Ko Samui Properties

How to sell properties in Koh Samui

2009-11-10T15:56:00.002+07:00

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!

2009-10-09T14:58:00.002+07:00

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

2009-09-04T13:59:00.002+07:00

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

2009-08-03T15:30:00.003+07:00

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

Koh Samui Electricity Costs

2009-07-01T13:10:00.002+07:00

In these troublesome economic days it is worth looking at how money can be saved in running your home. Apart from the “green – environmental” issues, which I do not dismiss but are not the theme of this article, it is what can be done to reduce monthly running costs? The main bill we get on a monthly basis is for electricity and often the one that produces the highest number of complaints, particularly on managed developments. Taking your electrical supply direct from the Provincial Electricity Authority (PEA) for single phase supply the basic charge depends on your contract. Because many properties are owned under company names the supply rate is that of a Small Business. As most people use more than 150 kWh per month there is in practice no difference to the Residential Rate. Usage as measured by the meter is then multiplied by the appropriate rate and to this is added a fuel cost factor – this varies from time to time based on the cost of production such as oil prices – and is currently 0.9255 Baht per unit. Add VAT @ 7% and that is the total bill. Fairly basic stuff.

For an average bill the gross unit rate will work out at between about 3.30 and 3.60 Baht per unit. Many developments and some individual houses have 3-Phase supply. This is calculated in pretty much the same way but the bill is more complicated because there are different readings for Peak Hours and Off Peak Hours supply yet for most properties the rate is the same unless an option for “Time of Use” metering has been taken, but once taken you cannot switch back to Normal Rate metering. The current basic rate for Normal Use is Baht 2.4649/unit. Added to this is a Service Charge of Baht 228 a fuel surcharge - 0.9255 Baht per unit and VAT. The final unit rate works out at about Baht 3.75.

Why then people ask do managed developments often charge higher unit prices? There are a couple of reasons for this. The main one is the loss on distribution. Power is transmitted to the main transformer on site and then distributed to the various properties. Between the transformer and the properties there will be a loss. The transformer may receive say 1000 kWh but the total measured in the property meters may only show 950 kWh. The difference is the distribution loss and needs to be apportioned between the properties. So, one property may show a meter reading of say 200 kWh which at Baht 3.30/kWh would cost 660 Baht but also has to share 200/1000 of 50 kWh or an additional 10 Baht increasing the unit charge to 3.35/kWh.
There are other charges which often come into the equation. Transformers need maintenance and these costs are frequently allocated as a cost on the electricity bill. Whether they are allocated as a proportion of properties supplied or apportioned according to usage is a matter for the management contract. The wires from the transformer may also need attention from time to time and these costs need to be apportioned as well. Transformers and wiring do have life spans and at some time will need replacing so it is not unusual to see a sinking fund built in to the costs to provide future capital for renewal.

Finally there is a cost for the management of these issues. Someone has to check the meters, calculate the bills and collect the money. This is usually provided for as a percentage of the total bill.

Different projects carry out these allocations in different ways. Some include the costs as described above whilst others separate out managements and sinking funds costs. It is therefore important to know how these costs are dealt with in the management or service contract that is signed on purchasing a property.

Reverting to how I started this article. Identifying the big energy users in your home and controlling them sensibly can make a big difference to your energy bills. There are obvious savings to be made by controlling the use of air conditioning both in the hours it is run and the temperature it is set at. Surprisingly a not so obvious high user of power is a pool pump which can easily use 1,500 kWh per year which alone can add Baht 500 a month to your bill. Reducing the cycle time for the pump to the minimum required to keep the water clean can save money. Refrigerators are the next biggest user of electricity so minimising the time the door is left open will help. Simple things such as leaving the television on standby will use about 5kWh per month. The table top water boilers seen everywhere are extremely inefficient in normal use as they continually boil water even when not required. Energy saving lights benefit in operating at a lower temperature so reducing cooling requirements but also produce the same amount of light using far less power – 20-30% less than standard light bulbs. The initial costs are greater but with lifetimes of 8 to 15 times standard incandescent light bulbs they have significant cost benefits. They are not however trouble free. They do not re-act well to being switched on and off in a short space of time and this can lead to a significantly shorter lifespan – as much as an 85% reduction. These bulbs also contain Mercury which can complicate their safe disposal.

Saving money or just being “Green” – it is up to you.

Another comment on Foreign Exchange. Buy Baht here. In the last month I have checked the exchange rates being offered by UK banks and the Post Office against rates quoted by the banks here. As an example on 12th June the Post Office was offering Baht 52.3653 for one Pound and Nat West would only have given you Baht 50.4410. Siam Commercial Bank would have given Baht 54.58875 for notes and Baht 55.57 for Telegraphic Transfers.

A visiting land Officer in Phuket made a rather controversial statement that Thai Spouses owning land on behalf of their foreign husbands was not allowed and in such cases the land title would be with drawn. This obviously caused alarm which was unnecessary as the statement was made in clear contravention of a Supreme Court Ruling in 1999 that provided the funds used to purchase the land were solely the property of the Thai spouse then such ownership was legal. This is why a joint declaration to that effect is required where land is being purchased by a Thai spouse. Further clarification has been made by the Land Office and is reproduced below confirming this.

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, or require advice on acquiring property in Thailand please send me an email at hbonning@kosamuiproperties.com

Koh Samui Hotel Deals and How Big is Your House?

2009-06-04T15:01:00.003+07:00

Tourism is down and hotels are cutting their rates both in Koh Samui and Bangkok. However, you will notice that this is done in a subtle way by offering limited promotions rather than a general reduced rack rate. Hotel room rates are very customer and travel agent sensitive and whilst modest increases year on year are accepted by clientele, major changes need to be on the back of a renovation or some other good reason to justify them. Therefore to increase the value of your hotel it can take a few years to achieve a higher Average Daily Rate and hoteliers do not want to take a step back by dropping the rack rate. Hence, limited period promotions. Despite the numerous promotions around the “big boys” obviously see a future in Koh Samui as Park Hyatt and Conrad are still building and Banyan Tree have quietly made good progress with their development to the north of Lamai which is due to open later this year. Bhundhari Spa Resort and Villas has just opened with 124 more rooms and villas and of course has an “Opening Promotion”. Sala Samui in Cheongmon have a “Sala Fly Free” promotion where complimentary one-way flights are on offer for up to two guests wishing to experience both SALA Phuket and SALA Samui. Nevertheless, reports in The Nation and Samui Express – copied later in this Newsletter – indicate that many hotel owners are finding it difficult to continue in the present market and are trying to sell. Whilst there is undoubtedly some truth in the article it is another example of “parachute journalism” where a reporter takes a snapshot of a situation following a brief visit and produces an article which seems to suggest that the properties being offered have come to the market as a consequence of the current recession. The reality is that every one of the hotels mentioned (in Koh Samui) has been offered on the market for at least the last three years and mostly at prices that were unrealistic then, never mind today.

Usually the owner is well aware that the price being asked is unrealistic but takes the view that somewhere there is someone who may pay it and at that price he will sell, but if it does not sell – so what! And sometimes they are right which makes valuing hotels here so difficult. In one case a beach front hotel was on the market for Baht 50 million. It was available for months, if not years. It eventually sold. Minor renovation – mainly just a paint job – was carried out and the property was put back on the market at Baht 110 million and sold within six months. No logic to this at all. Baht 50 million was good value. Baht 110 million was way over the top. There is another prevalent view that as time has passed, the value must have gone up. In one case a hotel had been offered at Baht 150 million and remained unsold for at least three years – it needed extensive renovation and was not ideally located. Late last year the owner put the price up to Baht 210 million because “it must be worth more now!” In this case it remains unsold and is likely to remain so for the foreseeable future – unless of course “someone from somewhere” comes along and proves me wrong!

How big is your house? Well it can vary depending on who measured it and by which criteria. The RICS produce a Code of Measuring Practice the purpose of which is to achieve consistency between valuers for the purpose of accurate comparison and definition. The Code runs to 42 pages and includes definitions of Gross External Area, Gross Internal Area, Net Internal Area and has a specific section relating to Net Sales Area. Most areas I see published on web sites are poorly defined and if I have the opportunity to check them on site, they are often misleading and often simply wrong by whatever definition used. The Code is extensively used in the UK and it is clear from experience that few people on the real estate industry here in Thailand use it or are aware of it – but then why should they be! There are currently about 60 fully qualified Chartered Surveyors practicing in Thailand and what is encouraging is the large number of young Thai people in the real estate industry who are applying for membership. Hopefully as more qualify and enter the profession, standards and consistency will improve, and even if the Thai valuers produce their own version of the Code for Thailand, then consistency will be achieved for the benefit of everyone. In the meantime, I will continue to abide by the RICS Code of Measuring Practice.

