It is November. It is the rainy season. It is wet. ‘Nuff said!
Donald Trump wrote a book entitled “The Art of the Deal”. As one of the most successful real estate developers in the world, he has had his ups and downs and proved the old adage that the more you owe the more you can borrow. When he was down on his last legs he owed various banks hundreds of millions of dollars. He arranged a meeting and said quite simply, you make me bankrupt and you will lose all the money you leant me or you can lend me more and I will get out of this mess – take your choice. They really had none, they gave him the money he needed and he climbed back to the top with some outrageously difficult but ultimately profitable schemes.
The main thrust of his book though was know your adversary, information is king, know the strengths and weaknesses of the other side and be prepared to walk away from a deal that is not right. “The Art of the Deal” was written from the perspective of the Principle, the decision maker, the man who controlled the money and who decided where and what was invested. An agent or broker still has to know how to make a deal but he is in a different position to the Principal in that he is the third party in a transaction and it is the job of the agent to bring two or more parties together to a conclusion acceptable to each side.
An Agent is “a person or business authorized to act on another's behalf”. The extent of that authorization is determined by agreement between the parties. As a Real Estate Agent we are authorised to offer properties for sale or to let on behalf of a Client. It is the Client who will pay our fee and it is the Client to whom we have the principal responsibility to negotiate the best deal on their behalf. This in no way diminishes our responsibility to the other party to provide accurate and honest information and not to provide misleading information. The extent of the authority an agent has can vary. Offering a property for sale is a basic and common relationship and usually evidenced by a simple contract or letter of appointment. At the other end, and I have been in this situation, bidding for a Client at an Auction requires far more.
A Sale at auction becomes legally binding on the fall of the Auctioneers Gavel. So if you have the winning bid, you need as an agent both a full Power of Attorney to sign on behalf of the Client and funds to pay the required deposit. Without this the agent would be legally bound to complete the sale himself. There is also an art to bidding at Auction for a Client. You will have specific instructions to bid up to a certain amount. You therefore must concentrate on the how the bidding is progressing and in what amounts. It is crucial that your last bid (if it gets that far) is the highest bid your Client has authorised, therefore you need to get into the bidding at a level that allows that last bid to be yours. For example, if the bids are increasing in £1,000 steps and your highest bid is say £50,000, then you need to be in the bidding no later than £48,000, preferably earlier but on the even numbers so when £49,000 is bid you can get your highest bid, £50,000, in next. Your Client would be very unhappy if you bid £49,000 and £50,000 bought it!
I was asked recently by a friend, who has been living part time on the island but who is now selling his house, to comment on an approach he had received from a “broker’ in respect of the sale of his house. The “broker” has a client who was interested in my friends house but the introduction to the house had been through two other people, one of whom he would have to share his commission with, the other would have to be taken care of by the seller, my friend. He did not disclose the name of the potential buyer, nor pass on any offer. His only concern was how much commission was the seller going to pay him and if it was not enough he would be unable to recommend the deal to his buyer. This is probably among the best cases of un-professionalism I have come across in over 35 years of working in international real estate. He forgot the first principle of this business – the Client comes first.
As an agent it is not our decision whether or not any offer is acceptable. Even if an offer is made that is derisory we have a duty to make that offer known to the Seller. We cannot know the personal circumstances of that person and however bad the offer is, it may just suit the seller to accept it at that time. Indeed a few years ago that precise situation happened to me. An offer was made on a property that was way below the asking price and below the real value. As a matter of course I informed my Client and to my surprise he told me to accept the offer and close the deal. His reasons were personal but the offer, as bad as it was, came at the right time for him and he has never regretted his decision. As an agent we still negotiate deals, but unlike “The Donald” we can only do so within the parameters set by our Clients, but must never forget that these parameters can change.
Saturday, 3 November 2007
Monday, 1 October 2007
News from Koh Samui for October
Statistics issued by the Association of Thai Travel Agents indicate a sharp drop in foreign tourist arrivals through Bangkok’s Suvarnabhumi Airport for the first eight months of this year. This may not be indicative of tourist arrivals overall as the figures do not include international arrivals into Koh Samui, Phuket, Chiang Mai and Krabi. What is interesting about the figures is that the main fall in numbers is from Asian countries such as China, Japan and Korea, the suggestion being that tourists from these countries are saving for the Olympic Games in China in 2008 which is an interesting concept to consider in relation to what will happen to tourism in Thailand next year. Major sporting events around the world are now so popular and well attended that they do appear to have an effect on the tourism of other destinations – sometimes positively. If I think back to the Rugby World Cup in 2003 which was held in Australia, there was no doubt that Samui and probably Thailand benefited as people travelled through and stopped over on their way there and back. Some even stayed here for the whole tournament as the television timing was friendlier than in Europe and it was considerably cheaper than going on to Australia. The Soccer World Cup in 2006 had the opposite effect with many people taking their vacations in Germany, although there was one group who found the cost of tickets so expensive that for the same price they flew out to Koh Samui for four weeks and still watched all the games in various bars around the island! So will the Beijing Olympics be good for Thailand or not? The implication from the statistics is that it will not, at least as far as other Asian tourists are concerned. However, the statistics also showed that there was an increase in tourists from Europe, in particular France, the UK and Russia. People are still travelling despite the hassle of modern airline security procedures and perceived political problems here, so will we see the same phenomena as we saw in 2003 as people travel to and from China, or will the Games and China itself be too attractive for them to take side trips? We must wait and see.
