Phang Nga's Beach Front Land Surge Stunned By New Zoning Act

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Posted: 26 Jul 2010 | 9:05 am

One of Greater Phuket's most dynamic property markets of the past eight years has suffered a setback with the introduction of a new Ministerial Regulation which came into effect July 3.

Thailand's Ministry of the Interior has taken steps to cool off skyrocketing land prices and development of luxury villas and hotels in an area often referred to as 'over the bridge.' In this case the new Act is directed at the west coast area of southern Phang Nga province from Kok Kloy, Natai, Tah Sai, Bo Dan and Thai Muang.

With its close 15-20 minute driving distance from Phuket International Airport on wide roads and an expanding four lane Sarasin Bridge the prime area has been driven by property buyers who want absolute ocean front land, which is for the most part unavailable in Phuket.

Some of the area's most expensive luxury villas are located in the Natai strip including Jivana, Sava, California WOW fitness entrepreneur Eric Levine's mega residence. Boutique upscale resort Aleenta was an early arrival and high profile ongoing developments such as Similan Beach, A Ritz-Carlton Retreat and Richard Li's 1000 rai destination mixed use resort in Thai Muang have added glitter to the offering.

Under the new regulations a reduction in plot ratio's, restrictions on subdivisions and designations of large forest preservation areas and protected agricultural parcels looks set to impact large scale land speculation.

The Act has an effective period of 5 years and there remains speculation over whether Phuket itself could see new similar guidelines. In the short term in all likelihood the area will continue to attract million dollar villas and become more of a bedroom community for Phuket but certainly a critical mass of hotels and larger residential estates who are keen to enter the market will face challenges. Some sites such as Thai Muang who have substantial green areas will be able to cope with plot ratio issues more then small sized parcels.

Area's north of Thai Muang including Tap Lamu, Khao Lak, and Takuapa are not covered in the guidelines and may seen new land transactions as speculators move to other areas which have west coast ocean front land.

Leading international law firm Mayer Brown JSM has issued a legal update on the new Act that can be viewed at:

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The new code is about 20 years too late for the Phuket region but better late than never!

Mark Edleson, 26 Jul 2010 | 6:35 pm

Such expensive and luxurious villas are built by foreigners. The original Thai land owners most likely have sold their land more than 10 years ago and land ownership changed hands several times. Such villas generate no employment, except a local lady Villa Manager and sometimes a foreign butler. Unlike Laguna complex, also foreign owned, thousands are employed and substantial tax generated. Very few owners use these villas full time. They are leased out daily through exclusive foreign travel agents and web page. I guess no tax is paid because the villa is in individual name and most likely payment is made outside Thailand. The Thai revenue department should look into this matter. Many yacht owners leased out their vessels at a daily rate of up to USD 10,000 and more in the good old days. I wonder whether they pay tax to the Thai authority as they use our sea/islands and facilities. I counted at least 5 yachts floating in the calm sea between Cape Panwa and Ao Yon for many months, apparently so cash strapped that they prefer to float in the open sea rather than paying the steep marinas fees for safe berthing. The metamorphosis of foreigners visiting Phuket, 1. stunning natural beauty and true Thai earthy hospitality, 2. mass tourism, 3. foreigners settling down for the cheap cost of living and young women to rejuvenate their lives, 4. now expensive developments but poor morality and increasing crime rates. What will the future bring us? Right now, I have a Swiss family from Lucano visiting me. They told me on the luxury scale, Phuket is more expensive than Lucano and southern part of Italy where the cuisines and landscape is by far superior. This make you think!

Sint, 26 Jul 2010 | 5:38 pm