Take a look at a recent article in the Daily Mail, http://www.dailymail.co.uk/news/article-2005357/British-tennis-giants-Rusedski-Lloyd-war-9m-Thai-property-deal.html The article is pretty self-explanatory, tennis professional Greg Rusedski is suing ex-tennis pro and entrepreneur David Lloyd for 740,000 pounds. Rusedski invested the allegedly ill fatted cash in David Llyod’s luxury property development in Phuket.

I will by-pass repeating “allegedly” and leave the dispute to the courts. What concerns me is the vast circulation of The Daily Mail with over two million people (not including the reach via the web). This coverage inevitably has a negative impact on the image of the Phuket property market with two wealthy and successful individuals (supposedly) losing money and stalling a project. Whilst financial and time issues can occur internationally in the property development market, the key to a successful project (especially off plan) is consumer confidence.

The formula for developers is simple;

1. Momentum and progression (ideally visually); Buying Off plan is all about confidence, if a project has been underway for 6 months with nothing to show to the prospective buyer it doesn’t scream “BUY ME”. Additionally, existing owners need to see their investment flourish, with each visit their money tree of bricks and mortar needs to grow steadily.
2. Stick to what you promised; You wouldn’t accept a steak if you ordered lobster, they may both be similar in standard and price point but it’s not what was promised and it was not ordered……you get the point.
3. Show units; Whilst we need to appreciate that buying off plan is cheaper and therefore the potential for profit is greater, the need for buyers to SEE and TOUCH a show unit is vital to the sale of the development and the long term prospects.
4. Complete project; Need I say more?

Developers need to understand that these are second home investments, they are not a necessity, they are a luxury. Once buyers get a sniff of a bad investment it makes it twice as hard for the developer to sell. Inevitably, to every stalled development there are a hundred success stories. This is especially apparent in the Phuket market which continues to experience high success of re-sale for off plan developments. The Phuket real estate success stories are numerous with the most notable being Andara. Andara off plan villa prices were set between $2-3 million, re-sales have recently sold for $6-7 million. As mentioned in previous Blog’s, think carefully about your investment in Thailand and seek our advice before making a purchase.