Phuket land prices hit B60 million per rai in Bang Tao as developers seek new beaches

Land prices in Phuket’s Bang Tao area have risen to B50 million-B60 million per rai, while some beachfront plots exceed B100 million, prompting major developers to seek less expensive locations elsewhere on the island.

The shift is being driven by rising development costs, stronger foreign demand across Phuket and growing competition in the island’s property market, according to executives cited in a report by Thansettakij.

Sansiri’s managing director for southern project development said foreign demand was spreading beyond Bang Tao, with buyers placing greater emphasis on location quality and lifestyle rather than a particular neighbourhood.

The company is looking for land across Phuket, including Kata, Rawai, Surin and more private areas in the south. It has more than 10 land plots or projects being prepared on the island and plans to launch an average of five to six projects a year over the next five years.

The Sansiri executive said Phuket land prices had risen sharply over the past two years but that negotiations had become easier in some cases. Landowners facing uncertainty over urban planning could offer price reductions of about 10%-20% on some plots, he said.

“Land purchases must start with demand,” the executive said, according to the report. “Developers need to know what price customers can afford before calculating the appropriate land cost.”

Origin Property said Phuket had accumulated between 40,000 and 50,000 property units, increasing competition, particularly in Bang Tao. The company said land prices there had risen from about B10 million-B15 million per rai in the past to B50 million-B60 million currently.

Origin’s chief executive overseeing international-market business administration said the Bang Tao market had moved beyond the level the company considered commercially viable for some projects. The developer is therefore looking at Surin, Rawai and Kata, where land remains more affordable and demand from long-stay foreign customers is increasing.

Origin is targeting land costs of about B20 million-B25 million per rai. It has allocated about B500 million for additional land purchases over the next three years and aims to build a Phuket business portfolio worth B30 billion.

Patong is also being watched because proposed urban-planning changes could increase the Floor Area Ratio, or FAR, allowing denser development and more high-rise construction. However, Origin said some Patong plots had already risen to about B100 million per rai, meaning the potential benefits of the planning change were reflected in land prices.

Investment activity is also expanding in southern Phuket. Demand from new foreign customer groups, including people from Poland, Israel and India, has increased in Rawai and Kata. Sansiri is preparing a Rawai project on beachfront land with more than 50 metres of frontage, while Origin is expanding into low-rise and condominium projects across several areas.

Developers cited potential yields of 7%-10% on some projects and annual capital gains of about 15%-20%, but the rising cost of land is making the balance between development costs, demand and long-term potential increasingly important.