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.

If you wish to receive the full monthly newsletter, please email me at hbonning@kosamuiproperties.com .

Travel to Koh Samui or not? Are you a Savvy Traveller?

2009-05-01T12:56:00.002+07:00

“We advise against all but essential travel to Bangkok. British nationals should also review travel plans to other parts of Thailand. British nationals already in Bangkok and other cities affected by the violence are advised to stay indoors and to monitor the media and this travel advice.”

So stated the first paragraph of the Foreign Office warning to travellers during April. The whole text can be seen here.
Having lived, worked and travelled in and out of the Gulf during the first Gulf War and having been here during the Military Coup three years ago, I have seen these warnings on numerous occasions. Quite rightly I suppose governments need to make such statements because there are many people who are not seasoned travellers, who are not street wise and need to have their hands held every time they step outside their own front door. Modern news broadcasting is so extensive, immediate and even pervasive, that anyone with a reasonable amount of intelligence should be able to make a reasoned judgement on whether or not to travel to a certain place. Obviously over the Easter/Songkran weekend, Bangkok and Pattaya were probably not the best places to be, which was a shame as whether you enjoy Songkran or not, it is usually a time for fun and frivolity. With Songkran coming immediately after a weekend, it became of course a very long weekend with Songkran lasting until Wednesday. So now you have five days when people are not expected to turn up for work and the ability to amass a large number of people for a demonstration was that much easier. So was it a good idea to plan the ASEAN summit at this time? It would appear not with the inevitable consequences. As I write this in the immediate aftermath the police water cannon seem to have been replaced by the plastic water guns which have become more traditional during this period and most people have reverted to more peaceful means of enjoying themselves and the crowds are dispersing leaving the political consequences to be decided.

Here in Samui Songkran passed off as usual, a little quieter than in previous years and, as opposed to other parts of Thailand, is over in one day. Apart from Bangkok and briefly in Pattaya, I was not aware of any reports of disturbances elsewhere in Thailand, and even in Bangkok the problems seemed confined to specific areas, which obviously as a foreigner it would be wise to stay away from. The airport was not affected this time although I suppose that would be the main concern of travellers as the ability to travel and the possibility of not being able to travel was uppermost in peoples mind rather than getting caught up in the demonstrations. Certainly most people I know who are regular visitors to Thailand take these events in their stride, but for people planning their annual vacation to Thailand for the first time perhaps, these confrontations will inevitably make them have second thoughts and seek more stable destinations. The consequences for the tourism industry are severe. Job losses in the hospitality sector have been estimated at 275,000 this year based on a predicted 35% fall in tourist arrivals. Hotel occupancy is down. Room rates are being cut drastically and there are some very good deals being offered across the board.

So for the faint hearted, the Foreign Office advice may be one to pay heed to, but for the more savvy traveller the present situation has created opportunities to explore Thailand far more economically than before. Bangkok does not even have to be on the agenda. Koh Samui is accessible internationally from Singapore, Kuala Lumpur and Hong Kong as are other regional airports. For the more adventurous who wish to avoid air travel there is the Eastern & Oriental Express from Singapore through Kuala Lumpur, Penang, Kanchanaburi for the River Kwai and on to Bangkok where you can connect to Chiang Mai or Vientiane.

And property prices are still falling! 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.

To receive the full monthly Newsletter please email me at hbonning@kosamuiproperties.com

Koh Samui, Songkran, Marina and Sports Stadium

2009-04-01T15:55:00.005+07:00

The world economic situation continues to have its affect on real estate globally and unsurprisingly also here in Koh Samui. We continue to see price reductions of 25-30% many of which are due to the fall in the value of Sterling and owners can afford to reduce the Baht price correspondingly and still receive the same mount in Pounds they would have done a year ago. Nevertheless there are some owners who are prepared to go even further and have reduced their asking prices by up to 50% as you will see if you look at our Hot Press Offers here. Having said that the market is not totally dead as we have seen a couple of sales in the last month so there are buyers out there looking to take advantage of falling prices.

Songkran starts on 13^th April so keep those plastic bags handy if you are going out to keep your phone, wallet etc. dry. Samui has a pretty good tradition of keeping it to three days at most. In some parts of Thailand it lasts for seven days! The main day will be Monday 13^th April although anyone venturing out on the Sunday afternoon or evening may get the odd splash and it tends to fizzle out by midday on the Tuesday. The Government was considering banning the sale of alcohol during the Songkran Festival but common sense prevailed. The existing ban on alcohol sales before 11am and between 2pm and 5pm and after midnight is illogical enough in terms of restricting sales. The concentration over Songkran will be enforcement of the drink driving law so beware – there are likely to be more traffic checks wherever you are in Thailand.

I have reported in previous Newsletters on plans for a Marina adjacent to Big Buddha and BBC Café. The soil surveys have commenced and it is expected that the Marine Department will approve the Initial Environmental Examination Report for the Samui Marina by mid to end of March. The next stage is provincial committee approval. For more information on progress and pictures check this web site http://www.bigbuddhamarina.com/index.html courtesy of Mark at BBC Café.

This has nothing to do with Samui but is interesting and worth passing on. We are all aware of the regular nonsense Health and Safety Executive directives that appear in the Press from time to time. Well the UK H&SE have now decided enough is enough and created their own web site to address the many issues of which they are accused. It makes interesting reading and you can see it here. http://www.hse.gov.uk/myth/ .

It would appear that Koh Samui is to get a new Sports Stadium according to the following announcement – “ Welcome to the Home Page of the Samui Sports Stadium, opening soon on the island of Koh Samui, Thailand. The Samui Sports Stadium features 3 large floodlit football (Futsal) pitches and a Multi-Purpose Hard Court for Basketball, Netball, Volleyball++ , a swimming pool and BBQ Area, a children's play area, state of the art facilities and a fully licensed restaurant and bar.” More details can be found on this web page - http://www.samuisportsstadium.com/

If you would like to receive the full Monthly Newsletter, please e-mail me at hbonning@kosamuiproperties.com

David Beckham nonsense on Koh Samui

2009-03-05T15:44:00.002+07:00

Once again David Beckham’s “house on Koh Samui” has hit the headlines around the world. Reports are that he has installed a state of the art mosquito repellant/killer (depending on which report you read) and that the local Monks are up in arms about killing living creatures. One wonders why then the Monks are not protesting at Tesco, Big C etc. about the mosquito sprays, rat poison, and other insect zappers they sell and why companies such as Rentokil are not targeted! What nonsense! Then they go and publish a photograph of “his house” which actually belongs to someone else. Even Samui Express picked this up and published it and they really should have known better. I copy that article below out of interest only. Just goes to show you cannot believe everything you read in the papers.

I reported last month on problems we had with our web site being hacked which was at the best disconcerting, but we were able to resolve that issue relatively quickly. If anyone still has problems accessing our site or gets warning messages – particularly is you use the Firefox browser, please let me know. We also discovered an issue with emails in that due to the number of emails I send out, not least of which are the ones distributing this Newsletter, our out-going mail server started to reject mails as it identified them as potential spam. We changed our outgoing mail server but as a precaution I also use my gmail accounts hbonning@gmail.com and ksprop.harry@gmail.com and kosamuiproperties@gmail.com so if you receive mails from any of these accounts they are legitimate and from me.

Well there is good news and there is bad news. And they are both the same. Asking prices are coming down and quite significantly. This is due to a combination of factors, mainly of course the world wide economic situation and lack of credit. As Thailand has always been a cash purchase scenario due to the absence of finance for foreigners, and as most people are hanging on to what cash they have these days, the market has all but dried up. There are still buyers around but they are only looking at really attractive deals. Combine this with the fall in the value of the British Pound as a prime example and you can see that from Baht 64 to the pound last June to Baht 50 to the pound today, this represents a 28% increase in the cost of a property here in Sterling terms. However, on the other hand anyone selling here can reduce the price of their property by 28% in Baht and still achieve the same result in Sterling. As an example, a house for Baht 10,000,000 would have cost £156,250 in June last year but would cost £200,000 today. Equally that house could now be purchased at a Baht price of Baht 7,812,500 and still maintain the Sterling price. So the good news for buyers is that property is getting cheaper – provided you are not paying in Sterling.