This year has seen a number of high quality hotels open, or announce their intention to open, on Koh Samui. This includes The Four Seasons which opened earlier this year on the north west peninsular, Banyan Tree due to open in 2008, Conrad in the south west, W in the north, Club Med in an as yet undisclosed location, although thought to be on one of the small islands off the south west coast, Park Hyatt in Tong Krut Bay due to open in late 2009 and word on the grape vine is that there are two more world class operators also about to announce their intentions. We are also working closely with a major hotel group in the acquisition of a property here and expect an announcement to be made early in the New Year. Koh Samui is without doubt becoming a major destination island and the hotel brands coming here are all the top of the range within their groups. Koh Samui is definitely going up-market and the constant moan is that the island has lost its charm. Well I would suggest that this may be true for the ageing backpacker who first came here 20 years ago, but for anyone coming here for the first time it still has a great deal to offer. Has the infrastructure kept up with development – well obviously not but it is slowly and gradually improving and it is the pressure of development that has made this happen. If all the houses and hotels that have been built over the last few years had not been built, there would have been no need to increase the electricity supply, address the water issue and, whether you like it or not, attract the likes of Lotus Tesco, Makro, Big C and Home Pro. When I first came here six years ago power cuts were frequent even before development started, many places relied solely on shallow wells with water of dubious quality. Shopping was a hit and miss affair with limited choice and poor quality. Since then a second electrical supply cable has been laid from the mainland a desalination plant built and a water ring main installed round the island. Obviously this has been of benefit to the tourist industry and business generally but it has also improved the living standards of the local Samui population, something that probably would not have happened without the pressure of development. Complaints are heard that Tesco, Makro and Big C are harming small supermarkets. The same supermarkets I shopped at six years ago are still here and where do they buy their stock? Lotus, Makro and Big C and at wholesale prices. So there have been many positives to the development that has taken place, but probably the biggest negative has been the effect on the roads with so many concrete lorries and construction vehicles continually on the move. The main roads are the responsibility of the Surat Thani Highways Department and anyone taking the ferry to Don Sak must wonder how they manage to build such a quality road from the ferry port into Surat Thani but cannot do the same on Samui. No one at any level of government has been able to answer that yet. Is Samui overdeveloped? Possibly in the short term in relation to current demand, but once the political situation has clarified itself after the General Election in December I believe that there is a large pent up demand waiting to come here. Is Samui over developed as an island per se? Take a boat trip round the island and look inland. I did this a few weeks ago and was quite surprised at the vast areas of totally development free land there – a great deal of course high in the hills under the control of the Forestry Department and therefore safe from development. Almost all the development that has taken place and is planned, with the exception of the Choengmon peninsular, is within one to two kilometers of the sea. There are indeed some eyesores that have appeared and I am sure that some judicial use of colour and/or landscaping would lessen their visual impact. The Local Authority has taken some steps in this direction by only allowing earth tone colours for roof tiles. The real estate market has taken a breather but it has not collapsed as some people thought it would. Sales are still happening if at a slower pace, but we have not seen any significant drop in values. Samui is definitely emerging as a high value resort destination and for those with spare cash, the Thailand Elite Card, details of which I can send you if you contact me by email, offers freedom from the hassle of border runs and visa renewals. Certainly not for everyone due to the cost, but for those with a high net worth who play golf and use spas and who are seeking an easy life – well worth considering.
A quick reminder if you are planning a trip to Samui in November – Loh Kratong falls on the 24th November this year. If you have never seen this before it is well worth planning your visit around this Festival where hundreds if not thousands of candle lit Kratongs are set afloat in the sea, on lakes and rivers. More details on that in a future Newsletter.
This year has seen a number of high quality hotels open, or announce their intention to open, on Koh Samui. This includes The Four Seasons which opened earlier this year on the north west peninsular, Banyan Tree due to open in 2008, Conrad in the south west, W in the north, Club Med in an as yet undisclosed location, although thought to be on one of the small islands off the south west coast, Park Hyatt in Tong Krut Bay due to open in late 2009 and word on the grape vine is that there are two more world class operators also about to announce their intentions. We are also working closely with a major hotel group in the acquisition of a property here and expect an announcement to be made early in the New Year. Koh Samui is without doubt becoming a major destination island and the hotel brands coming here are all the top of the range within their groups. Koh Samui is definitely going up-market and the constant moan is that the island has lost its charm. Well I would suggest that this may be true for the ageing backpacker who first came here 20 years ago, but for anyone coming here for the first time it still has a great deal to offer. Has the infrastructure kept up with development – well obviously not but it is slowly and gradually improving and it is the pressure of development that has made this happen. If all the houses and hotels that have been built over the last few years had not been built, there would have been no need to increase the electricity supply, address the water issue and, whether you like it or not, attract the likes of Lotus Tesco, Makro, Big C and Home Pro. When I first came here six years ago power cuts were frequent even before development started, many places relied solely on shallow wells with water of dubious quality. Shopping was a hit and miss affair with limited choice and poor quality. Since then a second electrical supply cable has been laid from the mainland a desalination plant built and a water ring main installed round the island. Obviously this has been of benefit to the tourist industry and business generally but it has also improved the living standards of the local Samui population, something that probably would not have happened without the pressure of development. Complaints are heard that Tesco, Makro and Big C are harming small supermarkets. The same supermarkets I shopped at six years ago are still here and where do they buy their stock? Lotus, Makro and Big C and at wholesale prices. So there have been many positives to the development that has taken place, but probably the biggest negative has been the effect on the roads with so many concrete lorries and construction vehicles continually on the move. The main roads are the responsibility of the Surat Thani Highways Department and anyone taking the ferry to Don Sak must wonder how they manage to build such a quality road from the ferry port into Surat Thani but cannot do the same on Samui. No one at any level of government has been able to answer that yet. Is Samui overdeveloped? Possibly in the short term in relation to current demand, but once the political situation has clarified itself after the General Election in December I believe that there is a large pent up demand waiting to come here. Is Samui over developed as an island per se? Take a boat trip round the island and look inland. I did this a few weeks ago and was quite surprised at the vast areas of totally development free land there – a great deal of course high in the hills under the control of the Forestry Department and therefore safe from development. Almost all the development that has taken place and is planned, with the exception of the Choengmon peninsular, is within one to two kilometers of the sea. There are indeed some eyesores that have appeared and I am sure that some judicial use of colour and/or landscaping would lessen their visual impact. The Local Authority has taken some steps in this direction by only allowing earth tone colours for roof tiles. The real estate market has taken a breather but it has not collapsed as some people thought it would. Sales are still happening if at a slower pace, but we have not seen any significant drop in values. Samui is definitely emerging as a high value resort destination and for those with spare cash, the Thailand Elite Card, details of which I can send you if you contact me by email, offers freedom from the hassle of border runs and visa renewals. Certainly not for everyone due to the cost, but for those with a high net worth who play golf and use spas and who are seeking an easy life – well worth considering.
