Parts of the property sector in Thailand`s southern resort province of Phuket could take another six months to recover…
Parts of the property sector in Thailand`s southern resort province of Phuket could take another six months to recover from the damage wrought by the December tsunamis, in part due to the reluctance of insurance companies to pay out compensation, the head of the Property Association warned today.
Lt. Phumisak Hongyok spoke of a clear slowdown in business on the southern resort island, noting that the island`s economic recovery was entirely dependent on encouraging tourists back to the province.
Most property development currently underway on the island was development that had already begun prior to the tsunami, he said, adding that new development was being put on hold while developers waited to size up the market.
While noting that several local schools required repair work, he said that this was being delayed by insurance companies who refused to go ahead with compensation until documentary evidence of loss could be found.
As a result, revival at the Patong Beach area is slower than it should be, he warned, noting that when floods hit the southern town of Hat Yai a few years ago, insurance companies had waited a year before shelling out compensation.
Lt. Phumisak said that the worst hit part of the property sector was the market for medium and low-cost housing, as most of the potential purchasers were involved in the tourism sector and were therefore unable to make property investments.
It could be another six months before this sector picked up, he warned.
However, he said that the situation could be remedied if these people received low-interest emergency loans from the state.
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