Navaz Sachedina is a pioneer, one of the growing number of British holiday-home buyers swooping on one of the world’s newest markets: Thailand.
“I visited Phuket, the main holiday-home area of Thailand, and was really impressed. It’s got a good infrastructure, build quality seems high, and you get more for your money than if you bought on the Costas or in Florida,” says the financial broker from London’s Docklands.
He has paid £187,000 for a two-bed flat overlooking Mai Khao beach on Phuket, Thailand’s largest island, an hour’s flight south of Bangkok in the Straits of Malacca. It’s in a new development called Turtle Cove, with a gym, concierge service and pool, marketed by Avatar International.
“If you look at other locations around the world such as the Caribbean, where prices for a one-bed flat are in the region of £180,000, the difference in what your money can buy for you in Thailand is amazing,” says Dave Ames of Harlequin Property, a UK emerging-market specialist.
“Spain and traditional markets have had their time. Thailand is on the way up, with more tourists and lots of scope for development, so I think the flat is a good investment.”
Phuket attracts 70% of all tourists to Thailand and more than 80% of holiday-home buyers.
Patong Beach is a dense western coastal strip, home to sex bars and dominated by hotels. Areas in the hills to the north and along the east coast are much less developed, with higher property prices.
Direct charter flights from London to Phuket take about 13 hours and start from £350. Most daily scheduled services, from about £570 return, go from London and Manchester to Phuket via Bangkok.
In exchange for the long haul, you get glorious beaches, summer lows of 20C and December highs of 32C. The cost of living is extremely low, the island’s interior is beautiful, and the locals welcoming. There are top-class golf courses and a host of outdoor activities, while roads are adequate and improving.
Holiday homes have been bought mainly by Hong Kong and Australian buyers for £250,000-£450,000, but now more relatively low-cost flats are being sold to UK buyers.
Continued on page two...()Continued from page one
At the other extreme there is the Royal Phuket Marina, a complex of waterfront villas and apartments with prices up to £2.83m. Close by is another upmarket scheme, Cape Yamu: boutique developer Yoo’s “fishing village” of 65 villas, each an average £1m, with a new hotel.
It is not unusual for mid-sized new-build homes on Phuket to have high-quality European kitchen and bathroom fittings as standard, and to feature exotic components: outside showers or small garden sun-houses.
Sea-view homes are increasingly pricey, but inland properties at the upper end of the market are still up to 40% cheaper than in the southern Med and parts of the Caribbean.
No British lender gives mortgages for Thailand yet. “It’s too new a market with too little demand so far. Anybody buying would have to negotiate with a local lender there, where interest rates are higher, or use equity from a UK home to buy outright,” advises Melanie Bien of Savills Private Finance.
The Asian tsunami, which killed about 300 people on Phuket alone, has also affected the market. Phuket’s tourism authority reports a 34.6% drop in visitors in 2005, with a consequent slump in holiday-home demand.
Knight Frank, which has a Phuket office, says inquiries from Britons have also fallen. The drop in buyers has exacerbated an oversupply of cheap flats on Phuket; some are valued at just £35,000 and built by new developers who have not always resolved land ownership claims. “Buyers should always check the credibility of the developer, architect, builders and the company managing the development,” says Knight Frank’s Steve O’Brien. “A purchaser should engage a competent legal firm to advise on the contract, due diligence and to undertake a ‘deep land search’.”
Villa values have continued rising because demand far outstrips supply, even with the post-tsunami fall-off in interest.
“A town house sold in 2001 for 13m baht (£188,000) has just changed hands at 21.5m baht (£312,000). One sold in 2003 for 19m baht (£275,000) has just resold for 27m baht (£391,000),” says James Batt, who runs Laguna Phuket.
For large properties, price rises have been even higher.
“Some buyers are of the impression that they can find expansive villas for less than £650,000. This isn’t the case. Luxury villas are now anything between £1.25m and £9m,” says Martin Phillips of Engel & Völkers, a German estate agency that opened its first Asian office in Phuket in December.
Phuket isn’t the only Thai location with a burgeoning holiday-home industry. On Koh Samui, a small island to the south of the Gulf of Thailand, prices are about 40% lower than on Phuket, but transport links are not as good.
“There are very few Britons so far living or considering buying anywhere other than on Phuket, simply because it’s so well-known and well-established,” says Phillips. “Prices for mainstream properties on Phuket haven’t caught up with that status yet. But this place won’t stay a bargain forever.”
Avatar International, 08707 282 827, www.avatar-international.com; Engel & Völkers, www.engelvoelkers.co.th; Harlequin Property, 01268 582 307, www.harlequin-property.com; Knight Frank, 020 7861 1737, www.knightfrank.com; Laguna Phuket, 00 66 7632 4366, www.lagunaproperty.com; Royal Phuket Marina, 00 66 7623 9755, www.royalphuketmarina.com; Yoo, 020 7009 0100, www.yooarehere.com