A quick reminder if you are planning a trip to Samui in November – Loh Kratong falls on the 24th November this year. If you have never seen this before it is well worth planning your visit around this Festival where hundreds if not thousands of candle lit Kratongs are set afloat in the sea, on lakes and rivers. More details on that in a future Newsletter.
Friday, 7 September 2007
It's September in Koh Samui!
The new Constitution was approved at the Referendum on 19th August and the General Election has been announced for December 23rd subject to formal confirmation. It is anticipated and indeed hoped that a new democratic government will have a more realistic and pragmatic approach to the issues that have been creating lack of confidence in foreign investors over the last twelve months. There are many people with whom we are in communication all over the world and, with a few exceptions, most are deferring investment decisions until early next year. The indications are, that with a sensible resolution to foreign investment, Thailand, and Samui in particular, will not only recover but continue to flourish.
I received a phone call the other day from a rather nice sounding young lady in the UK. She worked for “the largest non-bank” foreign exchange company in England and would like to introduce me to the wonderful deals she could offer my clients on currency exchange. Not only did they get such wonderful exchange rates but there were no transfer charges. Well this was really interesting so I let her carry on with her sales pitch which was probably unfair because I knew how much of a sticky wicket she was on, but she did not. Eventually I had to ask her if she was aware that the Thai Baht traded at different rates onshore and offshore. No she did not but she was sure they could get a better rate in England. I asked her if she was aware that there was currently a 5 Baht difference in the two rates and that made a difference of £1,275 on One Million Baht? I asked her if she was aware that by transferring funds into Thailand in Thai Baht meant that you could not get a Foreign Exchange Transaction Certificate and what were the consequences of that? Of course she had no answer to this and said she had to check back with the trading desk and would get back to me. Of course she did not. The problem is that I am seeing more of these companies trying to persuade people to use their services on the promise of better exchange rates and free transfers. The reality is that in all my time here in Thailand I have always obtained better rates onshore even when the difference was marginal rather than the large gap we have now. As shown above it will cost you £1,275 more to buy one million Baht offshore than on shore. But it does not end there. The Foreign Exchange Transaction Certificate will be needed if and when you want to transfer funds out of Thailand without incurring any tax liability. It is the evidence you need to say ‘I brought this money in, and I can take it out!” Without the FETC the Revenue Department will assume you earned the money here and it is therefore taxable. FETC’s are only issued on amounts in excess of $US20,000 and consequently sending funds out of Thailand in amounts less than $US20,000 is generally not a problem but the original “Inward Transfer Advice” from your bank showing when funds arrived and how much should be sufficient to avoid any Revenue Department demands.
Big C Supermarket opened on 6th September as welcome competition to Lotus Tesco. I recall when Lotus Tesco first opened here it was really quite exciting as suddenly we had access to a much wider range of product than had previously been available in the local supermarkets. Sometimes we forget what it was like before they came, going from one supermarket to another to find what you were looking for. Of course the novelty wore off and the shortcomings of Lotus Tesco became apparent – supply chain problems, uninterested staff etc. Will Big C be any better? Let us at least hope some competition makes both companies a little sharper. Big C is located just south of Bandon Hospital on the Ring Road.
One good thing about Lotus Tesco was that it incorporated a Cinema and, whilst we do not get every major film release, those we do get we get at the same time as they open internationally which is not bad for a small island in the south of Thailand. Last month we had both “Rush Hour 3” and “The Bourne Ultimatum”. The theatres are modern and comfortable and for the romantics the back row has the “Honeymoon” seats, two large seats joined together. The row in front, Row A, is my preference as they have given extra leg room to the next row which allows you to stretch out in comfort. At Baht 140 a seat, good value. Coke and Popcorn Baht 80 a cheap couple of hours of good entertainment.
A quick reminder if you are planning a trip to Samui in November – Loh Kratong falls on the 24th November this year. If you have never seen this before it is well worth planning your visit around this Festival where hundreds if not thousands of candle lit Kratongs are set afloat in the sea, on lakes and rivers. More details on that in a future Newsletter.
For other Festivals around Thailand visit the Tourist Authority of Thailand website.
