|
Friday, August 1, 2008
Welcome to www.samuipropertyonline.com,
the online version of Samui Property, an independent monthly property &
real estate newspaper published by Siam Map Co. Ltd., Koh Samui,
Thailand.
Samui Property offers impartial, objective
news articles, stories, legal advice & information, zone maps, photos,
classified adverts and features about real estate, property, villas,
developments, homes, house and land for sale and other real estate
related items on Koh Samui.
Please come back every month for fresh
news and information on the Koh Samui Property & Real Estate Market.
Shifting The Focus
Completed or second-hand homes are becoming a more attractive investment option.
With rising oil prices and struggling worldwide economies becoming more of an issue, the risk factor of buying properties also increases. In Thailand this year, the price of construction materials has already risen considerably and, if you add on the additional costs of transportation with fuel charges reaching incredible highs, then the knock-on effect on the real-estate market is a distinct possibility.
The resulting concerns that arise exist mainly in the building and selling of new homes. Off-plan buying has suffered some bad press in recent years with a very small minority of unfinished, or, in some cases, un-started projects stealing the media attention away from the much higher number of successfully completed off-plan developments. It’s a classic example of one bad apple spoiling the whole barrel.
Unfortunately, this is the way of the world and it only takes one example of foreign investors losing their deposits on unfinished or abandoned developments to cause widespread fear amongst some investors.
The current economic situation does raise certain issues and it definitely heightens concerns about buying property. On some on-going or new developments prices will need to be adjusted to account for the rising costs of the necessary materials and transportation, making the final price of unfinished properties somewhat unstable. The same factors could also mean that second phases of some projects may be put on hold or remain unfinished.
It’s certainly not the case with all projects on Samui. The island is fortunate to have a large number of current developments that are being completed prior to being sold. And, there’s also far less risk attached to buying off-plan from a branded or long established developer who has the finances to complete any projects they may have started.
Potential and projected investment returns and capital growth remain positive and when buying off-plan there’s usually greater scope to make bigger financial gains. Therefore, many big-money investors will still be prepared to take an educated risk on which new properties to invest in. However, it seems inevitable that any project which is relying on the income and deposits from sales to complete the construction may well be facing very difficult times ahead.
But it’s not all bad news. Despite the concerns of international economies and oil prices, and the risks attached to buying unfinished properties or those on phased developments, there’s raised attention likely to be focussed on the used-home market.
Demand for properties on Samui continues to be high and capital growth and rental returns are predicted to continue rising. The likely result of this is that those investors who prefer less of a risk, or those that are seeking a personal holiday home or full-time residence, could see buying second-hand homes as the current safest option.
It’s always been known that at some stage Samui’s second-hand market would become prominent. Throughout the evolving years of real-estate on the island the spotlight has always been on the many exciting new projects. Now may be the beginning of a shift in that focus.
Sales of used homes have improved dramatically in the first half of this year as it would appear that, in the current global financial climate, many buyers prefer to be able to see and feel exactly what they’re getting for their money.
With a completed or second-hand home most concerns, risks or issues are either greatly reduced or completed eliminated. Rising construction costs and transportation of materials are irrelevant; worrying about whether your home or the neighbouring homes will ever be finished is of no concern; cutbacks by the builder in terms of quality, workmanship and the type of materials used in finishing the property on budget are of no importance; and considerations such as the size and practicality of the home are something that can be physically tested. It’s also often the case that the surrounding area of a used property is well established so you can see what is in the immediate area. This can be comforting to some buyers who would otherwise be concerned about what may be built in an adjoining empty plot.
The time-factor could also become increasingly important for all investors, whatever their intention for the home. For example, if you’re buying a home to let then it’s probably even more important now that the property can be rented as soon as possible to begin earning a return on the investment. Similarly, if you’re buying property for a private holiday home, or a permanent residence, with a second-hand home there’s no timescales or building schedules to worry about.
Real-estate throughout Thailand has been through a number of changes in recent years and yet throughout all the previous fears, concerns and scandals, demand for homes on Samui has remained very strong. Real-estate on the island continues to be a major employer and income generator and the signs for the future are very promising. In fact, compared to most places, the market here is surprisingly buoyant despite the world’s problems.
All property markets go through different cycles, trends and periods where business is better than others. Samui’s market is no different. But the government is making changes and encouraging foreigners to invest into the Kingdom and tourism to the island continues to bring new people who want to enter the property market.
The current global situation could mean that the market changes slightly with completed or used properties becoming more popular. At least until the world’s economy problems ease and people’s perception of risk once again alters.
In any event, real-estate on Samui is here to stay. Fortunately, the focus of the industry will always be able to change and develop to deal with market forces and external influences which affect attitudes of both buyers and sellers. Whilst the demand for property remains, the appropriate homes will always be available on Samui to suit the needs and requirements of those wishing to buy; whether that’s off-plan, newly-completed or second-hand. |