We have seen a number of owners reducing their asking prices accordingly and some quite dramatically taking into account the factors mentioned above but also due to personal circumstances which are producing some very interesting possibilities. We have one large sea view property on a large site that was offered at Baht 60 million which is now available at a drastic reduction to Baht 25 million for a quick sale and another hilltop house which last month was Baht 24 million now available at Baht 13 million. These are exceptional purchases for someone with a medium to long term view.

Progress is being made on the Marina project I reported about in the November 2008 Newsletter. Towards the end of last month bore holes were drilled to investigate the ground conditions for construction.

Below I have reproduced an article I wrote last November for C-Publishing and which will appear on the March Issue of C-Holiday magazine. As at this time I do not have a direct link to the article in the magazine but the general link is http://c-publishing.com/ .

Generally everything remains pretty quiet having regard to this is still High Season. The world economy is certainly having its effect on tourism although there do seem to be a fair number of stalwarts who continue travelling but in far fewer numbers. The next surge would be expected at Easter and Song Kran, so we must keep our fingers crossed for good reports.

If you wish to receive a copy of the full Newsletter please email me at hbonning@kosamuiproperties.com

Fake Bank Notes on Koh Samui

2009-03-02T12:14:00.000+07:00

Still running a month behind on these blogs but will catch up in the next few days.

The internet is such an important tool in business these days and a company’s website is the most vital provider of information on the company’s activities and products. Our own website www.kosamuiproperties.com is a major tool in our business and is the first contact that a client usually has with us. It is therefore a potential disaster when that web site is hacked which happened to us in January. For a while anyone using the Firefox web browser received a warning message when they tried to access our site that it had experienced an “attack” and they should not proceed further. Naturally this initiated a flurry of activity on our part with correspondence with our hosting company and Google to identify the problem and eliminate it. It was identified as coming from three sites in China and following the instructions of our hosting company and IT advisors we were able to clean the site and restore its safe availability within 24 hours. We maintain up to date Virus Programs and other safety software but hackers are so ingenious these days that even that sometimes does not help. Internet security is so important these days as there are too many people out there with malicious intent that you cannot be too careful.

Last month I reported on fake thousand Baht bank notes in circulation in Thailand and this month it would seem they have arrived in Koh Samui and indeed it would appear we had one in the office as part of a rental payment. I have reproduced the flyer which helps to identify fake notes below, so please take the time to look at it and be careful when receiving cash. The local banks have states that the money drawn from and ATM will be OK but long experience of dealing with banks here suggests that even then you check what comes out of the slot.

Some good news is that following the visit to Koh Samui of the Prime Minister recently, the state of the roads on the island was discussed and a promise of funding made. We must now see if that turns into reality! See the article later in this Newsletter.

The weather since the turn of the year has been much cooler than normal, and whilst acceptable to those of us brought up in colder climates, has not been welcome by our Thai hosts. Having said that though, there was one night watching the rugby quite late when even I had to make a quick run home to get a slightly heavier shirt and change my shorts to long trousers. Not at all what we expect in Samui in January.

If you are planning a trip here in the spring, the Song Kran Festival this year runs from 13th to 15th April here in Samui although different areas of Thailand extend the dates and you can get wet for a whole week in some places. Samui is pretty sensible and two or three days is the maximum. If you have never been during Song Kran it is an interesting experience – once – although the Thais love it every year but having lived here for nearly nine years now, the novelty has worn off . Or maybe I am just getting old and curmudgeonly!

A somewhat shorter Newsletter this month as there has not been a great deal of published news to report. Generally everything has been pretty quiet having regard to this being High Season. The world economy is certainly having its effect on tourism although there do seem to be a fair number of stalwarts who continue travelling but in far fewer numbers. The Chinese New Year was reasonably busy, a bright spot in an otherwise gloomy tourist season. The next surge would be expected at Easter and Song Kran, so we must keep our fingers crossed for good reports.

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Rain, Valuation and Tourist Police in Koh Samui

2009-02-13T15:48:00.002+07:00

Sometimes things get delayed - as is this Blog which should have gone out in December so please read it in that context!

I am not commenting on the present situation in Thailand as there is really not much more to say that cannot be read in the Newspapers and seen on the television and the situation is still fluid. It has obviously badly affected the tourist season and for those still brave enough I can see that there will be some cheap deals in the hotels over Christmas.
Well the rainy season has well and truly started and there has been plenty of rain during November. As expected all the usual places have flooded but there are some positive signs as well. Since the last major flooding here the Municipality has carried out several drainage improvement schemes and they appear to be working. It is doubtful that any drainage could have coped with the volume of water that fell on the island in such a short time but once the rain stopped many of the affected areas cleared very quickly. Emergency measures put in place on the prediction of heavy rains also worked. The flooding that normally occurs between the traffic lights at Bophut and the entrance to Fisherman’s Village has been noticeable by its absence due mainly to the huge pump in place on the corner. The road near Plai Laem Wat between the 7-11 on the Tong Sai Bay turn and Cheongmon which always floods used to take days to clear but now is gone within a few hours of the rain stopping. Bangrak as well with its new road and drainage system has coped well. There are still bad areas and the road just north of our office between the PTT station and the Laem Din turn still floods badly and takes time to dissipate as does the road through Laem Din which despite the new road and drainage there has been closed. We always expect rain at this time of the year and hopefully with it coming “on time” presages an end before the Peak Season over Christmas and the New Year.

The great issue to be faced by a valuer in these troubled economic times is justifying a valuation figure against actual sales in the market when such sales are few and far between. Only Thai qualified valuers can prepare valuation reports that can be used in the Thai Courts or by Thai banks. As a Chartered Surveyor in Thailand valuations I prepare are not acceptable to the Thai authorities. However, I can and have prepared valuations relevant to real estate here that are acceptable to the UK Courts. Justification of value in these instances is important and very relevant should there be a dispute between the parties in Court. I therefore have to be diligent in my research, logical in my reasoning and arrive at a valuation figure that is fair to both parties. I must therefore look at all the evidence available to me which includes asking prices, changes I am seeing in asking prices, land prices, building costs, etc. The Market Value of a property as defined by the International Valuation Standards Committee of the Royal Institution of Chartered Surveyors is defined as follows:
‘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.’ How do you proceed if there are no willing buyers at the valuation date? This does not mean that the property has no value as it obviously has a value to the present owner and there would be a figure at which that person would no longer be a willing seller. So it is a bit of a conundrum. In the final analysis I have to form an opinion and make a judgement and provided the basis upon which I arrived at that judgement is clear, logical and fair I can do more.

There is an article below announcing details of the new Samui Tourist Police location between BigC and Samui Town Centre. The Tourist Police come under a great deal of criticism mainly for not being available or easily contactable when they are needed. This was certainly partly due to the main office being in Nathon with a small portacabin office behind McDonalds on the Lake Road and also because the national contact number of 1155 does not work on Samui. At a meeting a few months ago which I attended they were well aware of the complaints and were working to resolve them and hopefully this move to a new location more accessible to the majority of tourists will do that. The other point that was made at the meeting was that the Tourist Police are not just there for the tourists but are available to assist all expatriates on the island including long term residents and can act as an interface between the local police and the foreigner. Certainly the Tourist Police officers will have a better command of English although not fluent by any means. This is where the Local Civilian Volunteers come in who hail from various different countries and have a good range of languages between them. Sadly there is inevitably a section of the community who see the volunteers as “wannabe cops” strutting round in uniform. I know a number of these volunteers and this is not the case. The uniform is necessary so that they are identifiable and they do carry identification to confirm their legitimacy. If they did not you can guarantee they would be accused of being “undercover snoops” for the Police. That is not their job and they are aware of it. Some are retired residents on the island and some business people who give up a few hours a week to give something back to the island. They do not have any powers of arrest nor are they armed as some people seem to think. They are there as an interface and from what I have seen do a good job. Tourist Police Contact Number: 077 43 00 18

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Possible location of new Marina on Koh Samui

2008-11-10T11:37:00.003+07:00

Another month has gone by and there seems no end to the political turmoil in Bangkok. Whist the demonstrations are confined to specific areas the world media gives the impression that any visit to Bangkok is fraught with danger. The reality is of course that Bangkok is no more dangerous than it ever was and by comparison with many cities around the world including Europe, a lot safer. As in any city with which you are unfamiliar it is a matter of being aware of your surroundings and using common sense. These reports are part of the reason that tourism is down although the world economic crisis has also had a big hand in this with no easy credit and people hanging on to their cash. Nevertheless for those who still wish to travel beyond there own shores, Thailand is still a very attractive destination and cheap in comparison to many tourist destinations. With hotel bookings down in most sectors there are some good deals available to those willing to look. Talking to some of the hotel managers in the five star range I have been getting a slightly confused story. One hotel is telling me that their bookings are down at the present but they are full from Christmas through to March. Another was telling me that their advance bookings for next year were so low that they have dropped the seasonal rates and now have a single mid range rate for the whole year.