I received a phone call the other day from a rather nice sounding young lady in the UK. She worked for “the largest non-bank” foreign exchange company in England and would like to introduce me to the wonderful deals she could offer my clients on currency exchange. Not only did they get such wonderful exchange rates but there were no transfer charges. Well this was really interesting so I let her carry on with her sales pitch which was probably unfair because I knew how much of a sticky wicket she was on, but she did not. Eventually I had to ask her if she was aware that the Thai Baht traded at different rates onshore and offshore. No she did not but she was sure they could get a better rate in England. I asked her if she was aware that there was currently a 5 Baht difference in the two rates and that made a difference of £1,275 on One Million Baht? I asked her if she was aware that by transferring funds into Thailand in Thai Baht meant that you could not get a Foreign Exchange Transaction Certificate and what were the consequences of that? Of course she had no answer to this and said she had to check back with the trading desk and would get back to me. Of course she did not. The problem is that I am seeing more of these companies trying to persuade people to use their services on the promise of better exchange rates and free transfers. The reality is that in all my time here in Thailand I have always obtained better rates onshore even when the difference was marginal rather than the large gap we have now. As shown above it will cost you £1,275 more to buy one million Baht offshore than on shore. But it does not end there. The Foreign Exchange Transaction Certificate will be needed if and when you want to transfer funds out of Thailand without incurring any tax liability. It is the evidence you need to say ‘I brought this money in, and I can take it out!” Without the FETC the Revenue Department will assume you earned the money here and it is therefore taxable. FETC’s are only issued on amounts in excess of $US20,000 and consequently sending funds out of Thailand in amounts less than $US20,000 is generally not a problem but the original “Inward Transfer Advice” from your bank showing when funds arrived and how much should be sufficient to avoid any Revenue Department demands.
Big C Supermarket opened on 6th September as welcome competition to Lotus Tesco. I recall when Lotus Tesco first opened here it was really quite exciting as suddenly we had access to a much wider range of product than had previously been available in the local supermarkets. Sometimes we forget what it was like before they came, going from one supermarket to another to find what you were looking for. Of course the novelty wore off and the shortcomings of Lotus Tesco became apparent – supply chain problems, uninterested staff etc. Will Big C be any better? Let us at least hope some competition makes both companies a little sharper. Big C is located just south of Bandon Hospital on the Ring Road.
One good thing about Lotus Tesco was that it incorporated a Cinema and, whilst we do not get every major film release, those we do get we get at the same time as they open internationally which is not bad for a small island in the south of Thailand. Last month we had both “Rush Hour 3” and “The Bourne Ultimatum”. The theatres are modern and comfortable and for the romantics the back row has the “Honeymoon” seats, two large seats joined together. The row in front, Row A, is my preference as they have given extra leg room to the next row which allows you to stretch out in comfort. At Baht 140 a seat, good value. Coke and Popcorn Baht 80 a cheap couple of hours of good entertainment.
A quick reminder if you are planning a trip to Samui in November – Loh Kratong falls on the 24th November this year. If you have never seen this before it is well worth planning your visit around this Festival where hundreds if not thousands of candle lit Kratongs are set afloat in the sea, on lakes and rivers. More details on that in a future Newsletter.
For other Festivals around Thailand visit the Tourist Authority of Thailand website.
Thursday, 2 August 2007
Koh Samui round up August 2007
I know we Brits tend to talk too much about the weather but the first half of July was really very pleasant in respect of temperatures and we did not get too much rain. Some evenings were extremely pleasant – for us Europeans anyway. My wife did not agree and found it cold so I told her to do the ironing and that would warm her up. Apparently my food is likely to be as cold as the weather for a while.
I am pleased to say that after the last two months I am more positive about the future of the real estate market here in Samui than I have been for some time. Since the beginning of June we have seen more activity and concluded more deals than for a long time. Another phenomena has been the increase in visitors to our web site which has trebled since August last year and doubled since March of this year. This indicates that interest in Koh Samui is coming back and that people are starting to look again and in consequence of that we are now receiving more serious enquiries, mostly by email from people anticipating visiting the island over the next few months.
There has been much discussion over the last couple of years about the prospect of Koh Samui receiving City Status and the present Mayor is pushing very hard for this. Whilst it is true that Koh Samui now has the requisite 50,000 registered population, it does not quite meet the second requirement of density which is 3,000 per square kilometer. Koh Samui is roughly 525 square kilometers so only has a density of 95/sq km. Now this being Thailand you can guarantee there will be a way round this and one suggestion I have heard is that Koh Samui, Koh Phangan and Koh Tao could be made a Special Economic Zone, as Bangkok and Pattaya, which would have much the same effect. Nothing is likely to happen before the Election but watch this space!
The Buddhist Holy Day of Asarnha Bucha fell this year on Sunday 29th July. Asarnha Bucha Day is the day considered to be the birth of Buddhism, as the Buddha departed the location where he obtained his enlightenment two months earlier and then, coming to a forest area in the city of Pharansi, where he showed favour to five ascetics who became his followers. So this is a very Holy day in the Buddhist religion which is why bars are shut for that day and the day following the start of Buddhist Lent (Asarnha Bucha Day) is another important Buddhist Holy day called Khao Pansaa where the Monks traditionally retreat to the Temple at which they were ordained for three months during the rainy season. I mention this after the event because the longer you live in Thailand and the longer you have a Thai wife the more you learn about Thai culture and the ceremonies. Now let us say my dear wife has reached “a certain age” and as a consequence our joint ages are near enough to 100 so that we had to enact a special ceremony involving eels. Now before you let your imagination run away with you this all occurred in public in broad daylight. First we had to buy ten live eels each from Laem Din market after which we proceeded to the Chaweng Lake, fired up the joss sticks, said a few prayers and set the eels free in the lake. Apparently this is to bring us good luck and good fortune for the coming year. After the year we have just been through I think I will go back and set some more free today!!
