Considered a slacker in the paradise-island business, Ko Samui is quickly becoming a favourite of affluent property hunters.
An island that was isolated until the late 20th century and without roads as recent as the 1970s (story has it that it takes an entire day to trek from one side of the island to the other through its mountainous, densely forested interior), Ko Samui might be considered a late bloomer in the paradise-island-tourism scene.
Ko Samui’s backstory may sound a bit The Beach-esque. In the 1970s, adventurous Western backpackers aboard rafts stumbled upon an unspoilt tropical paradise. Word got out eventually. By the 1980s tourists began arriving, first in trickles, then in hordes. When the island’s only airport opened in 1989, its tourism industry made a staggering turn. It is now Thailand’s second most popular island destination, after Phuket, and it has much more to offer in terms of property investment. Being a resort island means vacation homes are the bread and butter of Ko Samui’s property market. And here buyers are spoilt for choice.
According to Harry Bonning, managing director of Ko Samui Properties, the island’s vacation-home market generally falls into four main categories: high-end luxury hotels, middle range hotels, budget hotels and private villas.
He said that the upper end of the market has traditionally performed well, due in part to the lack of low-cost airlines flying into Samui. Hence the island’s main visitors are pretty much cashed up.
In addition, luxury private villas continue to attract good occupancy and there are now a number of specialist companies providing both management and marketing services on the island, said Bonning.
At present, there are a number of high-quality villas currently available in various locations on Ko Samui, from beachfront to ocean view, from the quieter south and west to the busier areas of Chaweng, Lamai and the Bophut Hills. However, as vacationing people want to be simultaneously near a beach and not too far from a decent selection of restaurants, the beaches of Chaweng (through highly commercialised) and Lamai and the relatively tranquil Choengmon are ideal destinations for vacationers. Consequently villas within easy reach of these locations tend to attract both higher rates and higher occupancy. Another good investment option, according to Bonning, is some of the managed developments, especially where the developer lives on site and takes a personal interest in the day-to-day management.
Although infrastructure problems have pestered Ko Samui for many years, the Thai government is looking into ways to address these. One recurring criticism of the island is the monopoly of Bangkok Airways to air travel and the consequent comparatively high price of air ticket to the island. As building a second airport may not be feasible, a study suggested that an airport at Don Sak on the mainland, just a short boat ride away to the island, may be a better option.
According to Bonning, additional funds have also been injected to boost its image, such as a THB20 million tourist information centre, a THB40 million flood prevention project, and a THB13 million environmentally friendly garbage disposal project, among others. These are in addition to current road drainage and resurfacing projects already in hand, and a new transformer station and transmission cable from the mainland to cover supply issues for the foreseeable future.
The most significant event on Ko Samui according to Bonning was the government’s decision to upgrade its status into that of a city, which significantly increased its tax revenues. Slowly the island’s infrastructure is improving. High-speed internet is available in almost all areas. Global hotel chains, too, have taken notice. Starwood will open the 80-room Vana Belle in January, while Mövenpick will unveil its 81-room property later in 2013.
THINGS TO CONSIDER
Bonning advises prospective buyers to look at investing in a Samui property the same way they should treat any investment.
- Be clear on the reason for buying. Is it purely investment, a vacation home with holiday lettings, or for retirement?
- Be sure you know where you want to be. Bonning often recommends that someone come to live here with a view to buying and should rent for at least six months to get a better idea of where they want to be and if indeed island life is for them.
- Commit for at least 5 years. Buying and selling in a short period of time will usually lead to a loss.
- Understand the visa requirements to ensure you can make full use of your property as and when you need to.
- Practise due diligence. You cannot do this without a lawyer and there are some good ones on Samui. Do not choose the cheapest. Talk to two or three and decide with whom you are comfortable.
Bangkok Airways is the main carrier that serves Ko Samui. It has regularly scheduled flights from Bangkok, Chiang Mai, Krabi, Pattaya, Phuket, Hong Kong, Kuala Lumpur and Singapore. Other airlines that fly to the island include Firefly, a subsidiary of Malaysia Airlines (Kuala Lumpur), Silk Air (Singapore) and Thai Airways (Bangkok).
A budget option is to fly AirAsia from Bangkok and Kuala Lumpur to Surat Thani Airport (on the mainland), then take a bus to Don Sak and finally a ferry from Don Sak to Ko Samui. Two ferry companies, Raja Ferry and Seatran, provide regular service to Ko Samui from the piers in Don Sak. However, plan your itinerary well as it will take at least two hours to get from the airport to the piers at Don Sak.