Growth in detached villa sales on Koh Samui
Detached Villa Sales – Koh Samui Thailand
Koh Samui is an island located in Thailand and is the second largest island to Phuket. From its humble beginnings as a fishing and coconut farming area it is now most well-known as a tourist destination. And home to a large number of 4 and 5 star branded hotels including the likes of W Hotels, Banyan Tree, Conrad and the Four Seasons. With groups such as these investing millions of Thai Baht, this has led to a rise in the number of high net-worth individuals visiting for vacation breaks and more extended stay.
With Koh Samui island on the map as a high class tourism destination, there has been a significant impacted on the Samui real estate market, with foreigners looking to buy property on Koh Samui ahead of other Thailand property hotspots. Anticipating even more growth has led to higher numbers of detached villas for sale on Koh Samui.
The market for detached villa sales shows signs of significant growth in gated detached villas market.
1. New Zoning Regulations
Certain growth and levels of new detached villa sales have been caused by tightening of building laws and zone restrictions. Several small and mid-size developers have submitted building applications ahead of new laws on building size, height above sea level and villa height restrictions from 12 meter’s to 6 meter’s.
Building area to land size has also come more into play, whereas before structures could fill a large portion of the land plot, now at certain height above sea level structure is limited to 50% of total plot size.
For example, the new law where land is greater than 140 meters above sea level, constructions of residential units are limited to a single house, which;
- Cannot exceed 6 metres in height;
- Cannot exceed 90 m2 in area;
- Must leave 50% of the land vacant and “green”;
- Must have an architectural design based on traditional Thai, tropical style
So developers applying ahead of the new laws to maximise their ability to build using the old regulations.
2. Foreign Villa Developments
The recent increases in foreign buyers especially from China. Chinese entrepreneurs believe there is a real opportunity to sell detached villas to mainland Chinese. There are at least two developments back by Chinese initial funding.
The rise in numbers of Chinese tourists venturing to Koh Samui for the first time due to decreases in travel restrictions. And now certain direct flights from China to Koh Samui airport is increasing demand from Chinese property buyers.
According to Knight Frank Thailand Research, as of Q1 2014, there were approximately 420 villa units in Koh Samui. Development activity, especially in the northeast area in places such as Choeng Mon, Chaweng, Plai Laem, Bo Phut and Chaweng Noi has increased supply.
These locations are popular for villa development because they are key tourist destinations with popular beaches. There are many resorts and hotels located in the areas, as well as retail outlets such as Tesco Lotus, Big C, Makro and Central Festival Samui. The emerging areas should be around Maenam and Lamai beaches, as these locales are peaceful and tranquil, with relatively beautiful beaches. Also, facilities and amenities are not too far away.
Market growth on Samui has come about because of the movement of funds from countries such as France and Russia. The French have been especially active over the last 2 years due to changes in Tax laws in their country meaning French Nationals are moving funds abroad to escape high levels of wealth tax, and second home taxes.
(In France, The loi de finances rectivative 2014 introduced an increase of 20% in the taxe d’habitation of second home owners with properties in designated areas of France. The higher rate of taxation is a discretionary one available to local mayors in areas of housing shortage to choose whether or not to introduce it. The measure concerns 1151 communes in 28 urban agglomerations in France, known as zones tendues*, where the official aim of the tax is to persuade owners to sell or let out their second home on a permanent basis. However, it looks to be meeting with only limited appeal amongst the councils concerned with reports in the French press that only 98 (8.5%) of the councils have imposed the higher rate).
Detached villa sales – Koh Samui a lifestyle choice
People buying a second home, holiday or retirement property tend to be emotionally involved in the purchase and like to visit the site and be familiar with the area prior to reserving a unit, which can lengthen the buying process. People buying a property in Koh Samui are most often owners of a property elsewhere; in many instances, they own two or more properties throughout the region and world. Location is a key factor for sales, and people pay a lot of attention to the site, views and immediate environment, including other developments and the availability of amenities in the immediate area.
The popular villa units have 3 to 5 bedrooms, sea views at swimming pool level, plots from 250 sqm to 1000 sqm, with a usable area of around 350 to 650 square metres. The selling price is based on the distance to the beach, views from the unit, unit size and land plot size. Now we are seeing entry level villas from 15.5 million Thai Baht upwards, with prices starting to rise in several locations as land and construction costs increase.
To appeal to tourists, Samui features many new retail developments, including Central Festival Samui, which just opened during the first quarter of 2014. The project is located on a 32-rai plot in Chaweng beach. There are approximately 19,250 square metres of leasable space, with approximately 400 parking spots. The Wharf Samui, a community mall in Bophut beach, another new shopping and restaurant area at Bophut is also gaining popularity with its plaza style small boutique shops, restaurants and bars. Situated along the beach at Bophut, it is popular with residents and vacationers.
Growth is detached villa sales on Koh Samui Thailand remains buoyant.