In all, 5.47 million – a third of total tourist arrivals to Thailand – visited the paradise island. From a seasonal tourist destination, Phuket has transformed as the word of its appeal has spread worldwide. Phuket is now a year-round holiday island with 70 per cent average annual hotel occupancy and Phuket International Airport handling as many as 287 international flights weekly. This increase in tourist numbers has not escaped the attention of investors either, with property prices increasing in recent years.

The Treasury Department's recent appraisal of land value shows land prices in Phuket have increased, on average, by 160 per cent in the past four years. Beachfront plots
on Phuket's west coast are now changing hands for between THB 21 to 50 million (£331,506 to £791,093) per rai (1,600 square metres), with the exception at Patong, which has recently achieved THB 200 million (£3,158,585) per rai. "Prices have started to rise as the demand for property has gone up," says Jay Walker, sales and marketing manager for The Village – Coconut Island, a development on an island off the coast of Phuket. "It's the market reacting to the demand." However, Walker urges investors not to get too carried away by expecting prices to continue rising at an exponential rate. "I believe that there will not be any more price rises for a good year or so now. Currently, you can buy something here in Phuket from £60,000 right up to £4 million, and everything in between."

So, where are the hotspots on the island? "The west coast will remain the place where many people buy, however now more and more buyers are looking at up market developments on the east coast and islands off the east coast. They offer something very different from the tourist centres on the west coast. There are not so many beaches but the stunning views and rolling green landscape are what many buyers are looking for." And what factors are likely to affect property prices in the years to come? "Government is the very simple and quick answer to that," notes Walker. Stories of the overthrow of former prime minister Thaksin Shinawatra (now chairman of Manchester City Football Club) and civil unrest have been well documented in the international media. Though investors should not believe everything is as bad as they read. "The signs are looking very positive," Walker continues, "and they have already started putting in polices to attract foreign investment. "Visitor numbers are also rising each year, which will mean there is more demand for resorts and so more chances for investors to jump on the old band wagon."

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Article published July 2008