Andaman Land Boom - Prices Skyrocketing

[george]

Andaman land boom - prices skyrocketing

RESORT PROPERTY: Andaman land boom

Prices in Phang Nga and Krabi skyrocket over past 12 months

PHANG NGA: -- Property investment is booming in Krabi and Phang Nga, neighbouring provinces of Phuket, with land prices increasing by more than 100 per cent since the start of this year.

"Last month, a local investor bought 60 rai of land from the Financial Sector Restructuring Authority (FRA) for Bt80 million. Last week this investor sold this same plot of land for Bt120 million, making a profit of Bt40 million in three weeks," said Samacha Potavorn, the governor of Phang Nga.

The value of land transactions in Krabi and Phang Nga hit Bt5 billion in the first half of this year, Governor Amnuay Sa Nguannam of Krabi and Governor Samacha said in an interview with The Nation.

Together with Phuket, Krabi and Phang Nga comprise the Andaman Triangle, a location for marine tourism and the gateway for trade to South Asia. Each year about five million foreign travellers visit these three provinces, making them the hottest destinations in Thailand.

Samacha said that investors from Phuket, Bangkok and abroad have been buying up Phang Nga properties as they plan huge investments in the hotel and resort sector.

The buying spree took off last year, following in the footsteps of Krabi, as property prices in Phuket became too high.

"This has driven up the land prices in Phang Nga by more than 100 per cent in the first half of this year," Samacha said.

He added that a number of investors plan to construct resorts and hotels in line with the government policy to promote the three provinces as world-class marine tourism destinations by 2007.

Within three years, the governor believes that Phang Nga will have hotel accommodation of up to 10,000 rooms, or double the present level. In 2002, Phang Nga had only 2,500 hotel rooms.

That means investors would expand their investment by Bt5 billion in the next three years for resort and hotel construction in the province, Samacha said.

Somkeart Sangrung, chief of the Land Department of Phang Nga, said that the department recorded land transaction fees of Bt129 million in the first half of this year, indicating the value of land that changed hands was worth up to Bt2 billion, compared with land transaction fees of Bt93.7 million in 2003.

Investors include an owner of Phuket Acadia, the Amari Group and hotel chains from Europe that declined to be named, Somkeart said.

Currently, Phang Nga has one luxury hotel - the Sofitel Magic Lagoon Resort & Spa.

Sofitel Magic Lagoon Resort & Spa is owner by Turkish investor Atmacan Zienel.

The hotel was opened last year with 100 rooms available out of a total of 319 total rooms, all of which will be available when the project is completed by the end of this year.

The hotel had a 90-per-cent occupancy rate during the high season last year.

The prime locations for investors in Phang Nga are Takua Pa, Thai Muang and Takua Thung.

Krabi also has also had huge investment over the past two years. Investors have turned from Phuket to Krabi, which is relatively cheaper and also has an international airport and long, beautiful beaches.

Amnuay, Krabi's governor, said that investors have been gearing up to invest in Krabi for two years, concentrating on Ao Nang, which is the prime mainland location to access a number of islands.

But now a number of investors have shown interest in Koh Lanta, a new tourist destination in Krabi province. The investors include the Dusit Thani Group, the Central Group, The Grand Hotel Group and Thai Nakorn Pattana Co Ltd.

Amnuay believes that room accommodation will increase from 9,088 units at the end of 2003 to 11,000 units this year, with new investment of up to Bt3 billion for the construction of resorts and hotels.

Chief of the Land Department of Krabi, Sakwut Chimtinom, said that the official valuation of land in Krabi increased 79 per cent by January 1, 2004, but land transactions increased by as much as 100 per cent in some areas such as Ao Nang and Lanta Island.

Last month Chamroon Chitratsanee, the owner of the Grand Hotel in Bangkok, bought Phi Phi Palm Beach Resort for Bt500 million from Phi Phi Holiday Co Ltd.

Sakwut estimated land transactions in the first half of this year increased by between Bt2 billion and Bt3 billion, based on estimations made from the transaction fees.

Krabi boasts a number of luxury hotels, including the Sheraton, Rayavadee and Twin Lotus. The Central Group is also developing a resort hotel at Ao Rai Lay.

--The Nation 2004-07-26

[Martin]

I thought it was a growing cloud that one saw on the horizon, not a bubble?.