Talking of bars closing last Sunday, I called one bar owner and asked where she was. She said she was in the bar. I asked if they were open then. Her reply “Just a little bit!” Such is Thailand!
A quick reminder if you are planning a trip to Samui in November – Loh Kratong falls on the 24th November this year. If you have never seen this before it is well worth planning your visit around this Festival where hundreds if not thousands of candle lit Kratongs are set afloat in the sea, on lakes and rivers. More details on that in a future Newsletter.
________________________________________
Do you have a question?
Do you have a question you would like answering on real estate in Koh Samui? Please feel free to email me directly and I will give you the benefit of my experience over the last 35 years in the international real estate business and six years in Koh Samui. I can answer you privately or, if the question is of general interest, I can publish the reply in this Newsletter – without naming you of course!
E Mail me at hbonning@kosamuiproperties.com
I am pleased to say that after the last two months I am more positive about the future of the real estate market here in Samui than I have been for some time. Since the beginning of June we have seen more activity and concluded more deals than for a long time. Another phenomena has been the increase in visitors to our web site which has trebled since August last year and doubled since March of this year. This indicates that interest in Koh Samui is coming back and that people are starting to look again and in consequence of that we are now receiving more serious enquiries, mostly by email from people anticipating visiting the island over the next few months.
There has been much discussion over the last couple of years about the prospect of Koh Samui receiving City Status and the present Mayor is pushing very hard for this. Whilst it is true that Koh Samui now has the requisite 50,000 registered population, it does not quite meet the second requirement of density which is 3,000 per square kilometer. Koh Samui is roughly 525 square kilometers so only has a density of 95/sq km. Now this being Thailand you can guarantee there will be a way round this and one suggestion I have heard is that Koh Samui, Koh Phangan and Koh Tao could be made a Special Economic Zone, as Bangkok and Pattaya, which would have much the same effect. Nothing is likely to happen before the Election but watch this space!
The Buddhist Holy Day of Asarnha Bucha fell this year on Sunday 29th July. Asarnha Bucha Day is the day considered to be the birth of Buddhism, as the Buddha departed the location where he obtained his enlightenment two months earlier and then, coming to a forest area in the city of Pharansi, where he showed favour to five ascetics who became his followers. So this is a very Holy day in the Buddhist religion which is why bars are shut for that day and the day following the start of Buddhist Lent (Asarnha Bucha Day) is another important Buddhist Holy day called Khao Pansaa where the Monks traditionally retreat to the Temple at which they were ordained for three months during the rainy season. I mention this after the event because the longer you live in Thailand and the longer you have a Thai wife the more you learn about Thai culture and the ceremonies. Now let us say my dear wife has reached “a certain age” and as a consequence our joint ages are near enough to 100 so that we had to enact a special ceremony involving eels. Now before you let your imagination run away with you this all occurred in public in broad daylight. First we had to buy ten live eels each from Laem Din market after which we proceeded to the Chaweng Lake, fired up the joss sticks, said a few prayers and set the eels free in the lake. Apparently this is to bring us good luck and good fortune for the coming year. After the year we have just been through I think I will go back and set some more free today!!
Talking of bars closing last Sunday, I called one bar owner and asked where she was. She said she was in the bar. I asked if they were open then. Her reply “Just a little bit!” Such is Thailand!
A quick reminder if you are planning a trip to Samui in November – Loh Kratong falls on the 24th November this year. If you have never seen this before it is well worth planning your visit around this Festival where hundreds if not thousands of candle lit Kratongs are set afloat in the sea, on lakes and rivers. More details on that in a future Newsletter.
________________________________________
Do you have a question?
Do you have a question you would like answering on real estate in Koh Samui? Please feel free to email me directly and I will give you the benefit of my experience over the last 35 years in the international real estate business and six years in Koh Samui. I can answer you privately or, if the question is of general interest, I can publish the reply in this Newsletter – without naming you of course!
E Mail me at hbonning@kosamuiproperties.com
Tuesday, 3 July 2007
News Round up from Koh Samui June 2007
The news has been fairly disjointed this month with nothing substantial worth commenting on. Mainly a lot of political in fighting following the dissolution of the Thai Rak Thai Party and the on going campaign against Mr T. who may or may not come back to Thailand to defend himself and whose safety the government say is guaranteed but the military say is not! In the UK we call this the silly season where the newspapers concentrate on the bizarre and odd stories that sell papers. I am not sure it quite works like that in Thailand and you get the feeling that the heavy hand of censorship is at work playing down the growing unrest at the present government. Certainly the rumours that we hear, and they are only rumours, are that the present economic limbo that Thailand finds itself in is at last being understood by those in power even if they do not know how to deal with it. However, those that do know what needs to be done and know how to do it are preparing themselves for power after the elections in December although it is now being reported that they might bring the Elections forward to November. We also “hear” that the lack of confidence and uncertainty surrounding the interpretation of the Foreign Business Act is very high on the agenda. Thailand still has a way to go to get back to normal but the indications are that this will happen, it may be a few months yet, but for those willing and able to hang on the future should be pretty bright.
