Phuket Post :: Article :: Island of the Gods versus Pearl of the Andaman

The jury is still out as to which destination, Phuket or Bali, is the best place for foreigners to invest in property. As I operate real estate offices in both locations, and have personal investments in both as well, I will try to give an unbiased opinion.

Historically, Bali has a bit of a head start. Tourism has been thriving on the Island of the Gods for over 35 years now. What began as a preferred backpacking and surfing destination along the beach-laden coast � with the artistically inspired migrating to the central region around Ubud � has developed into a more mainstream tourist destination attracting all levels of western society to its exotic landscape.

Bali�s 5,632sqkm has a base population of some 2.5 million people and attracts around three million touristseach year with 1.5 million coming from abroad and the rest from the domestic market.

Japan is the strongest market followed closely by Australia and Europe. There are over 150 accommodation establishments servicing this thriving industry.

Phuket, on the other hand, with 550sqkm (about one tenth the size of Bali) and a population of around 250,000 has been attracting tourists en masse for the past 25 years.

The pre-tsunami tourist figures indicate that around four million domestic and international tourists come to Phuket every year. Hong Kong and Taiwan contribute the largest Asian market share and there is also a strong contingent from Europe, mainly from the UK, Germany and Sweden.

So, despite the late start, Phuket has asserted itself as Southeast Asia�s most popular tropical island getaway with Bali close behind. There is no need for me to go into all the reasons why they are so popular, other than to surmise that apart from the obvious attractions of the beaches and the tropical climate, both places have a culture that greets tourists with open arms and warm smiles.

Add to this a growing infrastructure and a range of services that make it possible for westerners to reside on a permanent and semi-permanent basis and you have environments that are conducive to property booms.

To examine the differences in property design and construction between the two places one should first examine the origins. The strong art influence in Bali brought with it several international architects.

They set about evolving a �tropical design� that today has a worldwide reputation. Carved stone and woodwork and traditional alang alang (straw) roof designs characterise these properties, attracting many foreign buyers and adorning coffee-table books everywhere.

Indonesia has an abundance of stone and wood that allows building costs to be kept to a minimum. Also, Indonesian builders and craftsmen, who come mainly from Java, will work for salaries that their counterparts in the west would not get out of bed for.

The end result is that you can get a high quality finish for around US$350 per square metre. Property in Phuket also has traditional roots. The ornate roof designs are still very popular; however the wooden walls and flooring are now making way for cost-effective cement rendering and prefabricated tiling.

The higher cost of both raw materials and labour in Thailand result in high quality finishing costing around US$750 per square metre. Generally Phuket property prices are about 30 to 40% higher than in Bali. Based on these figures you could assume that Bali property would be more desirable, however current sales figures do not reflect this.

Phuket�s property market seems to have all but recovered from the effects the tsunami had on sales and obviously the second bomb in Bali is still impacting significantly on its property sales. But, if we look at sales generally over the past five years, Phuket is still marginally ahead.

Having talked with many prospective buyers on both islands, I have no doubt that investors feel more comfortable with investing their money in Thailand because it is perceived as having a more stable political, economic and social environment. Thus security, the most basic of our human needs, appears to be paramount in choosing which destination to invest in.

As far as infrastructure, facilities and amenities are concerned, I believe Phuket needs to take a look at what Bali has to offer to see ways in which it can improve. For a place that is experiencing such an influx of foreign residents and frequent visitors there is a lack of quality restaurants, cafes, food outlets and entertainment options available on Phuket.

Bali on the other hand has an abundance of these facilities. Even the middle of the road food outlets have a very sophisticated, cool appearance and some of the high-end establishments, like Ku De Ta, have developed international reputations.

For activities, both Bali and Phuket have internationally rated golf courses and spas and, while Bali certainly caters well for surfers, Phuket looks after the boat enthusiasts. In terms of family activities Phuket could again find improvement and take a look at Bali�s Waterbom (water park) and Bird Park for some ideas on how to expand its range.

However, there is no doubt that Phuket has better equipped and better serviced hospitals, which is something that people wanting to settle in these places rate highly. For schooling, I would rate both places on a par albeit Phuket�s British Curriculum International School enjoys the best reputation.

Geographically, both destinations have world-renowned features. Bali has its terraced rice paddies, spectacular volcanoes and deep river gorges and Phuket has pristine white sand beaches and the stunning Phang Nga Bay islands to set them apart from other �typical� tropical getaways.

So where should property buyers invest? For my money it comes down to personal preference. Bali is indeed a unique place; however the current political, economic and social status makes it difficult to feel secure about investing there.

Phuket has a green light and � trusting it deals with the infrastructure issues and is wary of over development � it is where I generally recommend my clients make their investment.

Michael Martin
Exotiq Real Estate
Tel. +66 76 270 376
www.exotiqrealestate.com