[maerim]

Within three years, the governor believes that Phang Nga will have hotel accommodation of up to 10,000 rooms, or double the present level. In 2002, Phang Nga had only 2,500 hotel rooms.

No doubt this once pristine area will aimed at tourists who want to get away from crowds and high rise project destinations.

[Thailand]

More of lovely Thailand being developed and destroyed in the name of money- oops, sorry progress.

[meadish_sweetball]

Boom boom!

[MaiChai]

So Phuket is now too developed/expensive, so people now look for new, unspoilt destinations. Whats happens when the Thais have ruined everything beautiful, and they run out of beautiful places to develop? Tourists are not stupid and will go places that offer good value for money and are nice places to go. I decided back in 1998 that I would not visit Phutket again.

What about keeping places beautiful and accessible to people of all income levels/dispositions? Vietnam has a large seaboard, and must have plenty of beautiful beaches...

[organic]

Yep, land prices have gone a bit silly, afaics out of all proportion to the actual tourism levels. I know loads of people round here running accommodation who aren't making anywhere near enough to get by. In Krabi town itself, we have plenty of prime business sites that have been unoccupied for several months, simply because the rent is ridiculous, the sort of money where you'll make a little in the high season, then lose hand over fist from March onwards. Loads of new construction going on all the time.

Another classic bubble, methinks.

[royar2002]

There was a boom in Koh Ph-ngan too, a couple of years ago. Some atractive land raised from a 100k-1mill a rai in four years. Still no buyers, still same land for sale, so where is the boom. Following the thainews it should be everywhere.

[Sarawudt]

Yep, land prices have gone a bit silly, afaics out of all proportion to the actual tourism levels. I know loads of people round here running accommodation who aren't making anywhere near enough to get by. In Krabi town itself, we have plenty of prime business sites that have been unoccupied for several months, simply because the rent is ridiculous, the sort of money where you'll make a little in the high season, then lose hand over fist from March onwards. Loads of new construction going on all the time.

Another classic bubble, methinks.

How's the Europa restaurant doing by the way? Is it good business?

What rent levels do you find ridiculous?

[Rhys]

Years ago this little province and moo ban was nice.. a little mom and pop resorts, a small little dive shop, and little interference from the Thai MP ers. It is a shame, a sham, what is happening...in the name of TRT progress objectives.. So the TRT MPers..... know that the south will fall off into the ocean and they are buying up the waterfront property.

It was nice to have known this area before the rape expansion...

[organic]

How's the Europa restaurant doing by the way? Is it good business?

What rent levels do you find ridiculous?

Europa seem to be doing fine, a good % of tourists here are Scans and Europa seems to be a must-visit for them. I'm actually posting from Popeye's next door right now!

An example of the rents, the 89 Cafe on Thanon Uttarakit hill, been empty for months, 45000 / month, bit dilapidated, ordinary 1 unit size. The rather flash green place next door has a for sale sign too. Two more businesses in that row went under this year.

[Martin]

The 1997 financial crash caught two high-rise hotels half built in Khon Kaen. The tower cranes on them haven't moved over their carcases since then.

But I suppose a 2007 financial crisis will leave Krabi dominated by high-rise carcases that can be colonised by sea birds as a tourist attraction!

[meadish_sweetball]

If there's any sense in them, they let the skyline stay as low as possible and don't commit the same mistake as the Mediterranean countries... Koh Chang seems alright for that so far, despite the rapid development recently.

That the soul of the place is gone is another matter. Well, at least some of the locals can buy nicer cars and their kids will get bachelor's degrees...

Progress. It's got a bit of a bitter aftertaste, doesn't it?

[keestha]

When a beach resort is developing, there will always be people complaining that it is losing its soul. But you cannot freeze time, those complaining about for instance rapidly expanding Phangnga and Krabi, should just move on to less developed coastal areas like Trang, Chumporn, Songkla, Ranong or Nakon Si Tamarat. Lots of nice beaches there which also have beach bungalows, and restaurants selling the authentical Thai Food. Going to a touristy place, you shouldnt complain it is touristy and therefore inevitably growing! Granted, rapid development can have drawbacks in the sense of rents rising too high and therefore premises remaining unoccupied, or worse skyscrapers that remain half finished .

