Krabi property market takes baby steps

Krabi

Krabi Province has the distinction of being home to Thailand’s oldest human settlement.  Even in prehistoric times people were attracted to this region’s diverse real estate offerings.

In the 13th century Krabi became a thriving sea port that saw traders from India, the Middle East and China – many who were so enamored with the area’s natural beauty and fertile soil they made it their home.

Today foreign investors and home buyers are starting to discover the charm of this dramatic and unique 4,709 square kilometer province located on the south western Andaman Sea coast, surrounded by provinces Phang Nga to the north, Nakhon Si Thammarat and Surat Thani to the east and Trang to the south.

The region’s appeal is easy to understand: Krabi is one of the most geographically stunning and ecologically diverse places on the earth with breathtaking, 1000-feet limestone karsts jutting from pristine rainforests and ancient mangroves.  The province also boasts one of Southeast Asia’s best marine-related activity areas with 132 tropical islands dispersed among some of the world’s top-rated dive sites and year-around safe anchorages.

Krabi government officials understand it is only a matter of time before the world discovers their province.  They’ve been gearing up for the arrival of new homebuyers for the past five years, beefing up roads, electrical grids and telephone, water and sewage systems.

The 2004 opening of The Krabi International Airport and the nearly completed super-highway – widening road access from Phuket, through Krabi, to the Malaysian boarder – shows that government at all levels consider Krabi to be Thailand’s hottest new tourism and long-stay destination.

However, according to local experts, the evolution of Krabi’s property market from a 80’s backpacker haunt into a true real estate market that compares and competes against Phuket, is still several years away.

“The main issue is transport and infrastructure – this is thought about by not only tourists, but short and long term visitors who have property which they should like to use”, says Desmond R L Hughes of Belmont Limcharoen, which has started to represent more clients in regions outside of Koh Samui and Phuket such as the Krabi. “An additional few hours can create a barrier to investment.”

Property agents in Krabi province also point to the lack of standard amenities that foreigners typically demand when choosing a second home location such as quick access to world-class beaches, international hospitals, schools, golf courses and shopping centers.

A good example of this is Koh Lanta where you’ll find the province’s highest concentration of foreign-targeted developments.  The Island is wonderland of white sand beaches and turquoise seas but getting onto the island is difficult. Currently passage onto Koh Lanta Yai involves two car ferries (or a passenger ferry in high season) which means the journey between the Krabi International Airport and Koh Lanta can take up to 4 hours - definitely a hard sell to travel-weary Europeans and Asian expatriates wanting instant, tropical gratification.
Despite these growing pains, demand from foreign buyers is strong according to Krabi’s real estate community.  However, finding worthy projects to recommend to potential buyers is proving to be difficult.

“There are very few quality ‘developments’ to buy in Krabi at this date,” says Pierre-Yves Loriers, from Ton Company, who created and built Baan Oriental Villa, Krabi’s first luxury Pool Villa project in Ao Nang Beach six years ago.  “For this reason people tend to develop their own project. It is more work but the return on the investment is much higher.”

But there’s no shortage of small, local developers looking for off-plan investors in Krabi province.  Locals recommend that buyers proceed with caution.

“Don’t be fooled by the large number of new developers selling ‘off-plan’,” says Jules Gore, Sales Manager of Exotiq Real Estate Krabi who is opening offices in Krabi Town and Koh Lanta later this year.  “Many of these projects are being ´developed´ by individuals with no development background.  Most never break ground.”

Duane Lennie is a 8-year resident of Koh Lanta and currently operates www.kolantarealestate.com

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