There was a meeting in October at Wat Plai Laem to inform the public about possible plans for a Marina adjacent to Big Buddha. It is still in the consultative stage at the present time but the estimated cost is Baht 644.5 million. The Marina will, if approved, be accessed from the land bridge connecting the main road by BBC Café to Big Buddha. There will be a total of 111 berths of different lengths with fueling facilities. There will also be a Marina Building which will presumably have the Marine Office but other facilities are not mentioned. The meeting was quite well attended with about eighty people, mostly Plai Laem residents and four or five foreign residents. One of the local residents I spoke to at the meeting was in favour of the Marina but would prefer it on the other side of the Koh Fan peninsular – nearer his house!

Thanks to Mark at BBC for the image.

This is one of five locations considered and currently the preferred option. Other locations considered were Bophut, Koh Som, Tong Krut, and Phang Nga.

Someone had a good time eating street food on Koh Samui and you can read their full report here.
Latest news of the wires is that Samui has at last been upgraded in status from a sub district to a town municipality, not City status as many had hoped, but a positive step for Samui. City status was always a forlorn hope as Samui just did not meet all the requirements. However, with a step up the ladder so to speak, Samui reports directly to Bangkok now and not through Surat Thani. For anyone interested in how the Thai regional government evolved and where we are to day follow this link.

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Thailand Politics and the effects on Koh Samui

2008-10-03T12:15:00.001+07:00

For those of you who noticed, my apologies for failing to issue a Newsletter for September but this was due to an unexpectedly long overseas business trip and I did not have the time or opportunity to create one.

The political situation in Thailand is still not fully resolved although the now ex-Prime Minister Khun Samak has departed the scene to the delight of many but one wonders if his replacement Khun Somchai Wongsawat will fair any better as he is the brother-in-law of ousted Prime Minister Taksin Shiniwatra. He has quite an impressive background on paper qualifying as a Barrister in 1973 and holding posts as Chief Justice in various provinces and serving for nearly six years as permanent Secretary at the Ministry of Justice. His role under the Samak regime was as Minister of Education. However, even a cursory look at his background seems to suggest that he has been accused, rightly or wrongly, of being involved in a number of questionable areas such as when he was a member of AOT board, he was one of the 36 people implicated in the irregularities relating to the controversial Suvarnabhumi Airport luggage scanner purchase. Also one of the main demands of the opposition PAD is that Taksin Shinawatra is brought back to Thailand to answer charges of corruption and it is difficult to see Khun Somchai doing that although he has stated that is a matter for the Courts. Whilst certain sectors of the population seem to have accepted him there is still opposition to his appointment in some areas. Equally there is a growing antagonism to the PAD who are leading the opposition and their actions are seen by many as the cause of drop in tourism to Thailand over recent months due to the wide spread international reporting of their actions such as blocking airports.

What was good to see here in Koh Samui was that, with Phuket and Krabi airports being blockaded, the intervention of a respected local politician persuaded the PAD supporters, who intended to blockade the airport, that they would be doing themselves and the island more harm than good and the blockade was avoided. Nevertheless the demonstrations in Bangkok being reported in the media world wide, as stated above, and the airport blockades have had a negative effect on tourism with many hotels reporting cancellations as far ahead as Christmas. This is unfortunate as the situation on the ground is really very peaceful and apart from organised protests in the usual places (Nathon sea front and Chaweng Lake) life goes on here undisturbed. The protests may at times be loud but there has been no violence. I can see a lot of good deals becoming available in the hotels over the coming weeks.

The reality is in my opinion that tourism is being affected more by higher airline fares due to the price of oil and the overall world economic situation more than the political issues here as anyone who knows Thailand understands that the demonstrations, that are so widely reported, are very localized and tourists are not usually affected if they stay out of those areas. The airport situation was an exception but even those involved have now realised they did themselves more harm than good.

For those of you who may at times need Consular Advice, “Big Dave” Covey who has for a couple of years been the Honorary British Consular Representative on the island has at last received official accreditation from the Thai Foreign Ministry. Congratulations Dave!

Supermarkets and Accidents on Samui and Phangan

2008-10-03T12:06:00.002+07:00

This blog should have been published at the beginning of August but I had to leave on an extended overseas trip and did not get back until early September.

There is an interesting article in this months Newsletter about Koh Phangan, an area I generally stay away from, but which highlights the issue of large international chains and their effect on the local economy. There were many objections to Tesco Lotus coming to Koh Samui and even more when they were followed by Makro and Big C. Yet anyone who goes to these stores will see that they are frequented predominantly by the local Thai population, many of whom own small supermarkets around the island and buy at wholesale prices and continue to make a living because they can. In the years since Lotus Tesco opened I have not been aware of any of the small supermarkets that we used previously closing so the fear was unfounded. Now they have Lotus Tesco on Koh Phangan and the effect appears to be dramatic. Competition has driven prices down and the local supermarkets are having to compete. There will undoubtedly be critics who decry the “commercialisation” of the island but why should the population there be denied better choice and lower prices. Word has it that the stocks sold out so quickly in the first few days that many shelves were soon bare. That is a problem that I am sure Lotus Tesco will get round as it is part of the logistical supply chain problems they experienced here on Koh Samui when they first opened –and still occasionally have here – and it will take time for the supply/demand equation to settle down. In my view the bigger threat to the local supermarket is the increasing spread of 7-11’s and Family Mart stores which are appearing on every corner. Not necessarily cheaper, but being open 24 hours and with a steady inventory, good supply chain, air conditioning etc. are more appealing than some of the older supermarkets. Some have taken up the challenge such as P&P in Bangrak which has identified local foreign demand and offers European foods not easily available elsewhere.

Last month I reported on the accident I had and the importance of having good accident and medical insurance whether as a resident here or as a tourist. I came across this “Blog” which makes the point again.

“Having travel insurance which covers every eventuality when you are abroad is not cheap but it is a prerequisite. I know from personal experience - my son was on his ‘gap’ year, travelling round the world and had got as far as Thailand where he had a horrific accident on the motorbike he had rented. To cut a long story short he was picked up from Koh Samui by a private jet and flown to Bangkok, as there were no hospitals that could deal with the extent of his injuries in the south of the country. He was on the slab for 10 hours - every bone in his head had been broken and there he stayed for at least two weeks - the bill - zero, de nada, rien.
The message for me is clear - this is the case of the well spent pound, dollar or euro - just do it.”

Now the other point that arises from this is that you should check your policy for exclusions. Many may specifically exclude motorbike accidents and certainly in Koh Samui, the frequency of those is alarming. I still wonder at the mindset of the tourists in particular (residents who do this should know better) who ride around without helmets and with young children on board. Traffic here is quite heavy now and the general standard of driving leaves a lot to be desired. It does not matter how good a driver you are, how careful you are, you cannot control the actions of others. Samui has many other pitfalls for the unwary visitor. Sand on the road is the same as ice and can have similar consequences. Palm fronds and coconuts falling from trees, potholes in the road, dogs running wild, all add to the dangers that will be encountered. My advice? Forget the bike. Hire a small Suzuki car and even then make sure your insurance is up to date and adequate.

Don't get too blasé visiting Koh Samui!

2008-07-01T11:26:00.002+07:00

Last month I finished with some comments on how blasé we come about living on a tropical island and those comments related at that time about our surroundings and life style. At the beginning of this month I was reminded that one can come a little to blasé about other aspects of life here – simple things like crossing the road! Without going into detail I was hit by a motorbike and spent some time in hospital, X-Rays, MRI, 72 stitches in head and leg, multiple abrasions, hairline fracture of the C3 vertebrae. Luckily nothing life threatening but it could have been a lot worse. I did manage to get out of hospital in time to watch the Rugby at the weekend though! The point of this is not to look for sympathy (little of that I got here from my wife suggesting that after eight years it was time I had a Samui Tattoo to my golfing buddies saying this might help me to keep my head still when I tee off!) but to make the point of how important it is to have Accident Insurance here. I have lived here for eight years now and in that time have had the odd scrape none of which involved overnight stays in hospital and consequently quite affordable. This time however, with follow up out-patient treatment the bill is going to be near to Baht 100,000. Even if you can afford it that is a healthy amount to take out of your bank account and if the damage had been greater that sum could easily have tripled or quadrupled. I had insurance so everything was covered but please take this as a warning that one second you can be happily going about your business and the next lying in the road wondering what happened!

