In the aftermath of the tsunami in December 2004, many tourists have switched from the Andaman coast to resorts on the Gulf of Thailand and property prices in some popular provinces have soared.

Increased attention from hotel chain operators and investors has driven property values on Koh Samui, in Surat Thani province, to Bt10 million from Bt1.5 million per rai and demand for hotel accommodations has surpassed supply.

A Surat Thani provincial treasury official, Suwanna Submee, said that following the tsunami, the province became crowded with tourists, which drove up property prices.

She said the appraisal office had surveyed both treasury and concession land, particularly that formerly used for tin mining, and plans are to develop these areas to add value to the land and to serve the province's growing tourism industry.

Suwanna said the office was planning to expand the survey to include Koh Pangan, a popular tourist spot for full moon parties, close to Koh Samui.

However, investment in Koh Samui is controlled mainly by foreign investors and hotel chains planning to set up hotels and resorts for foreign tourists, many of them from Europe.

Samui Tourist Coordination Centre head Panu Voramitr said there were currently 12,879 serviced rooms on the island, all of them booked in advance.

"There are about 30,000 tourists coming to the island, mainly from the EU countries, Scandinavia and Japan, who have shifted from the Andaman coast," he said.

Rising demand has led to complaints from tourists about high room rates and food prices, but more competition is expected to solve that problem in the near future, Panu said.

Meanwhile, property prices in Chiang Mai, one of the more popular tourist spots, and Lamphun remain unchanged due to negative factors such as rising oil prices and construction raw materials.

Vatchara Tantranont, president of Chiang Mai-Lamphun property traders association, said political turmoil was another factor slowing down property prices in the pro-vinces. Total investment in the property sector reached Bt10 billion last year.

Housing project developers have focused more on capturing foreigners who are interested in purchasing a second home in Thailand.

Channarong Boristrakul, president of property traders in Khon Kaen, said consumers have delayed purchasing homes due to increasing interest rates. As a result, their spending for home installment has increased by 20 per cent per month.

"The mortgage rate has increased from 3 to 5 per cent and has caused consumers to delay buying a home," he said.