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Samui Property File
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My first trip to the holiday island of Koh Samui was back in 1985 when the backpacker scene was in full swing and accommodation comprised a few strings of bungalows along Chaweng and Lamai beaches, and a few others hidden away in more remote locations. There were no big hotels on the island then, no airport, and a non-existent expat property scene, except perhaps for a few savvy souls starting to build their retirement homes. Things have changed quite dramatically in the intervening years, and on a recent trip to the island I called in to the offices of leading property developer, Sabai Properties, to find out the current state of affairs. |
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I spoke with their director, Lawrence Fay. He explained that the first backpackers appeared on the scene about 35 years ago. This steady stream of holidaymakers having discovered their perfect tropical idyll inevitably led to the growth of bungalows, bars and restaurants whose owners were predominantly natives of Koh Samui. As word of Samui's great beaches and laid-back lifestyle spread fairly rapidly among the hippie population of the 1970s, more and more trippers travelled on the short ferry-ride from Don Sak pier in Surat Thani, and more and more bungalows sprung up to accommodate them. The native population of the island was joined by entrepreneurs from Surat Thani, on the mainland, and neighbouring Nakhon Sri Thammarat, in order to cater to this enthusiastic flood of holidaymakers. The advent of Bangkok Airways' building of Ko Samui airport in 1989 was a turning point for the island. It marked not only an increase in the amount of traffic to the island, but also in the classification of that traffic. In short, the airport enabled the well-heeled to travel to the island speedily, and in comfort. This situation was not lost on the regional property tycoons, who began building hotels to cater to this new breed of tourist. Today there are five or six 5-star hotels on the island, with three or four more having purchased land for development. This top quality accommodation obviously attracts the well-heeled Asian and expat travellers, who not only enjoy their holiday on the island, but also view it as a place to invest in. The property boom on Samui is well under way, and looks set to continue with the opening of the Santiburi golf course, in the north of the island, later this year, and another two possibly in the planning stage. The backpacking brigade still travels to the area, but having been economically squeezed out of Koh Samui, now finds its haven on neighbouring Koh Phangan. The infrastructure on this smaller island is insufficient to woo any of the big hotel chains - yet.
For sure, Samui island is growing very fast. In many respects it is mirroring the recent exponential growth of Phuket. As a bellwether, Tesco-Lotus opened on the island last November, and Big C is due to debut within two years. The second Koh Samui Regatta will be held in April, and both government and private marinas are on the drawing board. Khun Lawrence feels quite sure that while the island's growth currently lags that of Phuket, its growth will continue as Phuket's begins to slow to more reasonable proportions. Although Thailand's third largest island, it is relatively small at around 21 by 25 kilometres. It can be considered very simply as an inaccessible central mountainous area with many beautiful beaches around the perimeter, joined by one ring road around the island. Consequently, the amount of land available for purchase to those seeking to build is relatively little. So, what's happening, where's it happening, and what's the cost? Well, for starters, you'd now be very lucky indeed to find any land available for purchase in the beach areas of Chaweng and Lamai on the east coast. Even short leases here, if you can get them, are exceptionally expensive, and not likely to attract the average punter. Another area, now somewhat off limits to newcomers, is the area around the Fisherman's Village in Bo Phut in the north. The locals here are trying to preserve the old-world feel of the place, and are reluctant to sell their land . At the other end of the scale are the relatively desolate areas of Bang Por in the northwest and Ban Taling Ngam in the southeast, though Lawrence feels these areas must inevitably catch up with the overall pace of development. It is now almost impossible to buy a small, accessible, seafront plot on the island. They are all either bought or are being wisely guarded by their native owners. There are, however, some large (10 rai or more) plots still available. If you can find a smaller plot of around one to three rai, then you'll be looking at around 10 - 20 million baht per rai. The coast road largely dictates the price you'll have to pay. Whether the road is 15 or 500 metres from the sea, the price will be much less on the landward side. Even inland, prices will vary a lot according to the access and available infrastructure. As a guide, for land with reasonable access and infrastructure, you'll be looking at one to five million baht per rai. Further inland, a plot with little or no infrastructure and no sea views may go for as little as 100, 000 baht per rai. Clearly then, whatever your budget, if you're thinking of making a purchase, it'd be sensible to seek the advice of one of the existing property developers on the island.
Two of the larger property developers are Coconut Land & House, with seven beachfront projects totalling over 50 Thai-style holiday homes available for sale or rent, and Coco International with a large beachfront project of around 50 houses in Bo Phut in the north. The latter houses will sell in the range of 300, 000 to 500, 000 US Dollars. Apart from these projects, a few separate "mega villas" - a luxurious house in about five rai of land, with pool, tennis court, etc. - are appearing on the hillsides further inland, yet still with sea views. A large number of smaller housing projects are popping up all over the island. These are two- to four-bedroom places, often in individual communities of around 9 - 15 houses. These are priced in the two to five million baht range. A number of other buyers are typically putting up four houses on a three-rai plot, keeping one and renting out the others. These relatively small projects are successful because of the burgeoning rental market on the island. The island does have its own supply of concrete, but all other building supplies must come over by ferry from Surat Thani. The two ferry services now operating are "fantastic", according to Khun Lawrence, and despite the ferrying of supplies, this does not add much to the cost of raw materials and other items. Those planning to take their cars over on the ferry will be very pleased to know that queues are currently minimal. This was not the case a year or so ago. On the rental scene, a "typical" two- to three-bedroom house with driveway and garden will cost you around 15 - 20, 000 baht/month. Something slightly more grand, with a pool, will cost you 30 - 40, 000 baht/month. By stark contrast, a one-night stay in a luxury house with its own pool, maid, chauffeur and five-star service - such as will shortly be available at the Sabai Thani development between Bo Phut and Big Buddha beaches - will set you back a cool 30, 000 baht per night. Ouch! So much for a quick overview of today's property scene on Koh Samui. But who's buying? It'll come as no surprise that the largest group seeking high-end properties are expats living and working in Asia. These are predominantly Europeans, but with a sprinkling of Americans. Those seeking properties in the low-ish range of two- to four-million baht are coming to set up businesses or to retire. Thais represent a minority, at present, as they tend to go for the golf-course projects in Hua Hin, Pattaya and Phuket. Of course, with the promise of an improved golfing scene on the island, this situation may well change.
The Chinese currently view Koh Samui as a place with great potential, both as a holiday destination and as a place in which to invest. The Chinese market has opened up considerably in the last two years, as they enjoy Thailand's hospitality and its return on investment. Sabai Properties is currently seeing phenomenal interest from this group. The island is gearing up to receive a lot of Japanese. A number of the larger hotels already employ Japanese Guest Relations Officers in anticipation of the arrival of some eager golfers later this year. Australians, and to a lesser extent, New Zealanders, are another group now arriving in greater numbers. Because of the Bali atrocity last year, and because Koh Samui is seen as having a Bali-like charm, the Australian tourist industry is now promoting Samui as a holiday destination. It goes almost without saying that as more people discover Samui as a holiday destination, then more will think in terms of spending extra time there on business or for retirement. So even though the bad news, for some, is that Koh Samui is developing very fast, the good news is that the Thai government does have control of the situation. Restrictions are in place with regard to building close to the shore and the allowable height of structures. These restrictions, happily, are not currently being abused, and my erstwhile informant felt that this would remain so. |
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Tropical Living: May 2003, Volume 2 Issue 12 |
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