[thoreau]

Yes, all those locations have beaches and some of them are quite nice especially Trang province. But Krabi 20 years ago was phenominal! Ao Phra Nong beach was occupied by just a few beach huts with a restaurant under a Karst cliff. Then they built the Rayavadee Hotel and fenced off the entire area except for a small strip by the cliff with a narrow path for walking from Ao Phra Nong to Ao Railay. Also the noise from the hotel generator is terriblly loud. I would say the natural beauty of Krabi province and perhaps Phangnga which I am less familiaa with are world class. However most of the hotel develpment borders on 3rd world!

[capt_canada42]

Yes prices are going up but not as much as they would like them to go. I know I sell land in these areas, the country is filled with speculators and there are alot of people who want the prices to go sky high so they can make out like bandits.

These are the people who are telling you there is a feeding frenzy going on.

The fact is there is still cheap land even in Phuket but most people are to lazy to look for them selves so they end up being fish food for the sharks out there.

Speaking of that I havn't had my sucker fish snack for the day.

[Tornado]

Yes prices are going up but not as much as they would like them to go. I know I sell land in these areas, the country is filled with speculators and there are alot of people who want the prices to go sky high so they can make out like bandits.

These are the people who are telling you there is a feeding frenzy going on.

The fact is there is still cheap land even in Phuket but most people are to lazy to look for them selves so they end up being fish food for the sharks out there.

Speaking of that I havn't had my sucker fish snack for the day.

Please send me info on cheap land in Phuket and I do not mean Mission Hills, Ao Phor and the like.

I do not understand the rest of your post as the prices have dramatically risen in Koh Yao Yai/Noi (3 mil per Rai beach front), Krabi (10 mil beachfront) Pak Meng (10 mil if you can find some with title), Phi Phi (ask your price).

I understand by your post that you are new to the game and it shows in your post.

[simon43]

Just to give you an example of 'cheap' land in Phuket, the 6 rai that I'm buying (NS3G title) is 1 million baht/rai, about 5 minutes from the beach. But a few miles inland I have seen very decent NS3G land at about 200,000 baht/rai (all of which is pretty cheap for Phuket...)

[Tornado]

Just to give you an example of 'cheap' land in Phuket, the 6 rai that I'm buying (NS3G title) is 1 million baht/rai, about 5 minutes from the beach. But a few miles inland I have seen very decent NS3G land at about 200,000 baht/rai (all of which is pretty cheap for Phuket...)

Simon, where did you buy the land at 1,000,000 per Rai ? and where is the 200,000 baht per Rai land?

There definately is land for 1 mil per Rai (but I would not live there), but 200,000 per Rai restricts you to Thalang only.

[Darlek]

What about keeping places beautiful and accessible to people of all income levels/dispositions? Vietnam has a large seaboard, and must have plenty of beautiful beaches...

Dream On , Thais are too greedy to be bothered about whether you return to some pristine beach . i saw it happen in Phuket , Ko Change will be next .

[Lovinda]

About expensive beachfront land at Koh Yao Yai...I have a contact who owns land on Koh Yao Yai. He has beachfront land for sale for much less than 3 mill. baht/rai! Ex. 6 rai for 9 mill. baht..that is only 1,5 mill./rai. He also got a bigger plot of 84 rai for sale at 950'000 baht/rai. So it is still possible to get good bargains near Phuket.

[capt_canada42]

Yes land prices will continue to rise as long as the locals feel we can pay them its hard for them to see it any differently as every person arriving here raves about how good it is here.

So of coarse the prices keep going up by leaps and bounds. But many of the regular Thai's just want to sell there land and arn't asking totally out rageous prices.

Thus I still get many pieces that arn't over priced but good deals considering it is a great place to live.

[Phuket Homes]

About expensive beachfront land at Koh Yao Yai...I have a contact who owns land on Koh Yao Yai. He has beachfront land for sale for much less than 3 mill. baht/rai! Ex. 6 rai for 9 mill. baht..that is only 1,5 mill./rai. He also got a bigger plot of 84 rai for sale at 950'000 baht/rai. So it is still possible to get good bargains near Phuket.

Please contact me with regard to the land on Koh Yao, I would be interested to know more. Thanks.

In my experience, land over on these two Islands has become rare. I do come accross some gorgeous land on the east coast (the views and beaches are far better) from time to time but the prices for a a nice size beachfrontage is around 2 - 3 per Rai. I have many parcels of land on these Islands (differing prices, sizes and locations) and if any person here is interested to know more, feel free to contact me.

Regards

Brett Moffitt.