A Hotspot for Property Investment in Koh Samui

A Hotspot for Property Investment in Koh Samui

Currently, the most sought-after destination for property investment in Thailand is the gloriously beautiful island of Koh Samui, where the influx of tourist arrivals has soared over 2.3 million in 2017, a remarkable increase from the 1.2 million visitations in 2016. The mounting numbers of tourist visitations are causing an economic spur in the Koh Samui property market with more buyers seeking residential property from which to generate substantial rental income. The continuously increasing demand for residential property is causing an escalation in value, making the island the present-day hottest spot for real estate investment in Thailand.

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A majestically beautiful island nestled in the Gulf of Thailand, Koh Samui boasts clear white sands and emerald waters. Renowned for its beauteous scenery and progressive nature, the island has long since been a popular destination for vacationers, investors, and retirees. The mounting demands for residency opened the floodgates for high-end developers to build stunning residential developments all around the island – offering investors luxurious beachfront and Seaview villas from which to generate attractive rental returns and capital gains. The rental income receivable from a Luxury Samui Property stands at 6 – 8%, and while capital appreciation has been increasing by 15 – 20% annually – some off-plan properties have appreciated by as much as 50 – 100 % between the launch of a project and its completion.

 

Major players have taken notice of the current flow of interest in the Samui property market and in recent years, a large number of luxury hotel chains such as Conrad, Four Seasons, W retreat and Ritz Carlton have invested on the island, enjoying the benefits of the 7% increase in revenue per available room, resulting from growth in both average daily rate (ADR) and occupancy which grew by 4.4% and 2.7% respectively as of Q2 2018, compared to the same period of previous year. The current market occupancy rate is at 75%, expected to rise exponentially –  attributing to the island’s many charms and its plethora of leisurely activities available for tourists to indulge in. The Ang Thong National Marine Park, a beautiful archipelago of 42 islands featuring limestone mountains, lush forests, pristine white-sand beaches and some of the most spectacular sceneries in Thailand, is within sight of Koh Samui and contributes to the island’s main attractions. With a seamless blend of natural wonders and urbanized dining and entertainment venues at easy accessibility, Koh Samui will unquestionably remain a destination of high appeal for tourists worldwide.

 

Further securing the positive outlook for investment on the island is the escalating number of international passenger arrivals in Samui International Airport. With numbers growing by 15% since 2017, Koh Samui’s alternative access point, the Surat Thani airport has had to lend a helping hand by increasing aircraft accessibility, causing arrivals to rise by 19% from 6,665 to 8,228 flights. Although at full capacity, the Samui International airport fulfilled demands by increasing direct flight connectivity from major financial hubs such as Hong Kong, Singapore, Malaysia, and China. With an estimated range of 40 to 50 direct flights to Koh Samui from these countries, including new routes from Guangzhou (daily flights), Chengdu ( three flights per week) and Changsha ( four flights per week), the number of affluent investors seeking to invest in this highly desirable destination is at its peak. Moreover, as property prices skyrocketed in Hong Kong and Singapore, untapped markets in resort cities like Koh Samui gained monumental interest for investors as lucrative alternatives. Thailand also poses no punitive stamp duty for foreign nationals, unlike Singapore and Hong Kong; which heightens the appeal of the country’s property investments.

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Another exclusive aspect that sets the island apart, is its unique environmental building regulations limiting construction to 3 floors with a maximum height of 12 meters. Regulations such as this one guarantee protection of the island from urbanized high-rise skylines that other beach destinations in Thailand, such as Pattaya and Phuket offer. Additionally, since condominium licenses were suspended in 2015 and are still under suspension to this day, investors have the opportunity to invest in extravagant villas positioned amongst lush greenery, offering unobstructed views of the emerald waters of Koh Samui.

 

Koh Samui’s beauteous lands, extravagant lifestyle and easy accessibility contribute to its prolonged growth even during political disturbances and flat global market periods, making it a solid investment for the future. With real estate market prices projected to soar from 6 – 10% all through 2019 up until 2020, and land appreciation at a 15-20% annual growth rate, it’s evident that the island’s wealth is in its lands- promising real estate investors very attractive yields and rewarding capital gains should they decide to invest.

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