Island getaways for a steal

The buzz about Thailand’s real estate market tends to revolve around the new, glamorous, big-name projects: high-end investment developments, luxury condos and villas, and other upscale properties. And it’s plain to see why, as glitzy projects clearly have the most sex appeal. But what about properties designed for more mid-market consumers — buyers looking to spend, say, 150,000 pounds sterling, or roughly Bt9 million? People, for example, who might be in search of a somewhat simple weekend getaway home at the beach? How big are such houses or condos? How close might these homes be to the beach? What kind of sea views — if any — are available? Following is an examination of what two popular locales — Koh Samui and Phuket — have to offer in this price range.

Thai real estate hit by strong baht

Not only has the strength of the Thai baht become a major concern for exporters, but it has also had implications for Thailand’s real estate sectors. The rapid increase in the US dollar-Thai baht exchange rate has largely been explained as weakness of the US dollar around the globe, and more recently by continued inflow of foreign capital to Thailand, particularly via the stock market.

Resorts buck the property trend

Although the property market in Bangkok and its surrounding area has shown signs of dropping 10-20 per cent this year, property developments at the country's tourist destinations are recording strong growth of up to 10 per cent. The main developments include resorts and villas at beach destinations such as Pattaya, Hua Hin, Cha-am, Koh Samui and Phuket. A recent survey conducted by Ocean Property has shown, for instance, that the property market in Hua Hin and Cha-am has grown 10 per cent this year, following investments totalling Bt22 billion since July 2006. Of the total, Bt10 billion has been invested in detached housing, Bt10 billion in hotels and resorts and Bt2 billion in condominiums. Ocean Property itself has spent Bt1 billion to build the Asara Villa and Suites luxury resort in Hua Hin.

CB Richard Ellis expands to Koh Samui

In 2004, a second office was opened in Phuket and CB Richard Ellis is now the leading international agent on the island offering a range of services from property sales, management, investments and land sales, and valuation and research to the Phuket market. There is no substitute for a local presence, so CBRE is opening a Samui office in order to better service their clients either living or looking to invest from overseas in the island.

Million-dollar homes for Koh Samui

Koh Samui, once a popular island getaway for backpackers, is turning into Thailand's latest market for million-dollar villas, international real-estate firm CB Richard Ellis (CBRE) said Tuesday. "Although 50 per cent of the villa developments in Samui are in the $1 million and below price range, we are spotting an emerging market for top-end villas which achieve prices in excess of $2 million," said Prakaipeth Meechoosarn, manager of CBRE's newly opened Samui office.

Investors Push Cambodia on Real Estate

PHNOM PENH, Cambodia - Foreign investors pushed the Cambodian government Tuesday to allow foreign ownership of buildings, apartments and condominiums, saying such a step is important to advance the country's economic growth. "It will help further develop the real estate market in Cambodia," said Bretton Sciaroni, an American lawyer, in a speech at a government forum Tuesday. Sciaroni cited the examples of Singapore, Thailand, Malaysia, Indonesia and the Philippines, which all permit foreign ownership of apartments and condominiums.

Credit squeeze could cause some ripples in local market

Sub-prime meltdown in the US will ultimately affect the cost of borrowing and the ability to do so in Thailand because a lot of funds that flow into this market come from institutions in US and some of them have been affected, says Nigel Cornick, the CEO of Raimon Land Plc. Financial institutions' general risk awareness increases when there is talk of mortgage defaults, repossession and price slumps, ''so those things tend to spread even though [the real impact] may be confined to America'', he says.

Thai demographic trends point to rapid rise in proportion of elderly population

Faced with a seismic shift of 14 million baby boomers into the country's dependent elderly population by 2025, Thai society and its economy risk being ripped apart. The impact of the spiralling number of aged and dependent on Thai society will undoubtedly be violent but problems may be avoided if the public and private sectors work together.

Current rules related to foreign investment are very confusing

Attempts to amend the Foreign Business Act this year have led to foreign investment in the Thai real estate market plunging, says Lars Lang, a partner of Thai Estate Scandinavian Company, a niche developer. Scandinavians in recent years have been active investors in Thai property, but lately the big players have become very hesitant about large-scale commitments, says Mr Lang. Individual Scandinavians are still buying but are shying away from anything costing more than seven to eight million baht.

Property funds at risk from capital controls

The situation is forcing foreign investors not to exercise their capital-increase rights, Virapan said. The Ticon Property Fund is seeking to increase its capital by Bt2.3 billion, but foreign shareholders, when offered the right to increase their investment, have declined to do so despite the fact that this would see the percentage of their stake diminish. However, GE Real Estate Investment Holdings last month acquired Bt525 million worth of shares in the Ticon Property Fund, which is managed by ING Funds.