Source: Baht & Sold
Land prices on Patong Beach in Phuket now reach 100 to 200 million baht per rai* (250,000 to 500,000 per square wah*), showing strong demand from high-end buyers, many of whom are repeat tourists, according to property consultant CB Richard Ellis (Thailand).
For prime beachfront plots, the land value has doubled from the levels in 2006 and yearly rises of 30-50% were not uncommon, said Khanitha Jarukirati, the company's associate director for Phuket investment and services.
Factors pushing up the land prices in Phuket include the scarcity of quality beachfront and sea-view land and sustainable growth in land prices. In addition to Patong, other prime locations with new developments are Karon and Kata beaches, where land prices stand at 40 million baht per rai.
According to the Phuket Land Office, 2,416 land transactions were recorded in the first quarter of 2008, a dip from 2,642 in the same period last year. Of those, 2,251 transactions were for land or land with buildings, 53 for buildings alone and 112 for condominiums.
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As of the first quarter of 2008, 64% of the total units at projects being marketed were sold, with the highest percentages seen for inland projects.
Ms Khanitha said Phuket property buyers did not depend much on debt to finance their purchase so the island is relatively isolated from the global slowdown.
I would moderate this last statement.
Of course the global slowdown is affecting the market of Phuket. Prospective buyer who have lost money in other parts of the world or who cannot get finance in their home country will be less likely to invest in Thailand.
Nevertheless, Phuket is somewhat hit not as hard as other markets, because we have been used here to work without credit for some time already and because globally there was no bubble here.
*NB:
- 1 Rai = 1,600 m²
- 1 sq. Wah = 4 m²
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