Foreign developers on Samui suspend work

New height restrictions and uncertainty in amended act blamed

Property developers from the UK and Scandinavia have announced the sale of nearly Bt6 billion worth of their projects on Koh Samui, following a new city plan and a lack of clarity in the amended Foreign Business Act.

Research by the Agency for Real Estate Affairs indicates the new city plan on Koh Samui will mandate that property projects cannot be constructed higher than 150 metres above sea level. As a result, British and Scandinavian property developers planning projects higher than that must suspend them.

"Foreign investors have expanded investments on Koh Samui since 2004 to develop resort-property projects. Most of them bought land from local owners, and some plots did not have land titles, but rather only an authorisation certificate allowing people to make use of the land, not the right to sale and develop a property project. As a result, up to 10 property projects developed by foreign investors must be suspended and have been announced for sale to other investors," said Wason Khongchantr, the agency's managing director.

The project land on Koh Samui may be discounted 10-20 per cent from the average price of Bt5 million a rai for a sea-view location.

Meanwhile, demand for resorts and villas has shown only slight growth since last December, because foreign investors have adopted a wait-and-see attitude about whether the amended Foreign Business Act would affect their ownership in property projects. As a result, most foreign buyers have delayed decisions about buying new residential projects on Koh Samui and at other resort destinations.

To continue...
http://www.nationmultimedia.com/2007/04/11...ss_30031605.php

so many pretty colors........except for thailand (not adjusted for inflation as seen in zimbabwe numbers)

regardless, thailand is falling.....



 q1_2007_world.png ( 106.35K ) Number of downloads: 71



 returns_by_country.png ( 176.68K ) Number of downloads: 68

I'm sure buyers are lining up already....

LaoPo

look on the bright side , it should boost the market for land lower than 150m.

"to make use of the land, not the right to sale and develop a property project. As a result, up to 10 property projects developed by foreign investors must be suspended and have been announced for sale to other investors,""

So these new "Investors" - if they can not build property how are they going to get any ROI even with the discounts? - LOL

From a distance it seems like some giant ponzi or pyramid scheme finally unravelling.

i'm sure that some wholly owned thai investor companies will find a way to develop the land and make huge profits.

Exactly, wait till its all sold back to 'someone' at discounted prices and then watch the 150m rule disappear overnight.

Silly me - forgot the TiT (This is Thailand) factor. ;-)

My cynicism must be wearing thin - off to the PI in 2 hours sop maybe I might get the sheen on it back there

[sarcasm]Unless that View Talay Condo case is won by the plaintiff and a precedent is set... [/sarcasm]

It's funny... When one starts to talk... quickly other voices and datas are coming out...
But the market is still officially healthy...
What will be the next episode ?

Samui market in dire straits

Sales in Pattaya, Phuket also slow

KANANA KATHARANGSIPORN

The property market on Koh Samui is facing so many problems that some developers may dump their projects and offer them wholesale in overseas markets, while sales in Phuket and Pattaya have slowed due to capital controls and changes to the Foreign Business Act. Wasant Kongchan, deputy managing director of the property consulting firm Agency for Real Estate Affairs (AREA), said property sales and investments in the three tourist destinations slowed in the first quarter as foreign buyers were concerned about changes to Thai law.

Besides the nominee curbs and capital controls, Samui faced problems of land rights documentation and new environmental rules banning construction on land more than 150 metres above sea level.

Samui had 100 projects on sale worth around 60 billion baht, with only 10% offered in the overseas market.

''Buyers were not confident in the land rights documents,'' he said. ''Some projects may need to offer discounts of up to 100%, but they are overpriced by up to 300%.''

According to an AREA survey in March, the three areas had 175 resort properties with 9,721 units, worth 151 billion baht. Only 37% of the units had been sold.

[continue]
http://www.bangkokpost.com/Business/12Apr2007_biz46.php

With respect cclub75, this article is quite confusing.

This is the whole article from Bangkokpost:

*****************

Samui market in dire straits
Sales in Pattaya, Phuket also slow

KANANA KATHARANGSIPORN

The property market on Koh Samui is facing so many problems that

1. some developers may dump their projects and offer them wholesale in overseas markets, while sales in Phuket and Pattaya have slowed due to capital controls and changes to the Foreign Business Act. Wasant Kongchan, deputy managing director of the property consulting firm Agency for Real Estate Affairs (AREA), said

2. property sales and investments in the three tourist destinations slowed in the first quarter as foreign buyers were concerned about changes to Thai law.

Besides the nominee curbs and capital controls, Samui faced problems of land rights documentation and new environmental rules banning construction on land more than 150 metres above sea level.

3. Samui had 100 projects on sale worth around 60 billion baht, with only 10% offered in the overseas market.

''Buyers were not confident in the land rights documents,'' he said.

4. ''Some projects may need to offer discounts of up to 100%, but they are overpriced by up to 300%.''

According to an AREA survey in March,

5. the three areas had 175 resort properties with 9,721 units, worth 151 billion baht. Only 37% of the units had been sold.

6. Pattaya had 43 projects with 4,975 units, Pattaya (37%) sold

7. Phuket 73 projects with 2,792 units Phuket (47%) sold and

8. Samui 59 projects with 1,954 units. The lowest sales were in Samui at 26%,

followed by Pattaya (37%) and Phuket (47%).

9. But the residential market remained buoyant with 63% of units sold.

There were

10. 193 new residential projects in the three destinations with 21,284 units worth 61.58 billion baht.

AREA managing director Sopon Pornchokchai said the three locations still had strong potential but Samui faced more challenges than the others.

Phuket's average housing price was 3.52 million baht a unit, higher than 2.83 million in Bangkok, due to a lack of low-priced townhouses or condominiums.

11. In the first quarter of the year, the average land price in Phuket was 25 million baht per rai.

***************

I tried to break it down a little but failed as in # 3 they claim there are 100 projects in Samui, worth 60 Billion Baht (who says so?) and 10% offered overseas...
And in # 8 it's 'just' 59 projects..

But, the overall picture is that in the THREE major destinations, Phuket, Pattaya and Samui they still need thousands and thousands of new buyers...

Well, let's see.

LaoPo

100 projects at 600 million each sounds very likely.

However, it should be stated that this is value is based on projected total sales, typically they build off plan to order, so ultimately the value is likely to considerably less than what has been quoted here.

this article has also posted in the Samui section as well.

I was quite interested when I read this part...




RAZZ