Koh Samui, Thailand – Opportunities in Real Estate Investment

Deborah K. Vick

Koh Samui, Thailand continues to yield interesting options for would be property investors. With the majority of Thailand real estate being purchased with cash, as bank finance being almost impossible to obtain, the underlying valuation of property and land is being maintained, although due to most investors being foreign investors with a portfolio of assets, there are now some nice prospects for those with investment capital who are ready to consider increasing their property portfolio.

For the medium term this Island and top 10 holiday destination continues to be a favorite investment centre for major branded hotels and spa resorts. Conrad Hotel and the recently opened Ibis are amongst several being built as this tropical Island continues to grow in popularity. There are also several luxury villa resorts being planned by major property companies, seeing a bright future in the luxury destination market. Popular destinations such as Chaweng, Cheong Mon and Bophut continue to attract vacationers from around the globe, despite the recent political troubles in Thailand.

The current world financial crisis in late 2008 has gives property buyers opportunities as several sellers are forced to reduce price to make a sale in these difficult conditions. There are several options available, both new off-plan and resale properties that now are providing buyers with significant cost advantages. The market now coming up to the high season is quite flat, with bargain properties appearing as sellers discount in order to stimulate interest.

We are seeing discounts by as much as 40% off some resale units where the owner is seeking to quickly release the cash in a property. One specific example of this is a four bedroom newly completed villa in Bang Makham, originally for sale for 25mThai Baht (715k US$), this has been discounted for quick sale at a little over 15m Thai Baht (429k US$).

Developers are realizing that to maintain and promote sales they must offer special discounted prices to offset the strong advances of the Thai Baht against a host of currencies (example: The GBP has fallen from 63 to 51 Thai Baht since September 2008, a drop of almost 20%). Developers and creative marketers are also promoting by adding in some creative financing plans, including sometimes extended payment terms over 3 years. Others are giving longer terms of up to 10 year private finance deals with down payments of 40% – 50% of the full purchase price.

Examples of one specific special promotions is new pricing being introduced by Samui Emerald Condominium at Plai Laem, Koh Samui, where they are actively promoting their first class product through sale of leasehold units, a 44sqm fully furnished unit can be bought for a little over 50,000 GBP (2,640,000 Thai Baht) at the time of writing this article. The foreign buyer in this case would need to set up a Thai company, in order to purchase one of these special units.

Take a look at Koh Samui, Thailand, whilst the market has some interesting opportunities available for the savy investor.

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