Ko Samui Properties February Newsletter

After nine years on Koh Samui I thought I had seen all of the attractions on offer – although I must admit not to have availed myself of some of the newer tourist facilities such as cable rides, paint balling and ATV rides. I even managed over the years to avoid the Bungee Jump! However, during a drive round the island on New Years Day we stopped at Wat Samret which can be found just off the ring road as you leave Hua Thanon and before you get to the Law Courts. It is sign posted down a Soi to the left. Drive straight down the Soi and enter the Wat grounds and park. Walk through and you will see the Wat on the right and a school ahead. Between the Wat and the school is a building set back and you need to find someone to open it for you. Inside you will find at least eighty Buddha figures – well I counted that many but the “key-holder” told us there were many more small ones hidden amongst the ones in view. A little hidden gem off the usual tourist trail.

One of my sources of information for this Newsletter is a regular email I received from Horst Meier who follows all the changes to the administrative districts throughout Thailand. A recent email included some interesting facts which if, like me, you do not speak or read Thai explain a few place names. I have included the full text below.

Social Marketing is the buzz word to day and whether we like it or not you have to play along to stay in the game. To this end Ko Samui Properties can be found on Face Book at_ http://tiny.cc/SSJEi Twitter at http://tiny.cc/4XaHA . Sign up to receive up to the date news on the market in Koh Samui including all the price reductions!

Koh Samui is not alone in seeing significant reductions in residential prices as an article I reproduce below shows that Singapore has also seen price reductions of 26%.

And property prices here continue to fall! If you check our web site and look at the Hot Press Offers you will see a great number of properties with prices that have been reduced from between 17% and 37% with an average reduction this month of 28%. These reductions are now beginning to produce sales and, although still not many, there are a few more buyers around than there were a few weeks ago. NEW REDUCTIONS EVERY MONTH!
See in particular the following properties – CTRL + click to follow the link:

6 Bedroom Hillside Ocean View House in Namuang – Baht 23,000,000
Now available at - Baht 19 million

17 bungalow resort in North of Nathon - Baht 49 million
Now available at - Baht 39 million

6 Bedroom Villa with pool in Taling Nam - Baht 35 million
Now available at - Baht 22 million



If you would like to receive a full copy of the monthly Newsletter, please send an email to hbonning@kosamuiproperties.com 

Koh Samui - Review of the year

Another year has flown by and as we enter the New Year may I wish you all the best of health and good fortune for 2010 and for the Chinese Year of the Tiger which starts on 14th February but more on that next month! 2009 is probably not an ideal year to reflect on as the world seemed to lurch from one financial crisis to another. A year ago I was talking about the new coalition government from which we hoped for great things. Whilst they have survived I am not sure we have seen any major strides forward and political disharmony still exists. Neither did anything come of the discussions at the time to extend leases from 30 years to 90 years. However the visit to Koh Samui by the Prime Minister did herald the release of funds to improve the roads and evidence of that can now be seen as the ring road is being surfaced with tarmac with the stretch from Hua Thanon through to Bophut almost complete. The picture on the left is the stretch of road between Bangkok Samui Hospital and out office. The one on the right is by The Cliff Restaurant on the way to Lamai and shows the new road lines. Much needed improvements to the drainage system are also in progress with the stretch of the ring road from Bangkok Hospital to just south of our office complete and also the section which always floods badly by the bridge next to the PTT Petrol Station also finished.

In March I first reported the signs of asking prices coming down and this has continued throughout the year and the sales that we have achieved have all been on properties where the prices have been reduced. There are buyers around but they are keenly aware that they have a lot of choice and a great deal of bargaining power. One Bangkok based agent with an office on the island (see report below) rightly says that there has been a slight increase in demand in the last quarter of the year but closing deals has been very difficult and time consuming.


The series of Jazz Concerts organised by Asiam Travel have been a great success and all well attended from the first three at the airport and then at Amari Palm Reef, Kandaburi and the last one at Chaweng Paradise Beach resort. There is no concert in January but the there will be one in February, brief details below and more information in next months Newsletter.


