However, the winds of change have swept across the industry, ushering in an era of transparency and accountability. Fixed-rate commission brokers, market price comparison sites and platforms enabling direct seller-to-buyer transactions have disrupted the traditional power dynamics. Gone are the days when a sharp suit and a silver tongue could seal the deal. In today’s market, knowledge, honesty and integrity reign supreme.
Now, let me caveat this by stating that I myself work in the property industry, though perhaps I am too honest for my own good. Our primary business lies in property inspections and surveys, offering a clear-eyed view of the market’s realities. From this vantage point, I’ve witnessed firsthand the unscrupulous tactics employed by some agents, tarnishing the reputation of the entire industry. Their tactics, ranging from misinformation and inflated prices to outright lies are wreaking havoc on the property market and leaving a trail of disillusioned investors in their wake.
One of the most egregious offences is the deliberate inflation of property prices, driven by the allure of hefty commissions. I’ve seen agents push prices up just to boost their 5% commissions, some even trying to push for 10%. Owners looking to sell are often asked what they want and are then told an inflated figure, capitalising on their aspirations. Prices that pre-COVID were B22 million are now being touted at B30mn, even as the market clearly plateaus. If the property doesn’t move, it languishes on the agent’s site while they shift their attention to easier sells, forcing the owner to eventually lower their price.
I recall a property in Laguna Village where an owner made some minor refurbishments and added a sauna to his sala. Agents seized on this, telling him that a property worth B40mn a year ago was now worth B80mn. I’ve seen agents lie directly to customers’ faces about returns on investment. A potential buyer was told a B23mn townhouse could be rented for B500,000 a month during high season, when realistically it could achieve B300,000 at most. I can guarantee if that sale went through, the promised rental income would never materialise. Another townhouse down the road was being touted at B800,000 a month. However strong the rental market is, with the influx of residents from Russia, the numbers simply don’t add up.
An estimated 100,000 new homes and apartments are being built on the island, many coming online this year. Many buyers have been guaranteed at least a 7% return on their investment. The rental market will be saturated; there’s only one way prices are headed. However nice your new sauna is, you’re being fed hot air!
Adding to the problem, no agencies on the island are accredited, and there’s no professional standards agency regulating them. This lack of oversight creates a breeding ground for unethical behaviour. In many countries, surveys or inspections are a legal requirement before any sale. Here, they’re often shied away from by agents as they’re seen as something that can upset or collapse a sale. This aversion to transparency further erodes trust in the market.
The ramifications of these unscrupulous practices extend far beyond individual victims. They cast a long shadow over Phuket’s reputation, deterring legitimate investors and hindering the island’s economic growth. The allure of this tropical paradise is being tarnished by the spectre of lies and deception.
The solutions to these problems lie in the hands of buyers and sellers. It’s time for a collective stand against these practices. Only when sellers refuse to pay exorbitant commissions and buyers insist on honest appraisals and market-set prices will we resolve these issues. Furthermore, the government needs to step in and establish a regulatory body to oversee the industry, ensuring that agents adhere to ethical standards and protect the interests of all parties involved.
Either that or we will wait for the property market to crash on the island as it is doing elsewhere in the country and the allure of a baht elsewhere will lead to agents moving on.
Simon Causton is a long-time Phuket resident, founder of Citadel Phuket and author of ‘The Phuket Periodical’ newsletter. X (Twitter): @SimonCauston