Although the political situation here is still a little unsettled the government has given further assurances that last years proposed changed to the Foreign Business Act will not be implemented. See the articles below. This is a least some positive news in a somewhat turbulent world economic climate. The economic and social problems in Europe at least and the UK in particular are making more and more people consider life overseas and Thailand for many is an attractive prospect. The life style and relative low cost of living being the main factors. Where in Thailand depends on individual preferences. Phuket, Koh Samui, Hua Hin, Bangkok, Pattaya, Chiang Mai or some remote village in Issan. There are many choices of location and in each many choices of property from relatively cheap condominiums to high end multi million dollar villas. The market here is still pretty slow, certainly not dead, but not what one would call exciting. Consequently there are quite a number of good deals around if you are thinking of buying and with the emergence of financing and in some cases title insurance these can be vary attractive. For some people concerned about visas, you have a choice of a retirement visa or membership of the Thailand Elite scheme. This is not for everyone as it is not cheap but a Five Year multiple entry visa renewable for life plus other benefits is certainly worth looking at. Contact me for further information if you are interested.

Another snippet of good news is that the Squirrels appear to be back. I have not seen any for at least four years and their demise was blamed on the itinerant work force that caught them to supplement their diet so removing part of the natural food chain which reportedly led to the uncontrolled outbreak of the Coconut Palm Beetle which devastated so many of the Coconut Palms. Just recently I saw two playing in the trees behind my office so hopefully they are here to stay.

Some of the articles reprinted from The Samui Express are from May during which time their web site was down pending the re-launch of their new web site.
________________________________________
“For most of us the purpose of traveling to a developing country is to get the frisson of authenticity that we can’t get at home, and it annoys us no end when locals don’t play their roles correctly. Last week at my friend’s wedding in Koh Samui I had to listen to a long diatribe by a very nice Australian lady involved in the arts who was furious that Westerners were apparently forcing Thai people to live Western life-styles rather than leaving them to enjoy their own culture. In Koh Samui, I guess, there are too many refrigerators and motorcycles and not enough buffalo carts. I was going to argue that the Thai might themselves prefer the modern urban conveniences, and were perhaps indifferent about helping us foreigners achieve our much-desired authenticity, but I didn’t want to be thought a cold-blooded imperialist by the many nice people at the wedding.”
This is from a Financial Blog by Michael Pettis.

It rather puts into perspective the problems of the effect of tourism on indigenous people and the effect this has on their life style. It reflects also the common complaint we hear in Samui that Samui has become too modern and commercialised and it is not what it used to be! I find this something of a cynical approach – keep it as it was, let the local people live without clean water and electricity, telephones, television, the internet etc. so we can come and look at them living in poverty! Things change and it is the very people who spout this nonsense that have instigated the change simply by coming here. It is impossible for cultures to mix without some effect. The evolution of society is natural and it is natural for those that do not have to aspire to a better life. And why not! The evolution of society on Koh Samui may not be perfect but which of us can look back at our homeland and say that is any better. Would Koh Samui now have four modern hospitals without the advent of tourism? And before anyone says that they are mainly for the tourists, I suggest you visit them and see that a very large percentage of visitors are local Thai people. The roads are not great, we know that, but at least there are roads now instead of slogging along jungle paths to get from Chaweng to Lamai. No, Samui is not what it was and in ten years it will not be what it is now. It is only the people who were here years ago and remember it as it was who seem to have this chip on their shoulder. Most new visitors see it as it is now and can still see its charm and beauty. It is impossible to visit somewhere without leaving your footprint in some fashion and you cannot deny the right of the local people to want a better standard of living.

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Koh Samui Rumours and other news

2008-06-03T11:49:00.005+07:00

As with last months Newsletter let me deal with the rumours first. This is scuttlebutt of course but interesting if it is true and I have heard this from more than one source. Are we going to get a second airport or not? My impression is that it is highly unlikely, however word on the wire has it that a certain low cost carrier is acquiring land in Don Sak for the purpose of building an airport there and providing a fast ferry service to Koh Samui. As Mr Ripley says “Believe it or not!”

It has taken them some time but the Samak government seem to be making some positive noises to make foreign investment more attractive. They have stated that the amendments to the Foreign Business Act that were proposed by the previous military backed regime will be scrapped. They are also reducing the minimum number of shareholders required in a company from seven to three so only two Thai shareholders will be required and the need to find a number of other shareholders who may or may not be legitimate is removed. There will also be reduced requirements in respect of the registration of the Memorandum of Association which can be done in one day instead of between nine and twenty one days plus the easing of requirements for the passing of special resolutions. More detail on this in the article reprinted below.

In last months Newsletter I discussed the situation with the application for Koh Samui to gain City Status and gave my reasons why I did not think it would happen. It appears I was not far wrong as latest reports state that the Interior Ministry has rejected the proposal. It did not specify the reasons for rejecting the proposal but apparently listed a number of options that might be taken. These have not been reported. More news on this as it becomes available. However, there is growing discontent among the local population that revenues from the islands number one industry, tourism, are not being used to improve the infrastructure in particular the roads. With local elections for the vacant post of Mayor outstanding this may become a focal point.

Every time you turn around there seems to be a new name added to the list of major hotel operators coming to Koh Samui. Conrad, Mandarin Oriental, Park Hyatt, Banyan Tree, Dusit D2, Hard Rock Hotel, Ibis, Outrigger Hotels & Resorts, Intercontinental, Sheraton (as Vana Belle), and then we seem to be running out of real names as we get the likes of U, W, X2 closely followed by IMM. The list goes on with Alila Hansar, Prana Samui, The Sarann, Saree Samui, Sirimaya (an Amari Hotel), and possibly also Club Med! A number of these have not announced the number of rooms they will be adding but of those that have I can see in excess of 1600 new rooms being added to the Koh Samui inventory so I suspect when all the facts are known we are looking at in excess of 2,000 by 2011.

Sometimes we get a little blasé about living on a tropical island surrounded by Coconut Palms and blue waters and which most of the time has an idyllic climate far away from the rain and cold of our European origins. Then something happens to remind us how lucky we are. This happened to me last week as I was driving over a hill in Taling Ngam. As I came over the brow I was confronted by the scene shown in the photograph on the left. The photograph really does not do the panorama justice but that is more to do with my photographic skills more usually employed snapping villas! Even after eight years here, Koh Samui can still surprise me – in the right way!

For the sailors amongst you the Seventh Koh Samui Regatta will be held this month between the 1st and 7th of June.
For the golfers the Bangkok Airways Open 2008 is being held between the 5th and 8th June at Santiburi Golf Club.

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For Festivals around Thailand visit the Tourist Authority of Thailand website.

Latest News from Koh Samui

2008-05-02T13:25:00.002+07:00

Let me deal with the Rumours first! Last month I carried two articles from the Samui Express. One stated that the application for Koh Samui to be upgraded to City Status had been sent to the Provincial Government for approval. The second stated that the Governor had sent the application back without approval. Well, the latest rumour is that it has gone back to Provincial level and that “an up grade in status” is expected within two months. Now my understanding of the requirements for City Status (Thesaban Nakhon) is that it must have a population of 50,000 and a density of 3,000 per sq. kilometer. Samui has an area of 247 sq. kilometers which means the density is only 202 per sq. kilometer with the recent increase in registered population to exceed 50,000 so less than 10% of what is required. I suspect this is the reason that the Governor found to send back the application as it is generally agreed that Suratthani Province do not want to lose the income generated by Koh Samui. However, this is Thailand and there is usually a means to an end. Maybe they have found a way to “adjust” the requirements, or make the facts fit the requirements. The other alternative is that they may be going for a “Special Economic Zone” much like Pattaya, although I believe that would require Government Approval. Whatever, something seems to be on the cards and we must wait and see what transpires. Watch this space!

Phuket is also complaining about lack of funds to expand its infrastructure to keep up with development and the present Prime Minister has suggested setting up an executive board to speed up development. The proposed board would end the problem of provincial officials having no authority to make decisions on important matters and depending on directions from Bangkok, said the prime minister. There has been a lot of local opposition to this and one critic stated - "I disagree [with the idea] if it interferes with 19 local administration agencies in the province and if it is set up to serve political purposes," The academic, who is an expert on power decentralisation, also suggested the government conduct a study about turning Phuket into a special administration zone like Bangkok and Pattaya. I wonder where he got that idea from!

