Property Market Evolving for Sales
The past decade has witnessed a revolution in the Phuket property industry.
Favorable supply and demand conditions had developers and estate agents shouting "buy, Buy, Buy" from the top of the island's coconut trees, like boisterous Wall Street traders.
These days, the market landscape has shifted and now the chorus of chatter is more likely to include the word "sell", or more precisely, "resell."
Sharing a coffee or even an email with agents, one common theme is often discussed: The deluge of last-minute listings for secondary sales of villas, apartments and condos.
High season undoubtedly brings existing owners to the island and stimulates the listings machine for property resales, however the current phenomenon is a veritable snowstorm of activity.
In many cases, personal financial stress overseas is driving owners to dispose of second properties.
There is also the added problem of homes that were sold off-plan in the boom years, pre-2008, that now, after inevitable construction delays, have lost their appeal for buyers.
Property seekers from Eastern Europe continue to make their presence felt, roaming the coast-line and paying top baht for premium properties.
Eastern Europeans are not alone, buyers from all over the world are looking for a plot.
Many property owners are now dipping their toes into the real estate market, expecting to find quick money.
A glance at local property listings on the internet finds a striking amount of the "same-sames". Owners to do the rounds, list with every available agent possible, then sit back and hope for best.
For potential buyers, the ensuing confusion and endless days required to sift through the sand to find buried treasure could drive the hardiest of investors to the brink of insanity.
One significant development in the property sector in Western markets has been the evolution of multiple listing services (MLS).
Developed in the US and now commonly used in Europe, the MLS system often works on a membership basis. Brokers access and then share property listings on a common platform.
For buyers, it's an easy system to negotiate as they don't need to spend days searching through a bottomless pit of non-integrated internet sites.
This brings up another red herring in terms of acceptable local practices.
I'm of course referring to the "two-broker system" most commonly used in the West.
Instead of relying on an avalanche of doe-eyed first time buyers to walk through the door and purchase property off-plan, the two-broker system is geared for the resale market – Phuket's primary breadwinner at the moment.
In this structure, a total commission of six per cent is applied, and then split down the middle between a broker representing the seller and another representing the other buyer.
Granted, the duties of an agent or broker in most cases require licensed staff and more participation throughout the transaction process than is seen here.
Phuket remains a developing market and it's fair to say there is room to reach international standards. The industry is composed mainly of property sales people and a more sophisticated set of brokers and agents.
This is not a criticism, it's acknowledging the challenges ahead to grow the real estate sector. In the past, sets of mainly Thai agents and foreign brokers gathered into working groups to improve standards and co-operation.
Unfortunately these have largely fallen by the wayside in recent times. As we see a dynamic shift in property to secondary sales it might be a good time for local firms to again look at combining resources, sharing information and committing to further the cause of a key industry in Phuket.