For all the bad news that has been generated over recent months with regard to the economy and the FBA, we have seen an upturn in activity and June was probably our busiest month this year. There is no doubt that there are a lot of people out there who see this as a good time to buy real estate – and there are deals to be had with out a doubt – provided you get the legal niceties right. If the Newspaper reports are correct we appear to have a red carpet full of celebrities queuing up to buy property on Koh Samui. Sven-Goran Eriksson has bought and so has the world's No-1 female tennis player, Justine Henin. Now David Beckham has joined the list of possible purchasers with Wayne Rooney’s name being mentioned as well although we have it on very good authority that this is just one of those rumours that circulate here now and again. The list of five-star hotels wanting to be represented here is growing with Club Med also joining the list along with another internationally known brand we cannot name for confidentiality reasons that we are representing.
We are often asked about medical facilities on Koh Samui and in particular Dentists. From my experience in Thailand, Dental treatment here is not only cheap in comparison to Europe, Australia and the USA, but is also very good. Prices will vary between Clinics but as a guide a simple filling can cost as little as Baht 1,000, a Root Canal Baht 4,000 and Crowns between Baht 7,500 and Baht 15,000. Over the last five years numerous Dental Clinics have appeared and of course the Hospitals have their own. The only thing I would suggest is that you need some idea of what you want doing as there is a tendency for some Clinics to try and sell Cosmetic Dentistry on top of routine maintenance.
For all the bad news that has been generated over recent months with regard to the economy and the FBA, we have seen an upturn in activity and June was probably our busiest month this year. There is no doubt that there are a lot of people out there who see this as a good time to buy real estate – and there are deals to be had with out a doubt – provided you get the legal niceties right. If the Newspaper reports are correct we appear to have a red carpet full of celebrities queuing up to buy property on Koh Samui. Sven-Goran Eriksson has bought and so has the world's No-1 female tennis player, Justine Henin. Now David Beckham has joined the list of possible purchasers with Wayne Rooney’s name being mentioned as well although we have it on very good authority that this is just one of those rumours that circulate here now and again. The list of five-star hotels wanting to be represented here is growing with Club Med also joining the list along with another internationally known brand we cannot name for confidentiality reasons that we are representing.
We are often asked about medical facilities on Koh Samui and in particular Dentists. From my experience in Thailand, Dental treatment here is not only cheap in comparison to Europe, Australia and the USA, but is also very good. Prices will vary between Clinics but as a guide a simple filling can cost as little as Baht 1,000, a Root Canal Baht 4,000 and Crowns between Baht 7,500 and Baht 15,000. Over the last five years numerous Dental Clinics have appeared and of course the Hospitals have their own. The only thing I would suggest is that you need some idea of what you want doing as there is a tendency for some Clinics to try and sell Cosmetic Dentistry on top of routine maintenance.
News Round up from Koh Samui June 2007
The news has been fairly disjointed this month with nothing substantial worth commenting on. Mainly a lot of political in fighting following the dissolution of the Thai Rak Thai Party and the on going campaign against Mr T. who may or may not come back to Thailand to defend himself and whose safety the government say is guaranteed but the military say is not! In the UK we call this the silly season where the newspapers concentrate on the bizarre and odd stories that sell papers. I am not sure it quite works like that in Thailand and you get the feeling that the heavy hand of censorship is at work playing down the growing unrest at the present government. Certainly the rumours that we hear, and they are only rumours, are that the present economic limbo that Thailand finds itself in is at last being understood by those in power even if they do not know how to deal with it. However, those that do know what needs to be done and know how to do it are preparing themselves for power after the elections in December although it is now being reported that they might bring the Elections forward to November. We also “hear” that the lack of confidence and uncertainty surrounding the interpretation of the Foreign Business Act is very high on the agenda. Thailand still has a way to go to get back to normal but the indications are that this will happen, it may be a few months yet, but for those willing and able to hang on the future should be pretty bright.
For all the bad news that has been generated over recent months with regard to the economy and the FBA, we have seen an upturn in activity and June was probably our busiest month this year. There is no doubt that there are a lot of people out there who see this as a good time to buy real estate – and there are deals to be had with out a doubt – provided you get the legal niceties right. If the Newspaper reports are correct we appear to have a red carpet full of celebrities queuing up to buy property on Koh Samui. Sven-Goran Eriksson has bought and so has the world's No-1 female tennis player, Justine Henin. Now David Beckham has joined the list of possible purchasers with Wayne Rooney’s name being mentioned as well although we have it on very good authority that this is just one of those rumours that circulate here now and again. The list of five-star hotels wanting to be represented here is growing with Club Med also joining the list along with another internationally known brand we cannot name for confidentiality reasons that we are representing.
We are often asked about medical facilities on Koh Samui and in particular Dentists. From my experience in Thailand, Dental treatment here is not only cheap in comparison to Europe, Australia and the USA, but is also very good. Prices will vary between Clinics but as a guide a simple filling can cost as little as Baht 1,000, a Root Canal Baht 4,000 and Crowns between Baht 7,500 and Baht 15,000. Over the last five years numerous Dental Clinics have appeared and of course the Hospitals have their own. The only thing I would suggest is that you need some idea of what you want doing as there is a tendency for some Clinics to try and sell Cosmetic Dentistry on top of routine maintenance.
For all the bad news that has been generated over recent months with regard to the economy and the FBA, we have seen an upturn in activity and June was probably our busiest month this year. There is no doubt that there are a lot of people out there who see this as a good time to buy real estate – and there are deals to be had with out a doubt – provided you get the legal niceties right. If the Newspaper reports are correct we appear to have a red carpet full of celebrities queuing up to buy property on Koh Samui. Sven-Goran Eriksson has bought and so has the world's No-1 female tennis player, Justine Henin. Now David Beckham has joined the list of possible purchasers with Wayne Rooney’s name being mentioned as well although we have it on very good authority that this is just one of those rumours that circulate here now and again. The list of five-star hotels wanting to be represented here is growing with Club Med also joining the list along with another internationally known brand we cannot name for confidentiality reasons that we are representing.
