Inside the numbers: the potential of a Phuket property bubble

One of the most common questions I am asked these days is about a potential Phuket real estate bubble. While it’s a popular buzz term, so many who ask the question don’t understand what a bubble is.

The most notable real estate bubble in recent history was the subprime housing crisis in the United States in 2007. In other sectors, there have been bubbles like the dot.com crisis of 2000 and 2018’s crypto-crash.

Fundamentally bubbles are when valuations reach unrealistic numbers and underlying fundamentals of sustainable growth go awry. This typically results in a crash, and in real estate terms, that would mean a sharp drop in property prices.

In many parts of the world, especially the West, real estate is susceptible to a bubble as a result of being impacted by liquidity in the marketplace. When there is the absence of cash, loans or mortgages are more and more highly…