. This is a stark contrast to projects that managed to keep the lights on.
“Those who continued operating during this time benefited significantly: they set up the local rental market, we were able to digitize and optimize their processes, and most importantly, kept this property in excellent condition and working condition,” Oleg reported.
Developers focused on construction during the pandemic faced a different set of challenges which led to delays and other issues.
“For the real estate market at the construction stage, this time was very difficult, because it was very localized and largely dependent on the tourist flow. Also, due to the global increase in material prices, most companies have to change their models and strategies,” Oleg said. “The majority had to revise the deadlines for the completion of the projects, but even in non-pandemic times, each developer had the legal right to delay the deadlines specified in the contract.”
Ultimately, Oleg believes lessons learned about the Phuket property market during the pandemic will help everyone. Also important is the fact the island’s uniqueness and global appeal supports its long-term prospects.
“Phuket is quite difficult to compare with other provinces in Thailand, because, by the local laws, a unique natural ecosystem has been formed and it also has developed infrastructure, such as airports, shopping centers, entertainment and schools. Not only are tourists attracted to visit but also people who would like to live here permanently. These conditions allow real estate to retain its value and have long-term investment prospects,” he concluded.
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