And property prices here continue to fall! If you check our web site and look at the Hot Press Offers you will see a great number of properties with prices that have been reduced from between 15% and 50% with an average reduction this month of 32%. These reductions are now beginning to produce sales and, although still not many, there are a few more buyers around than there were a few weeks ago. NEW REDUCTIONS EVERY MONTH!
See in particular the following properties – CTRL + click to follow the link:


Luxurious 5 Bed Villa with pool in tropical garden in Lipa Noi – originally Baht 53 million
Now available at - Baht 30 million




2 Bed house in Santi Thani – originally Baht 5.95 million
Now available at - Baht 2.95 million






3 Bedroom Luxury Villa with pool between Bangrak and Chaweng – originally Baht 49.5 million
Now available at - Baht 32 million




To receive the full version of the monthly Newsletter, please email hbonning@kosamuiproperties.com

Koh Samui Real Estate Blog

The long awaited improvements to Samui roads have at last started with tarmac being laid on the ring road starting just to the north of Hua Thanon and at the time of writing this Newsletter now going through Lamai. Much needed improvements to the drainage system are also in progress with the stretch of the ring road from Bangkok Hospital to just south of our office complete and also the section which always floods badly by the bridge next to the PTT Petrol Station also finished.

In the main section of the Newsletter you will find an article referring to the status of Koh Samui and the possibility of it becoming a special economic zone such as Pattaya and Bangkok. Samui was upgraded to a Town Municipality recently and it was never going to achieve City status as there was no way it could meet the criteria on population density. The status of Samui has always been a contentious issue with Surat Thani Province due to the revenue it produces, very little of which was retained by the island and people here could see the money being spent on roads on the mainland but nothing here. It always seemed to me that the way forward was through the special economic zone option and I commented on this in the August 2007 Newsletter. The new Town status has already produced results in greater funding for infrastructure improvements as mentioned above and becoming a special economic zone would give greater control on island finances.

I have always had an issue with the statistics provided by the Tourist Authority of Thailand. Firstly they are always so far out of date as to be nearly useless and there is no indication on how they are compiled. The latest set of figures which relate to Koh Samui are for the period April to June 2008. Every month I see information on arrivals in Hong Kong and Singapore for the previous month and from that it is possible to see the trend in tourism and travel. Statistics that are eighteen months old are of marginal use at best and from my own past experience of these not very accurate. Therefore be wary of any one quoting TAT statistics to you – they will be old and probably inaccurate.

I had further confirmation recently that Marriott have plans to develop another hotel on the island but that has been deferred until 2011.

And property prices here continue to fall! If you check our web site and look at the Hot Press Offers you will see a great number of properties with prices that have been reduced from between 15% and 50% with an average reduction this month of 32%. These reductions are now beginning to produce sales and, although still not many, there are a few more buyers around than there were a few weeks ago. NEW REDUCTIONS EVERY MONTH!
See in particular the following properties – CTRL + click to follow the link:

4 bedroom house in Bangrak with private walled garden and pool. Originally Baht 10.9m.
Now available at Baht 8.5 million.

2 bedroom Leasehold town house in Plai Laem – originally Baht 2.75 million.
Now available at Baht 2.1million.

3 bedroom house in Choengmon with pool – originally Baht 6.6 million.
Now available at Baht 3.9 million.

