Property seekers eye not only vacation homes along the kingdom’s pristine beaches but also investment units with rental management
Thai resort locations are catching the eye of investors seeking to generate returns amid the slowdown of the Bangkok market, according to a new report by CBRE.
Sales performance of properties in areas like Phuket, Krabi, Phang Nga, and Hua Hin have been improving over the last two or three years, due to a dearth in the luxury supply resulting from rising land prices as well as a rarity of adequate plots.
“In present days, clients do not purchase resort properties only for vacation purposes, yet also look at gaining return from long-term investment by renting out, resulting in the shift in attraction towards projects with rental management,” said Aliwassa Pathnadabutr, managing director of CBRE Thailand.
Sales of projects in high-end to luxury segments continue to perform well, she added. This is especially true for beachfront and ocean-view properties, where 80 percent of the buyers are Thais looking for properties with investment schemes or rental management, and branded residences.
The improving situation in resort locations comes as market observers anticipate the implementation of the Land and Buildings tax, poised to tax vacant land by a rate of 0.3 percent to 0.7 percent, growing 0.3 percent every three years.
The sales rate for new condominium supply in Bangkok in the second quarter of 2019 descended to 15.7 percent, an “all-time low” according to Knight Frank Thailand. Analysts attributed the descent to the government’s loan-to-value (LTV) limits and a strong baht.
Locations along the western coast such as those in Phuket, Krabi, and Phang Nga fare well because the beaches along these areas are “more scenic”, CBRE analysts noted. They also tend to host high-end projects, leading hotels, prominent tourist attractions, and high-quality amenities.
“Properties on this side of Phuket have started to expand further to the North of the island, from Kamala beach to Mai Khao beach, and the south of Phang Nga. The expansion has also grown into the East, including Krabi province which is located near the Phuket International Airport,” CBRE Thailand noted in its report.
Most launches in Hua Hin over the past couple years have not been beachfront properties, defying pent-up demand for waterfront condominiums. “Due to this lack of supply, the level of inquiries and sales performance have been very good for both existing and newly launched projects located on the beachfront,” CBRE analysts noted.
Set within driving distance of Bangkok, Hua Hin is a traditional favourite among Thai property seekers, especially those looking for resort homes.
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