We are often asked about medical facilities on Koh Samui and in particular Dentists. From my experience in Thailand, Dental treatment here is not only cheap in comparison to Europe, Australia and the USA, but is also very good. Prices will vary between Clinics but as a guide a simple filling can cost as little as Baht 1,000, a Root Canal Baht 4,000 and Crowns between Baht 7,500 and Baht 15,000. Over the last five years numerous Dental Clinics have appeared and of course the Hospitals have their own. The only thing I would suggest is that you need some idea of what you want doing as there is a tendency for some Clinics to try and sell Cosmetic Dentistry on top of routine maintenance.
Wednesday, 30 May 2007
Property News from Koh Samui in May
The most important news item and event this month has been the ruling of the Constitutional Court on the future of the Democratic Party and the Thai Rak Thai Party. There were fears of mass demonstrations and riots in Bangkok but despite the ruling exonerating the Democratic Party and banning Thai Rak Thai and nineteen officials for five years, the matter seems to have passed off peacefully, at least so far. Reports suggest that most people think the ruling is correct and indeed all the Thais I spoke to last night (both of them) thought this was good for the country. It seems far more likely that the elections scheduled for December will now go ahead as planned which has to be a good thing for everyone.
The South West Monsoon has arrived and inevitably we are getting a few rain showers coming through, some heavier than others but actually very welcome and as this is low season, just the right time. This is where Koh Samui beats Phuket during the summer months as they get the full force straight off the Andaman Sea and we just get the remnants which keeps things green and lush, fills the sub-aqua but is not so constant that you cannot get a sun tan!
I have been criticised by one or two local readers of my monthly Newsletter for including an article last month which included some misleading and incorrect statements. The criticism was possibly correct in as much as I did not add a comment disagreeing with the content but simply plagiarised it from The Nation. To set the record straight – there is no 150 metre rule on Samui and no one can name more than one of these foreign investors who have pulled out. The view of the market on Samui was also distorted and whilst no one can deny that things have slowed down, we are still receiving regular enquiries for both land and property on the island. My impression is that many people want to buy in Thailand and in Koh Samui in particular, but are unsure how to do this safely and legally. I expressed part of the solution in last months Newsletter and, whilst there are no public statements to support this, the grapevine suggest that the powers that be have at last realised that their proposals are not practicable.
The leasehold structure is certainly becoming more acceptable and Lynx Developments have been very successful in selling their townhouses in Choengmon on this basis. We have also in this last week concluded both a house sale and a land sale on long leases so it is not all doom and gloom as some people would like to think. In fact many people seem to be thinking that now is the right time to get into the market and some of the enquiries we are getting are for quite substantial areas of land or properties. In fact (and I am touching a lot of wood as I type this!) this last week has been as busy in the office as I have known it for a long time.
The concern of most people, as we have stated before, is what happens at the end of the initial 30 year lease period if the original landowner is no longer around for whatever reason? With a management company owning the freehold this is not really a big issue and is becoming an increasingly popular way to go. It is always when the freehold of the land is held in the name of an individual that the potential problem arises. As far as we are aware – and we have made enquiries – no renewal options against heirs of original owners after 30 years have been tested through the Courts – mainly because no leases are that old and it may be a good few years before they are. The positive side is that even under present law, provided the structure is owned separately, the landowner cannot simply take the property back without compensation, so there is good reason for them to grant a new lease.
Another issue was highlighted this month from two different people. One has his pension paid to him from the UK every month and he found that his last payment received in Thailand was Baht 7,500 (£110) less than usual. The bank were their usual unhelpful selves and blamed the difference on the routing through various different banks and charges at each stage. That is absolute rubbish! We have funds coming into our Clients Account on a regular basis and this does not happen. What actually happened was that the UK bank converted to Thai Baht before transferring the funds which even in the past was the wrong thing to do, but now we have an onshore and an offshore exchange rate and there is a 5 Baht spread. The Baht against the UK Pound offshore is about 63 whilst onshore it is 68. It is vital when transferring funds to Thailand to give clear instructions to your bank to transfer in your home currency and have the conversion made to Thai Baht here in Thailand. Even before the present disparity in exchange rates emerged this year, we always obtained a better rate on exchange in Thailand than overseas. The other main point is that for amounts over $20,000 you can get a Foreign Exchange Transfer Certificate issued by the receiving bank which you need to take the money back out of Thailand at a later date without problems. If you send the funds in Thai Baht you cannot get this certificate. The second case was a Client who was considering buying Baht offshore in respect of a considerable purchase here in Koh Samui. If he had done so the difference in the offshore/onshore rate would have cost him £31,000 and he would not have received the Foreign Exchange Transfer Certificate. Always buy Thai Baht in Thailand – not overseas.
In this months Newsletter you will read a couple of reports of buildings and cars damaged by fire. This came a little to close to home this month when we experienced an electrical fire in the cabling at the rear of our office. Luckily this was spotted quickly and extinguished before any serious damage was done to the building although it took a full day to restore power and we were off line until the next day so we apologise if there was a time when we were not responding as quickly as usual to your emails. However, it does make you realise how important insurance is, not just to have it but to ensure you have the right cover, correct insured amounts and pay the premiums on time. For those of you who know our building, the upper parts of which are timber, very dry timber, you can imagine how quickly the fire could have spread. The Koh Samui Chaweng Fire Station is on the Laem Din Road near to the Beach Road and so only a short drive away, but ten minutes might have been too long. Fire extinguishers are essential – we have two but only needed to use one. Dry powder makes a mess (ask our Maid!) but was very effective on this fire. The emergency number for the Fire Station is 199.
