Bart’s Welcome
Welcome to this edition of the July-August newsletter.
Phuket may be down at the moment but is far from out. The so called ‘green shoots’ are starting to appear from the gloom of the global recession. This particularly applies to villas, condos and apartments where local agents are reportedly noting a sustained level of inquiry, if not too many sales.
Overall investors are predicting the Asian real estate market will recover in 2010 driven by China, Australia and Japan property sectors. At Djinnah Santi we continue to get regular inquiries from agents on Phuket . Buyers are looking for bargains. However, we believe the quality of our property does not necessitate discounting.
We believe the owners of the two completed villas are very happy with the outcome. To illustrate this we have included an interview with one of them in this newsletter. At this stage we are comfortably riding out the storm and believe that 2010—in line with predictions about the global property market – or even before, will see a pick up in firm interest in the property.
The political landscape is outwardly much more stable. The Democrat led government certainly has its political issues but it ploughing ahead with large scale projects that will result in many jobs over the mid to long term. Mostly importantly, Phuket has escaped the direct affect of protests although it is fair to say the numbers are down more this year than before, which is affecting the amount of property activity on the island.
We have lots of interesting stories in this newsletter.
Read on.
Kind regards
Bart
Real Estate Recovery In 2010: Djinnah Santi: Moving Along
We are doing just that: moving along with the development despite what is happening in the rest of the world. We are continuing building, we have no distressed inventory so there is no need to discount prices, we have two very high quality villas completed and we continue to attract buyer interest.
In addition we are making good progress toward completing the utility infrastructure. We expect to be on full power, water, telephone, television etc by the end of August. Full power will be on by the end of June.
At present we have two villas completed, three under construction, one just starting construction and five to be started. We believe the owners of the two finished villas are very, very happy with what they have.
The Market
While we have no new sales – like pretty well everyone on Phuket—the market is starting to feel better. Even though there are less travelers because of the low [now called 'Summer In Phuket'] season and the global recession, we continue to get one or two inquiries a week from agents. This is encouraging.
Buyers are obviously looking for a cheaper deal and expecting generous discounts. However, as we said in our welcome note, we at Djinnah Santi don’t believe we need to discount as our property does not fit this category.
We believe we are being realist with our prices given the market and the quality of our property. There is no denying Kalim Beach, with the spectacular views, is a top spot on Phuket. We have the added advantage of being near Patong with what it offers and access to other parts of the island is very easy.
Access to Djinnah Santi
Access to the property is up a fairly steep road. However, it is easily negotiable. We believe the views, the unique landscaping [bringing the hill up to meet the villa rather than sitting on the side of a slope ] and privacy more than compensate.
It is also fair to say that the type of people wishing to own a Djinnah Santi villa are more likely to view it as a long term home prospect and not as an investment property for rent. Therefore access is not an issue for them.
Website: Blog Away
We have completed our new look website www.phuket-djinnah-santi.com In this regard we encourage readers to go into the site and look at the blog facility. We are interested in feedback of any kind. As the ‘new media’ revolution is sweeping the world [You Tube, Facebook, Twitter, blogs etc] we are trying to ‘get with the program’ at Djinnah Santi.
See The View: From A Container
That’s right. We have sited a large container on plot No 9 with the most spectacular sea views imaginable. This will be our new office. It will allow visitors to fully appreciate the superb location of Djinnah Santi.
Billboards: See the View
We will have new billboards up in July. They will update the existing ones to show the considerable progress we have made in developing the property, and particularly highlighting the views across Kalim Beach into Patong Bay. The billboards will also showcase the completed villas to give prospective buyers best of both worlds. A particularly attractive young lady is also in the picture admiring the view.
Summer In Phuket
The Summer In Phuket programme is benefiting Kalim Beach, which Djinnah Santi overlooks. This programme is backed by most of the major hotel and property developers on Phuket, including us at Djinnah Santi.
In fact Bart is taking a lead as the co-ordinator responsible for Kalim Beach. Staff and construction crew from Djinnah Santi were used to clean up the beach [which actually did not need a lot of cleaning, it is one of the better ones on Phuket] and also took part in an island wide clean up of klongs, drains, roadsides etc using some of our own construction equipment.
The programme’s overall objective is to promote Phuket as a suitable ‘low season’ place to visit by rebranding it ‘Summer In Phuket’ because it is, in fact, the Phuket summer from April to November when most of the rainfall occurs. It has started in a small, but practical, way, by using hotel staff and other volunteers to regularly pick up rubbish of the various beaches deposited there mainly by the ocean, but also by not so environmentally aware locals and visitors.
Asian Real Estate Survey: 2010 Recovery Predicted
An Asian Real Estate Association [AREA] investment intention survey for 2009 showed twice as many investors [50%] intend increasing allocations to Asian non-listed real estate funds in the medium term -3-5 years] compared to 24% in the short term [1-2 years]
Investors and fund managers were the most optimistic about a recovery in 2010. The survey showed investors were committed long term to Asian non-listed estate funds with access to expert management given as a major driver for this optimism in the region.
