I’m getting a lot of requests for fire sale property at the moment, so I thought I’d bring you all up-to-speed with what’s happening, what’s not happening and what to expect in the next 6 months. Now, I do have a tendency to ramble on a bit (see what I’m doing here), but I keep this subject as short as possible and on-point.
What’s Happening With Fire Sales?
It’s not a free-for-all, anything but. Let me explain. The Phuket market has historically been a 2nd and 3rd home market. As banks don’t tend to give loans/mortgages to foreigners looking to invest in Thailand, most of the property purchased is done so with cash/available funds.
This means that the buyers/owners are positioned to release that kind of expense and are not going to experience much or any hardship. The property is an investment and sometimes just a place to park excess funds in the form of bricks and mortar. It’s not costing them much in running costs and this was budgeted for in any case, when they purchased the property. All bar their personal circumstances changing, the property if offered for sale, is usually at market rate.
However, there is the odd occasion, for some reason or another, which the owner wants/needs to off-load the property quickly. And in a slow-moving or depressed market, this is when we see some Fire Sales emerging. The other Fire Sale opportunity comes from developers, where cash-flow is crucial to successful and timely completion of a project. Usually, the units offered at greatly reduced prices are troubling units that receive little or no interest due to the location within the project (maybe they will be susceptible to road noise or poor natural light etc). These units can then off-loaded with significant savings to the buyer and be one less headache for the developer and may be offered on only a small number of units. These options are becoming a lot more common in numbers than the resale market.
What’s Not Happening With Fire Sale?
The ordinary resale owner who is under no pressure to sell is still open to everyday negotiation and happy to talk. However, these sellers are not in a rush to off-load at any cost, why would they be?
Also, developers that are ahead of their projected sales figures and on target to complete are also not overly concerned at the moment, yes it’s hard, but it’s hard for everyone. If the bad times are prolonged then they may well consider their options and change things up a little. On Phuket right now, whilst there is no confirmation of a date when tourism is to restart, the general consensus is that the Chinese market will come back in droves and the market will bounce back. Until then, let’s just see.
What To Expect In The Next 6 Months?
Well, property is still being sold and transactions are happening. A number of these are developer fire sales or “significant reductions on selected units”. Whether they be an apartment or a villa. Prime’s advice is if you are ready to buy, make sure your funds are available. And you are in a position to close quickly. These two previous points will give you more bargaining power above anything else. Remember; the property should fit 100% with your requirements.
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