Chairman David Simister said the property market on the Andaman coast was recovering. Consequently, land prices have doubled from two years ago, when the tsunami struck the coastal provinces.

However, Khao Lak in Phang Nga is still suffering from the effects of the tsunami and is forecast to take two more years to recover. On the western side of Phang Nga, Phang Nga bay and Na Thai beach will be new locations for developers.

Simister added that Krabi had attracted more investors than Phuket thanks to land prices that are up to 50 per cent lower, depending on location. Prices in Krabi average Bt12 million-Bt20 million per rai, double those of two years ago.

He said Phuket no longer had prime locations for new developers. As a result, most developers have expanded their investment in Krabi and the western side of Phang Nga that was not destroyed by the tsunami.

"Demand for residential resorts by the Andaman Sea has grown strong, including Phuket, Phang Nga and Krabi. These locations are attractive for foreigners who have businesses in Southeast Asia, especially investors from the United Kingdom, Hong Kong, Russia and Singapore, who need a holiday resort in a tropical country," he said.

Following strong demand, developers from Europe and the United States are expanding their investments in these locations.

For example, Asian Tropical Homes - a joint venture between a Thai and a British firm - will invest more than Bt10 billion for integrated property projects, including hotels, resorts and condominiums. It is also building The Cove, an 18-hole golf course development designed by expert golfer Colin Montgomerie and located in Krabi province. Construction will start next year, to be completed in seven years.

Somluck Srimalee, The Nation