Until just a few years ago, Koh Phangan, an island of the Gulf of Thailand located a few miles away from Koh Samui, was mostly known for its Full Moon party, a music event drawing tens of thousands of tourists once a month at the south-east tip of the island, on Haad Rin beach.

1. A major destination for digital nomads and health-conscious expats

Since the beginning of the 2010's an alternative crowd of remote workers - aka digital nomads - and health-conscious expats has started populating the island, concentrated mostly around the main boat pier and town (Thong Sala), the coconut fields of Srithanu and Hin Kong, and on the scenic hills of Haad Yao and Haad Salad.

While Koh Samui, with its international airport connecting it to Singapore or Hong Kong was becoming a hot spot for short-term and high-end tourism, Koh Phangan draw the interest of a less consumerist, slower and more environment-conscious tourism, articulated around quality cafes and restaurants, yoga centers and meditation retreats.

The outbreak of Covid-19, which pushed many urban dwellers to experience a new way of life, accelerated the island's mutation. A crowd of young and educated expats with higher purchasing power started flowing into the island, bringing about new businesses and projects to develop the until-then very basic local property market.

Koh Phangan's reputation grew worldwide, and the blogger William Russell, popular for his articles on travelling and remote working (aka digital nomadism), elected the island to be number 1 “workation” destination in 2022 and 2023.

William Russell highlighted the island's low cost of living, safety, high-speed and reliable internet connection, dynamic community, quality cafes and restaurants, and renowned party scene.

When the borders reopened, the new fame of the island combined with low property prices - notably compared with Phuket and Koh Samui – brought about a rush of investors from all over the world as well as a fair share of Bangkok-based Thai and foreign investors.

2. A property boom since the end of COVID-19

Since the beginning of 2022 and the reopening of the borders, land prices have increased 2 to 4-fold on most of the west of the island, where the sunset views with Angtong Marine National Park in the background are simply astonishing.

While it was possible to purchase 1 rai (Thai measurement standard equivalent to 1,600 square meters) of sea-view land on the west coast for about 3 million THB (80-85,000 USD) before COVID, as of February 2024 - in the heart of the touristic season - the minimum price for sea view plots of up to 1 rai is now 8 to 10 million THB, with Haad Yao having the most expensive plots in the island with a range of 9 to 15 mln THB a rai.

The most sought-after areas for land investment are Hin Kong - Sritthanu (mostly flat area filled with both local and fancy bars and restaurants), Woktum (close to the main pier), Haad Yao and Haad Salad (high hills offering arguably the most stunning sunset views together with a typical jungle feel). The north of the island, comprising Thonglang, Chaloklum (a charming fisherman's village with plenty to offer) and Haad Khom, is quickly catching up too.

As the demand for land soared, several developers launched villa projects that are now for the most part under construction.

Sense Property Koh Phangan, a branch of the Bangkok-based real estate broker Sense Property Group, recently completed a market survey of existing villas and villa projects. Budgets range from 10 to 15 million THB for a 2-bedroom with sea view and from 15 to 30 million THB for a 3 or 4-bedroom villaalready built or sold before construction. The price is much lower if there is no sea view, with prices starting as low as 7 million THB for a 2-bedroom and 10 million THB for a 3-bedroom.

Given the limited number of projects with completed show units, we have observed a soaring demand for resale villas. A typical 3-bedroom villa on a sea-view plot of about 1,000 sqm now goes for 20 to 30 million THB, and the limited supply means prices should continue increasing in the next few years. See our properties here

For investors with a budget above 30-35 mln THB (about 1 million USD) the preferred path is to purchase a plot of land and hire a reputed architect and construction team to customize their own villa. It is notable that several individual projects of 600 to 2,000 square meters of built-up area under way on the hills of Haad Yao – which offer the island’s most stunning sunset views, with a project value of 30 to 100 million THB apiece.

3. How to and why own a property in Koh Phangan?

The majority of the off-plan projects and resale villas are sold “freehold”, i.e. with a title deed attached to the property. This outright ownership requires to purchase the property through a Thai registered company, either by buying the shares of an existing company or setting up one, or a Thai nominee. A few are sold “leasehold”, meaning that instead of owning the property the buyer registers at the local land office (equivalent of the notary public) a lease of up to 30 years with the owner of the land. Sense Property can advise you on the best process to purchase a property in Koh Phangan depending on your personal situation and objectives.

While the main reason for investing in Koh Phangan is the natural attraction this island exercises on its visitors, it is mostly ignored that completed villas in good locations are generating very attractive rental yields, thanks notably to remarkably high occupancy rates – often above 80% - thanks to the short low-season periods (Mid-May to end of June and Mid October to Mid-December) compared to all other beach destinations in Thailand.

Hence, even with reasonable nightly rates, villa owners often achieve annual net yields of over 10% and can still enjoy their property a few weeks every year.

A condition to achieve high yields is to select a reputable management company. Our team of experts would be delighted to assist you with your project and answer any questions you may have. Contact us by email contact@senseproperty.com or by phone +66 (0) 2 005 12 59.

Sources :

https://phanganist.com/koh-phangan-digital-nomads-travel-guide-koh-phangan-life-article/digital-nomad-guide-koh-phangan
https://cryptosavingexpert.com/story/selling-the-dream-cryptocurrency--digital-nomadism-in-thailand