To receive a copy of the full monthly Newsletter please email hbonning@kosamuiproperties.com

How to sell properties in Koh Samui

The first question we are asked once we have inspected a property is “What is my house worth?” And therein lies an immediate issue. Worth to whom? In a normal market I would follow the guidelines of the International Valuation Standards Committee of the Royal Institution of Chartered Surveyors which states that Market Value is defined as ‘The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.’ Whilst I may have a willing buyer and a willing seller, the seller may be under a great deal more pressure to sell whilst the buyer may be under absolutely no pressure to buy. This is a buyers market and when offering a property for sale the expectations of the seller need to be established. Is there an urgent reason for the sale and do they have a time limit they are working to? We do get a number of sellers who just wish to move on and are in no particular hurry and will wait until the market improves. But for those people who need to sell quickly there is a different approach. The question that I ask is “What is the lowest price you are prepared to accept at this moment in time to achieve a sale?” This is no longer about getting the best price, this is about achieving a quick sale without the seller losing money if possible. Sometimes it isn’t – but that is a decision for the seller. Take into account the fees involved in the sales process and allow something for negotiation and that is the figure at which you go to the market.

Will this work? Absolutely. In the last six weeks we have applied this approach to two properties. Both sold within two weeks of going on the market. The sellers were happy because they achieved their objective in selling the property at a price acceptable to them and the buyers were happy because they had bought something which was good value. But I repeat – this is not about achieving the highest price – this is about achieving a sale in a very weak market.

For anyone interested in the convoluted mess of Thai politics, this article in the Bangkok Post last month may be of interest.

The NE Monsoon arrived last week with quite a bang early one morning with a massive thunderstorm right overhead. The low pressure systems that run in a string across this region have now moved south so I think we will be seeing the usual rainy weather for this time of year.

I have commented in all recent Newsletters about the fall in asking prices, and indeed in sale prices as these reduced priced properties are taken up. I have for sometime believed that this trend of 20-30% price reductions is not restricted to Koh Samui or indeed residential properties. This has been confirmed in a study by the RICS which shows that values in the commercial property market in Singapore have fallen by 30% in the nine months to June this year and office rentals declining by as much as 50% in some sectors.

And property prices here continue to fall! If you check our web site and look at the Hot Press Offers you will see a great number of properties with prices that have been reduced from between 15% and 50% with an average reduction this month of 33%. These reductions are now beginning to produce sales and, although still not many, there are a few more buyers around than there were a few weeks ago. NEW REDUCTIONS EVERY MONTH!

See in particular the following properties – CTRL + click to follow the link:

2 bedroom house in Bophut with communal garden and pool. Originally Baht 5.7m. Now available at Baht 4.5 million.

3 bedroom luxury villa between Chaweng and Bophut with pool – originally Baht 49.5 million. Now available at Baht 36m.

2 bedroom house in Bangrak with pool – originally Baht 9 million. Now available at Baht 6 million.

VAT, Language and Trouble in Thailand!

Value Added Tax (VAT) has been a fact of life in many countries for years and is gradually being implemented in many more. Thailand requires registration for VAT on any business the turnover of which exceeds Baht 1.8 million per year. Therefore when you first open a business you do not need to register until you reach that magic figure. Of course during that period you cannot reclaim VAT charged by your suppliers either. The implication of that magic number was highlighted recently with a couple of properties on which I was advising. Both small with relatively small incomes but which projections showed would grow over the next few months and exceed the registration limit.

I will give an example to illustrate the point. You have a Room Rate of Baht 1,000 per night. Your income one day reaches Baht 1.8 million. You are required to register for VAT. Your net rate suddenly becomes Baht 935. OK, so now you can set off suppliers VAT, but many are not registered themselves so the offset tends to be minimal. To maintain the status quo you have to increase your room rate to Baht 1,070 per night and in a climate where lack of tourism is putting pressure on room rates anyway, that may not be feasible. It not only affects your room rate but all your other income as well – food, drink and any other services you may charge for. Something of a dilemma but a bullet that has to be bitten at some point if you are intent on expanding your business.

It does not matter in which country you live but there is always amusement to be had when languages get mangled in translation. I was told a story recently of someone who received a phone call from his house maid that his cat had come home with its ears painted green. He instructed the maid to collar the cat – presumably to stop it straying. When he got home he found the cat had been painted with white gloss paint. The maid had not understood collar and thought he meant colour the cat. Let’s not get into the “use her common sense” argument. He now has the only bald cat with green ears on Samui. I had another amusing experience with someone very close to me. Driving in the car one night I had a CD playing with the Nat King Cole classic “Straighten up and Fly Right”. After a few minutes of listening to this she turned to me and asked “Why he sing about fried rice?” Work it out for yourself!

