ABC’s for Property Buyers in Ko Samui: By Harry Bonning (interview)

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Ko Samui is one of the most popular islands when foreigners decide to visit or relocating to Thailand.

With a population of almost 65,000 people, it’s still fairly big for being just that, an island. Just making a comparison, in Hua Hin (which is a city 2-3 hours away from Bangkok) you have 85,000 and in Phi Phi Islands 2,500.

Previously relying on fishing and agriculture, exporting many coconuts, the tourism industry has taken over since the 80’s.

In this interview, Harry Bonning from Ko Samui Properties tell us a bit more about Ko Samui’s property market and other useful information. The Real Estate agency is one of the most reputable and has helped many foreigners to buy property in Ko Samui.

Harry has been on the ground for years and provide fruitful advice if you plan to buy property in Ko Samui.

Harry, thanks for having you here. Can you please tell us about your background and current business in Ko Samui?

I have been a Chartered Surveyor since I qualified in the UK in 1974 and have worked in the UK, Germany and Abu Dhabi with responsibility for a large portfolio of property in the USA, owned by a Sovereign Wealth Fund.

I have also worked subsequently as General Manager of a portfolio of properties owned by one of the local families before moving to Thailand in 1999.

I saw an opportunity in 2000 for a professional real estate agency in Koh Samui and for the first seven years we were extremely successful. The economic crash of 2007/8 brought the market to a standstill for a time and we reduced our staffing accordingly to correspond to the reduced demand.

In Phuket, the property market relies heavily on foreigners and prices aren’t predicted to increase significantly in the coming years. How has Ko Samui’s real estate market performed and what’s your view on the coming years?

As stated above the market in the early days was extremely active but after the crash it slowed considerably.

One of the big impacts was the devaluation of currencies which in some ways was beneficial, as sellers could reduce their prices in Baht to reflect this. That’s why you will see many properties being offered at reduced prices. However, that is only part of the story as prices were already inflated after the boom years.

I have seen prices for resale properties fall by an average of 20% over the past couple of years and some properties are still catching up on that fall and chasing the market down.

I believe the resale market generally is unlikely to fall any further. The big competition though are the new developments of which there are many, mostly aimed at the Chinese market who are not really interested in older properties. Certainly these developments are selling well but they are taking money away from the resale market.

I believe that now is a good time to buy if you are careful and have a long term view – by that I mean 5 years plus.

The majority of buyers are from overseas with Europeans dominating, many of whom are already based in Asia and looking for a readily accessible retreat.

We have recently seen an increase in the number of mainland Thais also looking to invest here which we have not seen before.

Let’s say that I need help from a Solicitor with conveyancing or a title search, can I find such services on Ko Samui?

There are lawyers here who do offer these services and the ones we recommend are very thorough. You can do it through a Bangkok law firm if you prefer.

Do you have any experience or stories about problems that foreigners have encountered?

The usual problem is caused by not taking good advice in the first instance and trying to do things on the cheap.

I frequently see properties where the original Due Diligence was not carried out professionally and as often or not it is an access issue.

Other problems relate to not submitting annual company accounts – especially if the owner no longer lives here – and the company is closed down by the DBD.

Then when they come to sell it, you have to resurrect the company which costs time and money.

What are the benefits of buying a property in Ko Samui, compared to other islands and resort destinations, like Phuket?

I think the benefits are very personal as the atmosphere is different in each location.

When talking to clients, I get the impression that they still see Samui as a real island, whereas Phuket is larger and you can drive there.

Samui is only accessible by sea and air, which is an advantage or disadvantage depending on your viewpoint.

What property is in big demand? Lifestyle property, or investment property? Condos or villas?

The demand that we are seeing is very disparate with no one sector predominating, but limited in all price ranges.

Where should I buy property in Ko Samet? Taking capital gains, rental yields or quality of life into consideration.

  • The North East of Ko Samui is, and always has been, the most popular area of the island and generally attracts more interest. Prices are higher in this area especially for land. It is convenient for people on vacation as being easily accessible to Fisherman’s Village and Chaweng
  • The North coast is becoming increasingly popular as facilities in that area expand
  • The West coast is generally less popular, but does attract visitors looking for a quieter more relaxed vacation

Can I get help to rent out my property?

There are a number of villa management companies on the island who can take care of this for owners.

Thanks Harry. Finally, is there anything you want to tell our readers?

Thailand is country where things happen slowly and Samui is no exception to this.

Gradually the infrastructure issues are being resolved. The electricity problems we had when I first moved here are mostly gone. We still get the occasional power cut, but due to the PEA working on improving the distribution network rather than failures in the system.

Water supply has been dramatically improved with the new undersea pipeline from the mainland and they are currently completing the distribution pipes around the island.

Drainage to the roads is being upgraded and they are being widened and laid with asphalt. Samui is not perfect, but for many that is its attraction.

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