Published on 06 December 2005 at 06:26 pm
Filed under: Asia:- Thailand Property Guides » Thailand Property Investment Potential
The majority of the property investment potential that exists in Thailand today exists because of the tourism industry.
Therefore because there is a symbiosis between the investment real estate sector in Thailand and the tourism sector it’s important for an investor to examine both sides of the coin before making a commitment to Thai property.
Currently property prices in Thailand have been unaffected by the 2004 Tsunami. However tourism numbers are down which means that investors who purchased with the soul aim of letting their properties out to visitors in Thailand have a smaller audience to target and potentially less chance to profit and those who are developing properties or buying off plan for resale to holiday home seekers have a smaller number of people interested in their apartments and houses which may have a negative effect on rental yields and capital appreciation potential over the short term.
Property investors in Thailand previously focused the majority of their attention on Phuket as it was one of the best developed areas of Thailand where the infrastructure was excellent, quality property developments were in abundance, tourism interest was hot and profits were hopefully easy to come by. But because Phuket was quite badly hit by the Tsunami, investor and tourism interest has shifted focus elsewhere. It’s predicted that this reversal in Phuket’s fortunes will be temporary but investors not willing to take that risk have already diversified their investment base.
In Koh Samui in Thailand where the Tsunami’s damage was less and subsequently tourist numbers are remaining quite strong, land prices have increased by 20% in the last year. There are a series of superior property developments currently being constructed that are also receiving substantial interest in both the resorts of Hua Hin and Lanta Island. All of these areas of Thailand are less well developed in terms of infrastructure compared to Phuket but all were less badly damaged by the immediate and after effects of the Tsunami.
A property investor in Thailand would do well to watch and second guess the tourism market if he is to target investments correctly and market to an audience interested in his particular product. Furthermore, an investor purchasing property to let out in Thailand will one day want to resell that property to take the capital appreciation he has hopefully gained and therefore it is unwise to buy properties in Thailand that are too far outside the local economy.
Despite the restrictions on foreign freehold ownership of land in Thailand investors are still keen to get into this market because the overall appeal of Thailand as a destination has not changed. It is a vibrant, exotic, charming, beautiful and exciting country that offers property investors medium to long term potential.
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