Thai island delights
 In the second of our two-part series on the Thai property market, we look at two new areas of growth: popular beach holiday destination Krabi and scenic northern Chiang Mai, known as Thailand's "second city"
Published in Square Foot Magazine on November 1 2006
Cool Krabi
Krabi province, famous for its beautiful islands and towering limestone cliffs, lies on the southwest coast of Thailand, along the shores of the Andaman Sea.
The real-estate market here is far less developed than that in wealthier Phuket, but investment in property and holiday homes is increasing. There are a number of well established resort hotels in Krabi, one of which is the Sheraton Krabi Beach Resort in the Klong Muang area, which is seen as a good area for future investment. Another brand-new five-star hotel is the Phulay Beach Resort & Spa.
According to a recent article run in the Thailand Property Report, three marinas are planned for Krabi, using a co-investment scheme between the private and public sectors. The total project is envisaged to total Bt1 billion [HK$209 million]. The Krabi Tourist Association has said that the marinas should serve 1,000 yachts by 2008. Krabi, with its spectacular scenery and beaches, is a popular destination for yacht owners, and the local authorities hope that the area will continue to attract more high-end travellers in the next few years. All this - along with the development of a better service infrastructure and the new Krabi International Airport - is helping the establishment of Krabi as a top touristm destination and good news for property investors in the long run.
Unlike in the established markets of Bangkok and Phuket, there are few condominiums developments in Krabi. (Condominiums are more straightforward for expatriates to purchase than other forms of housing.) While house prices are sometimes inflated for foreigners, this is not always the case. Robert Reynolds, the managing director of property agency Krabi Consultants, has been quoted as saying that "is that there are no more bargains to be had in Krabi" and that prices are now comparable with other beach areas in Thailand.
If you do plan to buy in Krabi, educate yourself. Even when buying a completed house, land will be the major component of the price, as building costs are relatively cheap. According to the website krabihomes.com, the demand for Western-standard homes is rising quickly.
Check out Chiang Mai
Chiang Mai is famous as the gateway to scenic northern Thailand with its rich cultural heritage. It is one of the country's developing property markets, with several recent developments giving it added impetus. These include the prestigious three-month international horticultural exposition, the Royal Flora Ratchaphruek 2006, which kicks off in Chiang Mai at the beginning of this month.
Organisers expect around two million people to attend the expo, which has attracted exhibitors from over 30 countries and is hailed as a milestone in its growth as a tourist destination - and, consequently, pushing up land prices in the area. The Thailand Property Report reports that the landscaped park had "helped transform the up-and-coming Mae Hia district of the city and has had a significant effect on land prices in this area southwest of Chiang Mai". Certainly, it has drawn speculators into the area, with "for sale" signs reportedly lining the main access road to the park. The government has also built a new dual-lane highway to the entrance and upgraded other roads.
S everal new five-star hotels and in and around the city have also helped to spark renewed interest in Chiang Mai. Property prices near the controversial Night Safari (a recently opened zoo that has been widely criticised by conservationists) has reported also increased substantially, or even doubled.
Chiang Mai is traditionally a low-rise town, with freestanding houses providing most accommodation, but several developers have started with the construction of condominiums - one of which is the Siritara block in a relatively unspoilt area near the mountains, 10km from the city centre.
While some market watchers believe that the long-term expectations stirred up by the recent interest in Chiang Mai are unreasonable, the town is undoubtedly growing in prominence with a definite increase in property investment across the city.
Points to ponder
- According to the Thailand-based Kasikorn Research Centre, the overall market in Thailand has slumped by 4.5 per cent in the seven months to July - however, there is "strong demand" for condominiums in Bangkok and resort properties.
- Expatriates cannot buy property in their own name in Thailand, although foreigners may register ownership of a 3-year lease. They may buy freehold condominium units, but not more than 49 per cent of the total saleable area of the total units in the development. While many foreigners buy property in the name of a trustworthy Thai friend or spouse, be aware that since the property will not be in your name, you will have no claim to it if something should go wrong. Get a reputable, experienced lawyer to help you through the buying process and to make sure that all contracts are in order.
- With a lack of enforced zoning in Chiang Mai (and many other towns in Thailand), it is not unusual to find a large house next to an overgrown plot and to have prime land with a rundown house on it. Search carefully for that gem.
Who
Krabi Homes
Krabi Property
Chiangmai Home and Property
Real Estate Chiang Mai (www.chiangmai-property.thailand-real-estate.info)
Invest Thailand |
