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Jittery Scandinavians Plan To Dump Phuket Properties

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Jittery Scandinavians plan to dump Phuket properties

By SALINEE PRAB

THE NATION, PHUKET

Scandinavians are planning to sell their properties on the resort island of Phuket en masse after the political riots in Bangkok badly shook their confidence, said Thanan Tanpaiboon, president of the Phuket Real Estate Association.

"In the past few months, there have been hot debates among Scandinavian settlers and some have put their properties up for sale," Thanan said.

"The situation blew up in May with the shooting and burning. This caused jitters among the investors. Though we have tried to convince them things are stabile, a lot depends on the government's stability and how it can restore confidence."

The Scandinavians' strongholds are along Patong, Kata and Rawai beaches. Aside from them, Phuket has welcomed huge investment from UK, German and other European investors, who are less frightened about political instability. The island is also proving attractive to Russian investors, who are buying into complete freehold condominium units.

Thanan said property transactions on the island were active in the first four months of this year, but the situation turned upside down in April. He noted that though the rioting was contained in Bangkok, it spooked foreign investors nationwide. In Phuket in particular, foreign tourists stayed away.

"It remains to be seen if tourism will pick up in the upcoming high season. If political stability is restored, things should improve," he said.

On transactions from Thai investors, he added that the situation would improve based on the recovery of the tourism industry. Demand would come mainly from business employees and owners, particularly for housing units priced at no more than Bt2 million each. Thanan said there were rare transactions for properties priced at between Bt2 million and Bt5 million.

However, the luxury high-end segment has been spared from negative impacts. These units, worth Bt10 million or more, are being sold directly between friends.

"Now, they talk about units priced at US$3 million to $4 million [bt95.5 million to Bt127 million] each. The price depends on satisfaction. Though negative factors remain, they believe Phuket will continue to prosper in the next five to 10 years. The downturn is also believed to smooth deals," he said.

Developers on the island must adjust their marketing plans, he said, adding that developers on Phuket were quite adaptive given the many crises from disasters and diseases.

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-- The Nation 2010-08-17

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