Good news for real estate is that the Government has reduced taxes on transfers and the Press Release from the Revenue Department is copied below. The main reductions are for the Transfer Fee which has been reduced from 2% to 0.01% and for Specific Business Tax which has been reduced from 3.3% to 0.1%. Also the first Baht 150,000 of Personal Income Tax is now exempt and with regard to real estate this affects the first Baht 150,000 of the calculated gain on re-sale. This is a slightly complicated area which I will not get into in the Newsletter but nevertheless reduces any potential tax on re-sale.

There is a move (starting in Bangkok apparently) to enforce more rigorously the helmet law for motorcycle riders which would now include the passenger and the helmet has to be of International standards. I think we all know that the law in Thailand in one thing and enforcement another, but for those of you who chose not to wear a helmet (not sensible, but all too frequently seen here) the fine will be Baht 500 EACH if the BIB on the island decide to go along with their Bangkok colleagues. Another law due to be enforced from 1st May is the smoking ban in bars and restaurants. Designated smoking areas are required and if the Bangkok experience is anything to go by this means outside. Fines for non-compliance are Baht 2,000 to the customer and Bang 20,000 for the owner.

For the sailors amongst you the Seventh Koh Samui Regatta will be held next month between the 1st and 7th of June.

If you want to receive the full Ko Samui Properties Newsletter on a monthly basis please email me at hbonning@kosamuiproperties.com

Ko Samui Properties Newsletter April 2008

2008-04-09T16:17:00.002+07:00

In the last Newsletter we carried the news that The Governor of the Bank of Thailand announced that day that the Capital Controls implemented under the previous military government would be scrapped from the following Monday. The concern of many people was that by removing this control the Baht would strengthen more and make visiting Thailand and buying real estate here more expensive. Watching the Baht during the day on the Monday and the Tuesday it in fact remained very stable and actually weakened slightly over the two days starting at Baht 31.37/US$, falling to Baht 31.55/$US and by Wednesday had stabilised at Baht 31.47/US$. Similar movements were seen against Sterling and the Euro, so immediate concerns were alleviated. Since then it has stayed pretty much in a narrow range and as of today stands at Baht 31.41.

I have reproduced an article in the full Newsletter in which Mike Holehouse states that in general hotel occupancy was down by about 15% in 2007. For most of us living and working here this is certainly something that we have seen on the streets and whilst all bars and restaurants can have good nights the overall impression is that 2007 was not a good year. Certainly the re-emergence of Phuket as a favoured destination was a factor having recovered from the post Tsunami downturn but there are other factors which come into play, especially for business owners outside of the hotel trade. A hotel guest is to some extent a captive audience and the hotels will do everything they can to keep the guest in the hotel. This is accomplished in a variety of ways – particularly popular with the Asian traveller is the half-board package. Breakfast and dinner is provided in the hotel and often accompanied by some form of entertainment such as traditional Thai Dancing, a Cabaret or even Elvis Presley!! By the time they have finished eating and watched the show, for many it is time for bed. They might go out for a stroll and window shop but further eating and drinking is not high on the agenda. The other main factor being faced by bar and restaurant owners is increased competition. In both sectors numbers have increased dramatically over the last few years and continue to do so. On the one hand that is a good thing because there is now a vastly greater choice on a truly international scale, of differing quality I must add, but everyone is competing against each other for what certainly last year was a reduced number of customers. There are of course many factors in addition such as the strength of the Baht, the cost of airfares and accommodation in comparison to other Thai destinations, infrastructure and so on – none of which are likely to change in the short term. However the report also quoted in the Newsletter that Samui could soon have City Status is very welcome and will allow the retention of funding to address some of these problems. Is this situation going to continue through 2008? I suspect it will and anyone in business here is going to have to make that extra effort to get at least their fair share of customers. I believe this is some of the pain Samui must go through to make it right for the future, but once we get through this Samui will become a destination to be reckoned with.

This does however bring me to another point which sadly we see so often. The perception of life on a tropical island in Thailand is simply idyllic and for most of us that is the truth. However it is not easily achieved unless you have already made your fortune and no longer have to work. Too many people arrive here without being in that position and think that the lifestyle they wish to aspire to can be found running a bar. If they have had experience in the industry before they may well be right and there are number in that category who do pretty well. The ones who do not however are those who believe the only experience they need are the years sitting on the wrong side of the bar. For a start they do not know the true economics of how a bar works and that it is, particularly in a tourist destination like Samui, a seven day a week commitment with constant late nights and the temptation to drink the profits. It starts off well and all their friends come and drink for the first few nights to show support, but then they inevitably wander off to other bars and continue having the fun they had before leaving the new bar owner sitting behind the bar waiting for the passing trade. That is the first problem. Passing trade is just that. Passing. Discouraged and bored, he now employs someone to help run the bar and starts taking off with his friends for the occasional evening out. It is all down hill from thereon and a few weeks later he wonders why profits are down and all of a sudden he is losing money, running out of savings and desperate to sell. Any business is valued on its profits and of course what figures he can show probably now do not even support the money he paid for it. If only that was just an apocryphal story. Sadly it is not and one I have seen more than once in the last year. If you are thinking of buying a bar and do not know what the Heineken Test is – forget it!

Support for the Matt Hampson Trust has been exceptional with the three main events – The Golf Day at Santiburi Golf Club, the Race Night at The Pub and the “Head Shave” and Auction at Coco Blues bringing in a total of £8,700 as of today with more contributions still to be collected – so £9,000 is not out of the question.

Remember - Songkran starts on the 13th April – so be prepared to get WET!!

Latest News from Koh Samui

2008-03-05T17:17:00.000+07:00

The Governor of the Bank of Thailand announced today that the Capital Controls implemented under the previous military government will be scrapped from Monday. Although they had been significantly watered down since they were first implemented on 18th December 2006 they still applied to foreign investment in the bond markets and property funds but not direct investment in property and land. In the opinion of the Governor any rapid appreciation in the baht should be short-lived. I anticipate that we will see the margin between the onshore rate and the offshore rate narrow although, as before the reserve rule was implemented, I would still expect to get a better exchange rate onshore.

Support for the Matt Hampson Trust has been exceptional with the three main events – The Golf Day at Santiburi Golf Club, the Race Night at The Pub and the “Head Shave” and Auction at Coco Blues bringing in a total of £8,300 as of today with more contributions still to be collected – so £9,000 is not out of the question.

The Golf Day at Santiburi was well attended with 48 players turning up for a Texas Scramble competition on a beautiful day, quite hot but with the occasional breeze. As Ko Samui Properties were Sponsors of the Winners Trophy, I considered it my duty not to play well enough to win it myself and over did that somewhat by qualifying for the wooden spoon along with my partner for the day Graham! Such is life. The Golf Day raised Baht 24,000 and thanks go to Greg and Alex and Samui Golf for the organisation.

Race Night at The Pub in Fisherman’s Village was enthusiastically attended and apart from a moment when Dave Pritchard became technically challenged (a senior moment there Dave?) and showed the result of the 5th Race before it had been run, went off without a hitch. Nevertheless Dave and his lovely ladies on the Tote succeeded in extracting some Baht 30,000 from the punters and Steve (The Governor) Wilson then very generously contributed a further Baht 20,000 from his takings that night to the fund.

Coco Blues was the venue for two special events. The long awaited head shave of “Super Star” and “Poker Player Extraordinaire” Mr Lawrence Fay which alone had raised Baht 132,000 in sponsorship. Before the professionals got involved we sold 100 Baht snips and one of the first up to have a go was his lovely wife Oi – who was probably glad to see the back of the shaggy monster she had been living with since Christmas. Thanks go to John and Duncan for holding Lawrence to the promise he made in a bar (where else?) on Boxing Day and for strong arming sponsorship money out of half the island.

The last event was the Auction of various items of Memorabilia including signed boxing gloves from Steve Collins, Enzo Macarinelli, Joe Callzaghe and Ricky Hatton. We also had signed rugby shirts from the Ospreys Rugby Club, Leicester Tigers Rugby Club and an England shirt signed by the England Squad. There was a Rugby Ball signed by Martin Johnson together with his left boot also signed which he wore during the 2003 World Cup in which he led England to victory. Moving on from a past history with live stock, our very own professional auctioneer Mr Hywel Williams provided a very smooth patter and lively and humorous 45 minutes as he knocked down each item to collect a total of Baht 245,000. Thanks go to everyone involved in providing the items for sale and for turning up on the night and bidding so enthusiastically.

