Phuket Real Estate Should Prosper After Tsunami

Phuket, a popular tourist destination for its spectacular beaches featuring majestic rock formations rising from the sea, was one of the hardest-hit areas in Thailand in the wake of the devastating tsunami that has killed over 150,000 people and displaced millions more.  Around 5,000 died on Phuket and the nearby Phang Nga province.

But despite the tragedy, real estate workers in the area are looking towards the long-term and feel confident that Phuket will rebound to where it was before the catastrophic natural disaster.  According to Stephen O'Brien, managing director of the property agency Knight Frank Phuket, the tsunami tragedy will undoubtedly have an immediate impact on tourism and property sales in the area, which is expected to last around 12 months. 

However, a number of the real estate agency's clients are proceeding with property contracts in the due diligence stage, he continued.  O’Brien stated, “All buyers remain eager to settle.  I think most buyers see this as a one-off event, an act of God, and not a callous act of planned terrorism.”  He continued, “Some of the other developers I have spoken to immediately after the incident have also received actual sales and reservation deposits paid in the aftermath.  We will recover, but it will take time.”

O’Brien was quick to note that it is only his prediction, and that not everything may revert back to peachy keen.  He refers to the long-term rental market, where many people who were considering settling or retiring in Phuket may have second thoughts.  He still contends that destructive effects of the tsunami should short term and that swift recovery in the first quarter of 2006 is expected. 

Phuket is seen as a fairly resilient island and the beauty and tranquility that the area offers will always be an attraction for people.  Mr. O’Brien also draws confidence from historical recovery from previous disasters.  He is quick to point to Bali as a prime example.  For those who have forgot, the resort community of Bali (Indonesia) was a victim of a vicious terrorist attack where a bomb explosion took the lives of over 200 people back in October, 2002.  Since then, Bali has recovered quickly with tourism numbers back on the rise, hotel rates remain strong, and occupancies in high and luxury properties are in strong demand.   

In addition, Phuket has also prospered in times of regional distress.  Despite periodic travel warnings published by the American, British and Australian governments in the past three years about possible terrorist attacks in southern Thailand, tourism numbers continue to climb in Phuket.  During the 2003 SARS and Avian Flu outbreak, Phuket had increased tourism numbers.   

“What this proves is that despite Mother Nature's fury, communities rebuild and put the past behind them. I am not saying that it will take 20 to 40 years for Phuket to recover; far from it, there will always be demand for both affordable or luxury properties on the island,” O’Brien commented.