Land Prices in Krabi and Other Neighbouring Provinces
I have noticed that coastal property in Phang Nga, Krabi and other provinces around the South of Thailand seem to be much cheaper than in Phuket. Are these properties good buys? Which specific locations would you recommend?
Yes, you are correct in your observation that in general properties in the provinces neighboring Phuket are quite a bit cheaper than here in Phuket. But, as in Phuket, the difference between prime areas (predominantly on the beaches) and the hinterland can vary as much as a hundred fold and (to give one example) prime land on the beaches surrounding Krabi already exceeds the prices of similar beach land in the less developed beaches of Phuket, making it very hard to make such generalizations without qualifications.
Are these properties good buys? Before answering that, I think you need to consider the purpose of the investment. Is it for personal use or a business investment use? Is it for current or future development.
If you are looking for a property for current personal use, and we assume that you will prepared to build by yourself in the absence of finding suitable existing houses, you can certainly save money on the purchase or find property of a type that would now be un affordable in Phuket - but you should be aware that the lower prices typically represent a significant reduction in terms of facilities and services. Electricity is now generally found in the villages and along the main roads, but not in quieter locations, telephone coverage (even cellular coverage) is patchy outside the larger towns, basic shopping will usually require a drive to the nearest Ampher (town) and if you have a penchant for western goods or foods, it will entail a trip to Phuket. If on the other hand you have chosen to live a simple life have a strong degree of self sufficiency and are comfortable with only meeting other westerners on rare occasions, its certainly worthwhile to consider the less developed provinces - in the knowledge that the services will eventually catch up with you - indeed 20 years ago all these comments would have applied to Phuket, save that in Phukets case, it took a flight to Bangkok (or Singapore) to purchase French cheese or Italian salami.
From a business or long term investment stand point its clear that lower prices represent a potential for growth as the services and facilities improve. The big issue is of course timing. I recall that as long as 15 years ago, Krabi (the town and surrounding beaches) were being touted as the "next Phuket" and the savvy investors were buying up land and building the early resorts - Khao Lak (100 km north of Phuket town on the west coast highway) and for the really adventurous Khao Soke (a phenomenal National park with virgin jungle, lakes and limestone carsts, located partly in Phang Nga but mainly in Surat Thani province) were the next areas to be discovered.
Prices have indeed risen in these areas, but generally no faster than they did in Phuket over the same period, and for every area that did see significant growth there were dozens more potential areas on the 500 km of coastline between the Burmese and Malay border that have yet to see any development
The explosive growth of Phuket was exceptional, and its my belief that the establishment of the International status of Phuket airport some 25 years ago (for reasons that were much more to do with the tin business, and Phukets strong links to Penang - than any expectation of major tourist growth) was almost accidentally, the real key to Phukets fast track to world renowned resort.
While there are coastal areas as attractive as Phuket, and airports can (indeed are) being built in neighboring provinces, its my belief that with the head start that Phuket already has coupled with the allure, romance and focal nature of being an island, that it will be very hard for any of the neighboring provinces to catch up with let alone surpass Phuket as the regional center of resort related development.
The other provinces will undoubtedly grow, and some that have yet to have their names on a tourist map, will certainly be discovered and in time make rapid advances, but on the whole I believe that they will be better suited for development of specialist niche markets than competing head on with Phuket as major centers. Chose carefully, mix in a measure of luck, and be prepared to give it quite a bit of time and there are undoubtedly still good investments to be made up and down the coast from Phuket.