Roy Jackson, President of Leicester Tigers Rugby Club and Chairman of the Matt Hampson Trust was on vacation on Koh Samui and attended all the events mentioned and was overwhelmed by the support shown by everyone here. He gave further insights into this remarkable young man whose life was so devastatingly changed in a matter of seconds and who at the age of 19 was confined to a wheel chair and life support system for the rest of his life but who has risen above his own predicament to help other people in similar, and in some cases far worse, situations than his. All of us who participated in these events wish Matt the very best.

Matt Hampson Trust Koh Samui - update

2008-02-13T17:14:00.002+07:00

With the main fund raising activities taking place next week, this is where we are as of today Wednesday 13th February

The sponsored Head Shave has attracted a great deal of attention and we have so far commitments of Baht 128,000 (ca £2,000).

Memorabilia being auctioned on line as follows:
Subject: Steve Collins (The Celtic Warrior)Boxing Gloves - signed
Bids received as at 20.00 Monday 11th February - Baht 15,000

Subject: Enzo (Big Mac)Macarinelli and Joe Callzaghe pair of boxing gloves - one glove signed by each boxer
Bids received as at Midnight Sunday 10th February - Baht 25,000

Subject: Enzo (Big Mac)Macarinelli boxing Gloves - signed
Bids received as at 23.00 Saturday 9th February - Baht 2,000

Subject: Signed Ospreys Rugby Club Shirt
Bids received as at 22.00 Monday 11th February - Baht 5,000

Subject: Signed Leicester Tigers Rugby Club Shirt (2 maybe 3 available)
Bids received as at 13.00 Monday 11th February - Baht 5,000

Subject: Signed England Rugby Club Shirt
Bids received as at 20.30 Tuesday 12th February - Baht 11,000

Subject: Signed Martin Johnson's Boot as worn in the 2003 World Cup
Bids received as at 12.30 Wednesday 13th February - Baht 5,000

Subject: Rugby Football signed by Martin Johnson
Bids received as at 16.10 Wednesday 13th February - Baht 5,000

That gives a total as of today for Memorabilia of Baht 73,000 (ca £1140)

The Golf Day at Santiburi Golf Course Koh Samui on Tuesday 19th February has 26 entrants so far with more to book in. That alone gives a further Baht 13,000 (ca £203)

In addition further funds will be raised at "The Pub" Fishermans Village, Bophut, Koh Samui on 22nd February courtesy of Steva and Lek and Steve will be serving one of his famous Beef Stew and Dumplings!

The sponsored Head Shave and final Auction bidding will take place at Coco Blues, Chaweng Beach Road, Koh Samui on Saturday 23rd February in the presence of Roy Jackson immediate past President of Leicester Tigers Rugby Club and Chairman of the Matt Hampson Trust. Coco Blues will be contributing a percentage of all takings that evening to the Trust.
For further information please email hbonning@kosamuiproperties.com

Latest News from Koh Samui

2008-02-04T15:01:00.000+07:00

As reported last month in February we are supporting the Matt Hampson Trust. For those of us who have been involved in Rugby at various levels over the years and continue to support it even as spectators, this is a very worthwhile charity and any assistance or help will be much appreciated.
Tuesday 19th February 2008
A Golf Tournament in support of The Matt Hampson Trust will be held at The Santiburi Samui Country Club in Maenam.
Format: Texas Scramble
Fee: Baht 3,200 of which Baht 500 will be donated to the Trust.
If we can get 50 players that would be Baht 25,000 for the Trust.

Friday 22nd February 2008
“A Night at the Races” at The Pub, Fisherman’s Village Courtesy of Steve and Lek.
Come and place a bet on these DVD races with proceeds going to the Trust. .A fun night out for everyone with Steve’s special Beef Stew and Dumpliings, overlooking the beach in Bophut!

Saturday 23rd February 2008
Rugby at “Coco Blues” Chaweng Beach Road, Chaweng, Koh Samui.
22.00 – 24.00 Wales v Italy
24.00 – 02.00 Ireland v Scotland
03.00 – 05.00 France v England
Prior to watching the Six Nations games that night we will have the following fund raising events
Auction of
Signed boxing gloves from “The Celtic Warrior” Steve Collins
Signed boxing gloves from Enzo “Big Mac” Macarinelli
Signed Rugby Shirt from Leicester Tigers Rugby Club
Signed Rugby Shirt from the England Rugby Team
Signed Rugby Shirt from Ospreys Rugby Club
A boot from Martin Johnson which he wore in the 2003 Rugby World Cup.
E Mail bids being accepted now!! Contact me at hbonning@kosamuiproperties.com
The Highlight will be the Sponsored “Head Shave” of prominent Koh Samui Developer Lawrence Fay the Managing Director of Sabai Properties. As of this announcement this event alone has attracted sponsorship of nearly Two Thousand Pounds!

Are we any forward following the General Election last December? Not a lot but moving slowly in the right direction. The challenges and disputes over candidates legitimacy, the legitimacy of the PPP itself and vote buying required hearings by the Supreme Court and a number of new elections where candidates had been “red carded”. A coalition has now been formed and Samak Sundaravej was elected as the new Prime Minister subject to Royal approval. The next step will be the formation of a Cabinet which should take place next week. The coalition government now has 316 seats in the 480-member House. That includes seats from the Chart Thai, Matchimathipataya, Puea Pandin, Ruam Jai Thai Chart Pattana and Pracharaj parties. So now we have to wait for them to get their feet under the table and see what ideas they are going to come up with which effect foreign residents in Thailand. Hopefully we will have a better idea by next month.

From a business perspective things seem somewhat brighter. There does appear to be a real belief that things will now start to get better and that 2008 will be a totally different year to 2007. We have seen an increase in enquiries since the beginning of the year and deal we have been working on for some time now are coming to fruition.

Here is a question for you. Try to answer this before you go and look at an Atlas or Google Earth. If you dug a hole from my office in Chaweng straight through the centre of the Earth – where would you come out and what would be the nearest major City? (With thanks to Dave Pritchard for this little gem. Answer at the end of this Newsletter and anyone who disputes this is welcome to start digging! If you are not on the Newsletter Mailing List, send me an email for the answer hbonning@kosamuiproperties.com )

Some advance notice of a couple of Festivals coming up,
Chinese New Year will be celebrated from 7th to the 9th of February and the Songkran Water Festival will be between 13th and 15th April – although it tends to last a lot longer in some parts of Thailand. More news on that nearer the time.

Matt Hampson Charity Trust - Koh Samui

2008-02-04T14:36:00.000+07:00

MATT HAMPSON TRUST – UPDATE 4th February 2008

With just under three weeks to go to the main evening at Coco Blues on 23rd February this is the latest state of play re the Matt Hampson Trust fund raising.

“Lawrence Fay Head Shave”
This has created spectacular interest and so far we have commitments of Baht 126,000 or £1,957 at today’s rate. The “Head Shave” will take place at 20.30 on the Saturday night 23rd February and for Baht 100 you can have a snip yourself!!

Golf at Santiburi
This is scheduled for Tuesday 19th February and will be a Texas Scramble so chose your partner and get registered with Greg and Alex at Samui Golf. Entrance Fee Baht 3,200 of which Baht 500 will go to the Matt Hampson Trust Fund. The Winners Trophy is being sponsored by Ko Samui Properties, Nearest the Pin on Hole 4 by Lynx Developments, Nearest the Pin on Hole 12 by Santiburi Golf Course. Two sponsors still needed for Longest Drive on Holes 9 and 15.

Race Night at the Pub
Steve and Lek will be hosting a “Race Night” on Friday 22nd February at The Pub in Fisherman’s Village. Steve has also promised to provide one of his famous “Stew and Dumplings”. Horse Races, Donkey Races and possibly even Lawn Mower Races. Come and Pick the Winner!!

Auction of Memorabilia.

Boxing Gloves:
I have one pair signed by “The Celtic Warrior” Steve Collins and these are already attracting attention and bids. So far I have had three bids and the latest stands at Baht 8,000.

I have one pair signed by Enzo “Big Mac” Maccarinelli who will meet David Haye in an all-British world cruiserweight title unification fight on the 8th March in London. No bids as yet.

I have an Ospreys Shirt signed by most of the Squad, many of whom played last Saturday in the Welsh Side which beat England at Twickenham for the first time in 20 years.

Arriving with Roy Jackson direct from Leicester Tigers I will have
Two signed Leicester Tigers shirts
One signed England Shirt
One Rugby Boot from Martin Johnson as worn by him in the 2003 RWC Tournament.