China, Australia and Japan featured in eight of the top 10 location and sector pairing preferences of survey respondents. China residential and retail investments led the way for investors with China retail, Australian office and Japan office the main focus of fund managers.
Phuket Rental Market Expected To Increase
Local analysts are expecting the current residential holiday boom in condos, villas and apartments to result in a vastly enlarged rental market in 2-3 years time. Demand for the product is currently strong.
Improvements To Environmental Act
An amendment to the Environmental Quality Act of Thailand has been prepared to tidy up perceived abuses of the existing act. New amendments put into more specific language the existing requirement for hotels or residential developments above 80 rooms to apply for an Environmental Impact Assessment. The new language includes an “or” provision if the gross floor area exceeds 4000 square meters.
Local Authorities Step Up Enforcement of Leaseholds
Local municipalities [Or Bor Tors] are stepping up their enforcement payment of tax on leasehold properties on Phuket. Leasehold apartments are subject to tax. It is calculated on 12.5 % of annual rental value. Foreign owners will be subject to the tax if they lease their properties. The tax does not apply to owner-occupied units.
Reduction in Business Tax
In an effort to boost real estate sales and the local economy the Thai government has announced a reduction in Specific Business Tax from 3.3% to 0.11% for a period of one year. This is in addition to the reduction in property transfer tax from 2% to 0.01% which came into effect on 28th March 2009.
The current reduction applies to all types of real estate, including condominiums and villas and brings the taxes payable on property purchase and registration to minimum levels.
Investors looking to purchase property in Phuket can benefit immediately from these reduced rates and also take advantage of some exceptional offers available throughout the island.
Confusion Over Foreign Condo Ownership Clarified
The Thai Director of the Land Department put a scare into Phuket developers when he was quoted as saying foreigners were only allowed to own 40% of a condomiums. This is not correct. The 49% rule still applies.
What Is A Phuket Villa?
Good question. CBRE Richard Ellis has provided the answer in its online market research segment. According to CBRE a luxury villa is above 90million THB, high end between 35-90 million THB; mid-range between 15-35 million THB and entry-level below 15 million THB.
Common characteristics of a high end villa are: good panoramic sea views, easily accessible locations, good and secure neighborhoods, good building design, layout and decoration, good standard of construction using high-quality materials and specifications; professional management and a rental program provided.
Global Sales Hit Bottom
Property analysts are predicting a plateauing of the drop in global property sales [a record 67% year-over-year drop in Q2’09 sales.]. However, nobody is shouting from the rooftops yet about a robust recovery. With China, Australia and Japan beginning to stabilize, Asia Pacific sales are expected to be positive with an 18% gain on the prior quarter at USD23.3 billion. Apparently there is a reversal of investment patterns going on in Asia Pacific. So called cross-border investors have all but disappeared and, in fact, are in selling mode.
Fashion Week
Phuket is trying to get with the programme when it comes to international events that will attract visitors during the ‘Summer’ season. One was the Phuket International Fashion Week at the Jungceylon shopping centre. In one wee from 24 June, 2009 there were 21 fashion shows featuring 150 models plus concerts and other entertainment. The local community got behind the fashion week, which, hopefully, will become an annual fixture.
Hotel Discounts
Potential buyers at Djinnah Santi wishing to come to Phuket for a few days to look over the property will be coming at the right time over from now until the end of September as hotel rates throughout Thailand, including Phuket, are being slashed by up to 50%. ‘Blue Hotels Campaign’ is an effort to fill hotel rooms. Thirty eight hotels in southern Thailand, which would include many from Phuket, and 34 from greater Bangkok are included. Also included in the discount programme are shops, outlets, co operatives, fresh markets, taxis, entertainment venues and cargo carriers.
VIP Jet Facilities
Any Djinnah Santi investor wishing to fly into Phuket on a private jet will, within the next year, all going well, be able to taxi to their own private jet facility at Phuket International Airport. An enterprising businessman is seeking to set up the VIP jet terminal at PIA in recognition of the number of financial high flyers, literally and figuratively, who come to the island.
Construction Update
Overview:
- Villa 6: 100% complete
- Villa 8: 100% complete & First time occupy by owner April 2009. Under defect repair
- Villa 10: 87% complete, structure 100% Final internal architectural works under way
- Villa 7: 56% complete, structure 100% Final internal architectural works under way
- Villa 5: 58% complete, structure 100% Final internal architectural works under way
Infrastructure:
- Over all 45% complete
- Main road 100% complete
- Road 1 entry to villa 8, 9, 10, 11 complete retaining wall 100% finishing
- Road 2 entry to villa 6, 7 complete, retaining wall 100% complete
- Road 3 entry to villa 4, 5 start cutting the soil
- Main M&E works has been complete for duct bank and underground conduit already install along main road
- Substation & management office will start the transformer plant very soon
- Main electricity has been submitted to PEA & installing the electric pole
For further information visit: www.phuket-djinnah-santi.com
E-mail: sales@my-villas.com or call Bart Duykers on Mobile 0813703666
