Land prices in southern Thailand have jumped by as much as 85% to 90%, according to a recent report released by the Thailand Treasury Department. The mean increase of property values in the southern areas of Thailand over the last year has been 85.79% which is a large jump especially when compared to the nationwide mean increase which is a lot smaller at 26.9%.
This is especially interesting in light of the fact that property values in the capitol and major Thai city of Bangkok have only experienced a mean increase of 5.76%. While it is an interesting duality, at the same time it is partially explainable by the fact that property values in Bangkok were already much higher than those in the rural south, with many properties in Bangkok being valued at 500 to 1000 times the price as properties in similar size in the south.
However, the increase in property values has also come at the same time as an increase in the general strength of the baht. The baht is the main currency of Thailand and over the last five years according to data mining efforts on the part of different companies the baht has experienced a 20% increase in value.
While the increase in value and the growing economy is good news to the average person in Thailand, it is probably not that great a news piece for someone that had been considering investing in the Thailand property market. Foreign property investments have gone down recently as the double whammy of increased property values and a stronger baht currency (especially in contrast to a severely weakened American dollar) has resulted in a dramatic drying of foreign investment into the country’s property market.
This has prompted many developers, such as Japanese developers making up the Saha Group, to decline investments in building up foreign investment property markets in favour of expanding their holdings within areas more likely to be owned domestically.
According to Group president Yasuo Myiazaki, even though the number of foreign investors has gone down, "…foreigners' purchasing power remains strong and residential prices in Thailand are lower than those in other neighbouring countries."