Other items of relevant memorabilia yet to be confirmed will also be available.
We will be offering these on Ebay as well but this does not prevent anyone making bids to me direct by email. All bids will be timed so that if equal bids are received the first counts and I will keep bidders fully informed. Final bids will be accepted at Coco Blues prior to the “Hair Shave” on 23rd February.

For further details please contact me at hbonning@kosamuiproperties.com or +66 81 741 6443.

Koh Samui New Hotels and Tourism 2008

2007-12-31T12:58:00.000+07:00

First of all may I wish you all a very prosperous and Happy New Year. I have no comment on the result of the General Election as yet until we can see how the Coalition negotiations turn out and what proposals that come out of that.

You will see that in February we are supporting the Matt Hampson Trust. (see http://matthampsonkohsamui.blogspot.com/). For those of us who have been involved in Rugby at various levels over the years and continue to support it even as spectators, this is a very worthwhile charity and any assistance or help will be much appreciated. More specific details in next months Newsletter. So far we have attracted intriguing sponsorship including signed boxing gloves from Steve Collins, Enzo Macrinelli and Joe Calzaghe, Leicester Tigers shirts signed by their international players and our local champion Mr Lawrence Fay of Sabai Properties who has offered to have his head shaved on the 23rd February live in Coco Blues if we can get Baht 40,000 in sponsorship. I do not see that as a major problem - please email me for sponsorship foms!

More and more investors are coming to Koh Samui for the purpose of investing in the hotel scene. We have already seen announcements by Conrad, Park Hyatt, Mandarin Oriental, Hard Rock Hotel, Dusit D2, Alila Hansar, W, X2 and more recently a joint venture between Lehman Brothers and the Malaysian YTL Hotels and Properties of a site in Choengmon which they claim will be managed by a “renowned name”. We recently were instrumental in bringing to the island a famous name in hotels which is known internationally but which we cannot yet disclose. We have also received an enquiry from a major hotel group who wish to establish themselves here in Koh Samui as well as another foreign investor with a significant budget with the same idea. These are all 5-star hotels, a commodity in which the island has been severely lacking, but it is indicative of the way Koh Samui is moving up market and the faith major investors and international hotel operators have in the future of Koh Samui as a tourist destination.

There are very few large hotels on Koh Samui, and of the 264 hotels in our survey there are only two which can boast over 200 rooms and only 13 which have over 100 rooms. None of the new hotels planned exceed 200 rooms, and half have under 100, but a common feature to many is the combination of hotel rooms and villas for sale, not a new concept by any means but one which is becoming more prevalent as investors work to recoup their capital outlay quickly whilst still providing the required accommodation for the hotel management as the villas for the most part remain in the rental pool. It has been a common philosophy that for a hotel management company to provide the necessary Return on Investment (ROI) to the owner, a very minimum of 130 keys is essential and that still probably holds true for hotels in the 4-star category. What we are seeing here is the required ROI being achieved by higher occupancy and higher Average Daily Rates (ADR). This is achieved by good marketing, and of course the international chains have established worldwide marketing arms, but above all by providing exceptional service. The travelling public is becoming more discerning and demanding but is prepared to pay for quality. The United Nations World Tourist Organisation (UNWTO) report that tourism world wide is on the increase with 5.6% more people travelling in the first eight months of 2007 than same period in 2006 and that this growth is likely to continue for the rest of 2007. Regionally Asia Pacific is expected to grow by +10% whilst a slow down in the Americas, the Middle East and slightly in Europe. The Average Daily Rate for the new hotels planned for Samui is predicted at ca. $650/ night or Baht 22,000.

The good news to support this increase in tourists is the approval by the Environmental Authorities to allow additional capacity at Koh Samui Airport which should allow flights by Thai Airways to start and provide some competition although I will not be holding my breath to see significantly cheaper air fares. See the article below.

Once again I need to highlight the Thai Baht onshore/offshore rate issue. I am still seeing companies offering to buy and transfer Thai Baht at better rates than can be achieved at high street banks. For instance one company was quoting the Pound at Baht 65.6 against Baht 64.8 at the bank. The rate onshore here in Thailand at the same time was Baht 68.08 which would gain you Baht 124,000 on a £50,000 transfer. It was the same against the US Dollar – Baht 31.8 against Baht 31.4 when the rate onshore was Baht 33.49. A difference of Baht 84,500. They will even offer to transfer the funds without charge – well with transfer costs of less than Baht 1,000 I am not surprised. So you can see where they are making their money and none of them will tell you that you will not get the Foreign Exchange Transaction Certificate this way. ALWAYS send funds in your home currency, never in Thai Baht. In my experience you will always get a better rate here onshore and you will get the FETC. Also see the article later in this Newsletter re the future of the offshore/onshore rate divide.

For those of you who know him, Crispin Patton-Smith has at last been cleared of all charges and released from prison – see the story below. That he had to spend the last eighteen months in custody due to the unsubstantiated ramblings of a madman is a travesty and we all wish Crispin well on his return to civilisation.

The full Newsletter can be obtained by emailing me hbonning@kosamuiproperties.com

Koh Samui - Has the rain stopped? We think so!

2007-12-04T16:27:00.000+07:00

It is November. It is the rainy season. It is wet. ‘Nuff said!

That is how I opened last months Newsletter and I have included some of the articles from the Newspapers about “what happened next!” (If you want a copy of the full Newsletter email me at hbonning@kosamuiproperties.com ) Well we did get a lot of rain for a couple of days and the problem was that the storm, instead of moving on, sat on top of us for those two days. Consequently the amount of rain that fell was so much and consistent that even with the new drainage that was installed after the previous floods a couple of years ago, it was falling faster than it could drain away. It is true that in some places there was some severe flooding, especially around the Laem Din Market, by the Chaweng Lake and along certain sections of the Beach Road, but once the rain stopped the water did actually drain away pretty quickly. In some areas the floods were worse than two years ago especially around the Reggae Street end of Chaweng Lake and the north end of the Beach Road but the big difference was that once it stopped raining the water went away very quickly. Now that did not make the situation any better for the people who had been affected as the damage had been done, but at least they were able to get back to business once the water had subsided. Clearly a lot more needs to be done to make the situation better when we get this level of flooding and hopefully the move towards Samui getting City Status can provide the additional funds to do this. In this respect a consultation document was issued in September (but only just reached my desk) explaining what the authorities were trying to do and asking for the views of the local population. There was no date by when submission had to be made but we will be making further enquiries to see how this progresses. In the meantime it has been warm and sunny and many locals believe the rainy season was short and sharp and is now over. Michael Fish – eat your heart out!

There are three kinds of lies: lies, damned lies, and statistics
This well-known saying is part of a phrase attributed to Benjamin Disraeli and popularized in the U.S. by Mark Twain. Doing research into an article I am writing I accessed the Tourist Authority of Thailand web site statistics page for Koh Samui. Whilst it is mostly in Thai, certain sections are in English and of particular interest to me were the figures representing the hotel occupancy rates for 2004 to 2006. Each year is on a separate page so in order to make a meaningful comparison I consolidated the figures into a single spreadsheet. It was only then that it became obvious there was a huge error. The figures quoted for the second half of 2005 in every category were exactly the same as the figures quoted for the second half of 2006. Statistically impossible – or am I being glib? The reality I suspect is someone cut and pasted the figures, no one updated them and no one checked them. I also looked at the figures quoted for hotel rooms in Koh Samui and tried to reconcile their figures with my own. Let us just say we differ significantly. So far they have not responded to my emails asking if we can resolve this. I am quite prepared to accept it if I have made a mistake but I somehow doubt I have missed several thousand hotel rooms. The problem therefore is having found two quite significant discrepancies in two separate tables, how accurate are the remainder, and if they are not accurate, how do they help in planning for the future? I have a strange feeling I will be running up a face saving issue here and rather than resolve the problem, it will just be ignored.

The General Election is due to take place on 23rd December and it is anyone’s guess as to how it will turn out. There is the usual bickering between the various factions with allegations and insults flying around. Par for the course I guess. Nevertheless it must be good for the country to return to civilian rule where legitimate actions and legislation can set the country back on course and not fall behind the rest of Asia where foreign business is being made more welcome every day. I am still surprised, although having lived here for so long I should not be, at the number of people who want to whisper in your ear that they know someone in Bangkok who has the inside track on how this is all going to turn out and the Ministries have already been allocated. The funny thing is of course, no one has the same story! All we can do is wait and see. Then perhaps we will discover who really did have “informed sources”!

Who does an agent act for? Thoughts from Koh Samui.

2007-11-03T12:44:00.000+07:00

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.