Last month the main topic of conversation was the unfortunate crash of the Bangkok Airways ATR at Samui Airport. One of the reports was from someone who had been listening to the Air Traffic Control transmissions at the time. If you want to know more about Samui Airport, the radio frequencies and look at the approach charts for pilots you can find all this on line here at this link. Or this one for detail from The Thai Flying Club.

The television documentary shown on Bravo in the UK and widely distributed on You Tube “Big Trouble in Thailand” has drawn mixed reactions, mainly critical from the Thai authorities. Having now watched four of the episodes the only one which in my opinion shows Thailand in a bad light is the incident with the jet-ski operator in Phuket. The rest show the tourists in a much worse light. I have never been to a Full Moon Party on Koh Phangan and have no wish to do so. I do know many people who have been there and it is clear that drugs are widely available. If the Police arrested everyone in possession of drugs there they would need a very large holding facility. Why then did the girl in the programme get pulled for a small amount of marijuana? She was lucky to get off as lightly as she did although it was obviously a very harrowing experience.

And property prices continue to fall! If you check our web site and look at the Hot Press Offers you will see a great number of properties with prices that have been reduced from between 15% and 50% with an average reduction of 37% during this last month. These reductions are now beginning to produce sales and, although still not many, there are a few more buyers around than there were a few weeks ago. NEW REDUCTIONS EVERY MONTH!

See in particular the following properties – CTRL + click to follow the link:

3 bedroom house in Bangrak with walled garden and pool. Originally Baht 15m. Now available at Baht 10.9 million.

2 bedroom bungalow in Plai Laem with pool – originally Baht 11 million. Now available at Baht 8.8m.

If you would like to receive the regular full monthly Newsletter from Ko Samui Properties, please send an email to hbonning@kosamuiproperties.com

Koh Samui Monthly Blog - Air Crash and Other News

The big topic on the island of course this month was the crash of the Bangkok Airways Krabi flight on 4th August at Samui Airport. We started getting phone calls to the office within a few minutes of this happening and as usual the information was confused and inaccurate. Being next door to Bangkok Samui Hospital we are used to the regular wail of ambulances sirens so that was not unusual in itself, just the frequency. As the facts became clearer – mainly through internet web boards – it was a tragedy that the pilot died but a miracle really that no one else did and that serious injuries were confined to so few people. One could be a little cynical and say that if you are going to crash, doing so next to the emergency services building is probably the best place to do it, but that takes nothing away from the excellent response of the ground services who quickly eliminated any risk of fire. Eye witness accounts state that the aircraft was on the ground some 300 metres down the runway when it suddenly veered to the left. A sudden gust of wind or brake failure – we must wait for the accident report to find out. A 5 minute video of the rescue operation can be seen here.

Many airlines suffer accidents and it is how they respond to that which is important. Bangkok Airways has an excellent safety record and despite regular criticism of their high prices to Koh Samui, the general opinion is that they offer an excellent service. Certainly in the aftermath of this accident they seem to have done all the right things in offering assistance to the passengers both injured and uninjured.

What also came out of this incident was the matter of copyright as demonstrated by the person who witnessed the accident from his house above the airport and within minutes posted a picture of the crashed aircraft on Thai Visa.com. See the article below re-printed below from Bangkok Bugle – with their permission I might add!

Rumours have surfaced again that Index are to open on Samui. My understanding is that if this is correct then it will be on the vacant land between Makro and Big C.