________________________________________
Do you have a question? Would you like to receive my Monthly Newsletter?
Do you have a question you would like answering on real estate in Koh Samui? Please feel free to email me directly and I will give you the benefit of my experience over the last 35 years in the international real estate business and six years in Koh Samui. I can answer you privately or, if the question is of general interest, I can publish the reply in this Newsletter – without naming you of course!
E Mail me at hbonning@kosamuiproperties.com
The South West Monsoon has arrived and inevitably we are getting a few rain showers coming through, some heavier than others but actually very welcome and as this is low season, just the right time. This is where Koh Samui beats Phuket during the summer months as they get the full force straight off the Andaman Sea and we just get the remnants which keeps things green and lush, fills the sub-aqua but is not so constant that you cannot get a sun tan!
I have been criticised by one or two local readers of my monthly Newsletter for including an article last month which included some misleading and incorrect statements. The criticism was possibly correct in as much as I did not add a comment disagreeing with the content but simply plagiarised it from The Nation. To set the record straight – there is no 150 metre rule on Samui and no one can name more than one of these foreign investors who have pulled out. The view of the market on Samui was also distorted and whilst no one can deny that things have slowed down, we are still receiving regular enquiries for both land and property on the island. My impression is that many people want to buy in Thailand and in Koh Samui in particular, but are unsure how to do this safely and legally. I expressed part of the solution in last months Newsletter and, whilst there are no public statements to support this, the grapevine suggest that the powers that be have at last realised that their proposals are not practicable.
The leasehold structure is certainly becoming more acceptable and Lynx Developments have been very successful in selling their townhouses in Choengmon on this basis. We have also in this last week concluded both a house sale and a land sale on long leases so it is not all doom and gloom as some people would like to think. In fact many people seem to be thinking that now is the right time to get into the market and some of the enquiries we are getting are for quite substantial areas of land or properties. In fact (and I am touching a lot of wood as I type this!) this last week has been as busy in the office as I have known it for a long time.
The concern of most people, as we have stated before, is what happens at the end of the initial 30 year lease period if the original landowner is no longer around for whatever reason? With a management company owning the freehold this is not really a big issue and is becoming an increasingly popular way to go. It is always when the freehold of the land is held in the name of an individual that the potential problem arises. As far as we are aware – and we have made enquiries – no renewal options against heirs of original owners after 30 years have been tested through the Courts – mainly because no leases are that old and it may be a good few years before they are. The positive side is that even under present law, provided the structure is owned separately, the landowner cannot simply take the property back without compensation, so there is good reason for them to grant a new lease.
Another issue was highlighted this month from two different people. One has his pension paid to him from the UK every month and he found that his last payment received in Thailand was Baht 7,500 (£110) less than usual. The bank were their usual unhelpful selves and blamed the difference on the routing through various different banks and charges at each stage. That is absolute rubbish! We have funds coming into our Clients Account on a regular basis and this does not happen. What actually happened was that the UK bank converted to Thai Baht before transferring the funds which even in the past was the wrong thing to do, but now we have an onshore and an offshore exchange rate and there is a 5 Baht spread. The Baht against the UK Pound offshore is about 63 whilst onshore it is 68. It is vital when transferring funds to Thailand to give clear instructions to your bank to transfer in your home currency and have the conversion made to Thai Baht here in Thailand. Even before the present disparity in exchange rates emerged this year, we always obtained a better rate on exchange in Thailand than overseas. The other main point is that for amounts over $20,000 you can get a Foreign Exchange Transfer Certificate issued by the receiving bank which you need to take the money back out of Thailand at a later date without problems. If you send the funds in Thai Baht you cannot get this certificate. The second case was a Client who was considering buying Baht offshore in respect of a considerable purchase here in Koh Samui. If he had done so the difference in the offshore/onshore rate would have cost him £31,000 and he would not have received the Foreign Exchange Transfer Certificate. Always buy Thai Baht in Thailand – not overseas.
In this months Newsletter you will read a couple of reports of buildings and cars damaged by fire. This came a little to close to home this month when we experienced an electrical fire in the cabling at the rear of our office. Luckily this was spotted quickly and extinguished before any serious damage was done to the building although it took a full day to restore power and we were off line until the next day so we apologise if there was a time when we were not responding as quickly as usual to your emails. However, it does make you realise how important insurance is, not just to have it but to ensure you have the right cover, correct insured amounts and pay the premiums on time. For those of you who know our building, the upper parts of which are timber, very dry timber, you can imagine how quickly the fire could have spread. The Koh Samui Chaweng Fire Station is on the Laem Din Road near to the Beach Road and so only a short drive away, but ten minutes might have been too long. Fire extinguishers are essential – we have two but only needed to use one. Dry powder makes a mess (ask our Maid!) but was very effective on this fire. The emergency number for the Fire Station is 199.
________________________________________
Do you have a question? Would you like to receive my Monthly Newsletter?
Do you have a question you would like answering on real estate in Koh Samui? Please feel free to email me directly and I will give you the benefit of my experience over the last 35 years in the international real estate business and six years in Koh Samui. I can answer you privately or, if the question is of general interest, I can publish the reply in this Newsletter – without naming you of course!
E Mail me at hbonning@kosamuiproperties.com
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