Like the rest of Thailand, Samui’s property industry has suffered over the last 12 months and there are numerous reasons for this. Proposed amendments to the Foreign Business Act (FBA) that will make the laws surrounding buying and owning property more restrictive have been a major concern; tighter visa rules have also had an impact; the strong baht; and the country being under military rule are all factors that have affected buyer confidence and deterred some investors from entering the market at this time.

However, it looks almost certain now that any changes made to the FBA will be after an election and, therefore, decided upon by a democratically elected government; visa applications seem to be being considered a little more fairly at the moment; and the aforementioned election is set to go ahead on the 23rd December following the successful referendum that saw the Thai people accept the new draft constitution.

So the imminent return to a democracy, along with the other factors, seems to have combined and eased property buyers’ fears. In fact, the response on the island has been almost immediate. Nicky from Koh Samui Land & Homes states, “Throughout the last year interest in properties has remained high and there have been many periods of increased activity. But a number of interested buyers were holding back until things settled. At the moment we are again going through a very busy patch with considerable interest being shown. But the positive difference at the moment is that people are following up the interest by actually completing the purchase rather than sitting back and waiting to see what happens.”

This is something that is being mirrored with other agents around the island. Alex from Horizon Homes agrees. “Things are definitely looking up at the moment, sales have risen over the last month and, as time goes on, all of those who’ve deferred their decision to buy will suddenly burst back onto the Samui property scene. Whatever political and legal problems there may be, people will always want to buy into the dream Samui lifestyle.”

Japhy from Samui Villas & Homes is also very upbeat and optimistic about the future of the market, “Investor confidence, as seen in terms of completed purchases, as opposed simply to interest in property, has increased noticeably in recent months. Relief on the political front and the decision to defer amendments to the FBA; the passing of the constitution draft; and the up-coming election are all positive factors. There’s a real belief in Thailand, not only a tourist destination, but as a lifestyle option, and there’s a huge pent-up demand for units of various types in resort areas. Future easing of the political situation and legal issues will certainly effect another growth cycle for our industry.”

There are other issues that seem to be less of a problem now than they were a while ago. For example, when the law, surrounding property ownership through a Thai registered company was first enforced more strictly, the signs weren’t good.

Sensationalistic headlines suggested the Thai property market was doomed; that was always unlikely but there was a very noticeable impact. In fact, it seemed that people within the industry continued to fight and argue this legal issue and that added to buyers’ confusion, decreasing confidence and the slowing of sales.

Now the market is very different and the acceptance of the leasehold system is evident in the marketing of properties. By embracing the lease and operating within the ethics of Thai law, and with flexible legal contracts being prepared to account for any future changes, people’s confidence in the lease has grown beyond recognition. And, in addition to this, the fact that a period will be given for people to restructure their existing ownership, should the laws be amended, all helps to ensure that you will not be left high-and-dry without any assistance, or come-back, on your property investment.

Another confidence builder is the emergence of branded hotel groups on the island. The Four Seasons; W Hotels and Conrad are examples of hotel brands that are very influential. These are companies that spend so much time and money in setting up new hotels that they are pretty good at choosing the right destinations. A lot of research takes place before a decision on location is made and everything has to suggest the feasibility of opening a successful resort in that area. Only then do they go ahead.

Robert Collins of Savills states, “The fourth quarter of 2007 represents an evolution in the Samui property market, in terms of development direction, as the Conrad and The Estates at The Four Seasons will officially be launched; signaling a new and up-market trend. The much-anticipated arrival of such prestigious five-star hotels is increasing the island’s international recognition and will undoubtedly raise annual tourist arrivals over the next few years.”

And, finally, Thailand’s position as a member of the Association of South East Asian Nations (ASEAN) could well be the driving force behind further positive changes. ASEAN will require a strict adherence to WTO policy, with similar investment laws, currency laws, and treasury laws, etc. for each member country, before any agreement to support each other’s treasury reserves with cash to buffer volatility in currencies.

Thailand will benefit greatly from this increasingly important membership, and meeting the requirements by updating its policies would see the Kingdom enter the future era as part of a powerful economic force created by the unity of ASEAN.

Rising investor confidence and the arrival of major brands on Samui has had another knock-on affect on the market. In fact, confidence in branding and major internationally recognised companies has seen off-plan purchases become a popular concept once again. It appears that when dealing with the kind of companies that now have a presence on the island, all of the fears and horror stories sometimes associated with buying off-plan are no longer an issue and will not deter potential buyers. Infinity Samui is a fine example of this with the project now being 80% sold off-plan.

The sudden increase in activity on Samui is confirmation that the market is moving onwards and upwards. The fact of the matter is that whatever obstacles there are, or will be in the future, Samui is an exceptional location for an investment property, a holiday home, or a full-time residence. And the charm and wide ranging appeal of the island continues to be a very powerful attraction for international property buyers.