There are many tempting souvenirs in the tourist shops throughout Thailand but be warned many of the items offered are in fact illegal. Visit the TAT Web site to get detailed information on what NOT to buy. Click here! WHAT NOT TO BUY OR TAKE HOME WITH YOU

In the article reproduced below the Treasury Department are accused of setting land values on Koh Samui at too high a level. This relates to the table of values used by the Land Office and Tax Office to assess values for tax and transfer purposes. There have often been issues when registering the sale of land at the value stated at the Land Office which are always lower than the actual sale value. This is because the tables used were out of date and well below actual values. Technically you were supposed to register at the Table Value or the actual value whichever was the highest but that rarely happened. Registering at the table values meant lower tax and transfer costs. The re-valuation is an attempt to bring the set values into line with the market and whilst many people seem to be against this the values quoted are a great deal more realistic than those on the old tables of values. A comparison would be the old system of Rateable Values of houses in the UK where the RV was a stated number for a specific house and only re-assessed every ten years and taxes were charged at a standard multiplier.

And property prices continue to fall! If you check our web site and look at the Hot Press Offers you will see a great number of properties with prices that have been reduced from between 15% and 50% with an average reduction of 39% during this last month. These reductions are now beginning to produce sales and, although still not many, there are a few more buyers around than there were a few weeks ago. NEW REDUCTIONS EVERY MONTH!

See in particular the following properties – CTRL + click to follow the link:
4 bedroom house in Bangrak with walled garden and pool. Originally in excess of Baht 10m. Offers now considered.
4/5 bedroom house in Pang Ka with pool – originally in excess of Baht 20. Now available at Baht 13m.
And two more special properties featured at the end of this Newsletter.

If you wish to receive the full version of this Newsletter, please send me and email at hbonning@kosamuiproperties.com

Koh Samui Blog - golf, films and hotels

First of all congratulations to Robin and Sue at The Waterfront in Fisherman’s Village for achieving 56th place in the worldas reported by Trip Advisor Travellers Choice 2009 survey for Best Bargain hotels and 6th place in Asia! Also 9th place in Asia for Best Hidden Gems. Sala Samui Resort & Spa and Tongsai Bay made 9th and 10th respectively in the World in the Best for Romance category.

Samui is into High Season now and we must watch and see how the tourist arrivals stack up. Certainly some businesses are trying to encourage people to come to the island.

Bangkok Airways have their monthly Jazz Concerts at Park Avenue at the airport and now we have the 1st Annual Samui Film Festival – details of both are shown below.

Also this month we have the inaugural Queens Cup Golf competition at Santiburi Golf and Country Club from the 13th and the Press Release is included below.

An interesting comment from Centara Hotels reported below. It is a common assumption that in the bad times hotels must cut their rates to stay competitive and I have touched on this in previous Newsletters. Hotels certainly come out with attractive special offers on a limited basis so as to maintain their rack rates. If you read the article below Centara admit that the number of guest has fallen but they have maintained their rates and that their returns are still competitive. There have been studies within the hospitality industry, mainly aimed at city centre business hotels that confirm this, but it seems it applies just as much to resort hotels as well. It is very tempting to reduce rates in the bad times against the competitive set to increase occupancy but the study shows that this ultimately has a negative effect on the bottom line.

However you must also read between the lines. What are they not saying? Accor for instance have just announced a 9.3% drop on Revenue for the first quarter and 9% drop in sales for the second quarter. The consequences of that are reduced spending. The hotel group is cutting 2009 spending on renovating hotels by 170 million euros to 315 million, lowering support costs by 80 million this year and 45 million in 2010, and reducing operating costs by 120 million this year. Fewer guests mean fewer staff; renovation and improvements deferred which has a knock on effect to other industries. Everyone if tightening their belts and rightly so.

And property prices continue to fall! If you check our web site and look at the Hot Press Offers you will see a great number of properties with prices that have been reduced from between 15% and 50% with an average reduction of 34%. These reductions are now beginning to produce sales and, although still not many, there are a few more buyers around than there were a few weeks ago. NEW REDUCTIONS EVERY MONTH!

If you would like to receive the full monthly Newsletter, please email me at hbonning@kosamuiproperties.com or visit our web site at www.kosamuiproperties.com