Source: Bangkok Post

No sales at 82% of Samui properties

The slump in tourism since late last year has led to the failure of property projects in major tourist destinations in the first half, with Koh Samui the hardest hit, according to the property consultant Agency for Real Estate Affairs (AREA).

Managing director Wason Khongchantr said Samui had lower average foreign tourist arrivals per year than other destinations, or around 900,000 tourists, so it has suffered more from declining traffic.

Most residential units in Samui were luxury properties with an average price of 18.6 million baht a unit, second to Phuket where the average was 21.74 million. Average prices in Hua Hin and Cha-am are much lower, at 5.85 million baht, and demand in the beach towns close to Bangkok is mainly from Thai buyers.

“But the Samui property market was the worst in the first half, as 82% of the property projects were inactive with no sales, activities and construction,” said Mr Wason.

The average price of non-active units in Samui was 30.86 million baht, the highest among three destinations, followed by Phuket, with 15.9 million, and Hua Hin-Cha-am, at 4.7 million baht.

As of June 30, properties offered for sales in the three destinations totalled 302 projects with 15,551 units worth a combined 178.8 billion baht.

In Pattaya, Mr Wason added, the market was stable as most residential units were in the lower-end segment. Most of the tourist arrivals in Pattaya, which sees around 6 million foreign visitors a year, were from Russia, the Middle East as well as East Asian countries.

Mr Wason is conducting another survey on land price changes in the Bangkok Metropolitan Region in 2009. Preliminary indications are that 2009 will feature a declining growth rate again.

Since 2005, when the year-on-year land price increase peaked at 5.8%, the increases have fallen to 5.6%, 4.9% and 3.5% from 2006-08.

Mr Wason estimates the year-on-year land price increase in 2009 would be 3%.

Based on the current macro-economic outlook, the economy is unlikely to revive soon as the recession still grips most of the world. Thailand’s main sources of revenue – tourism and exports – are worse, contrary to the situation in 1997 when they were the only oasis, he said.

The highest average land prices will remain in Siam Square area, at 800,000 baht per square wah, according to the company’s appraisal.

“If the land plots owned by [Oishi founder] Tan [Passakornnatee] in the Phloen Chit area are really sold, claimed at 1.2 million baht a square wah, land prices in Siam Square will be higher than that price [1.2 million],” he said.

Each year land prices in Siam Square rise at least 10%, depending on the economic and property situation. The area with overall size of 63 rai is always attractive to investors, especially in retailing.

Following Siam Square will be inner Bangkok on Sukhumvit with an average price per square wah of plots between Asok and Thong Lor around 600,000 baht, up from 450,000 baht in 2006.

“Demand for land plots [in the inner city] remains active but supply is very limited,” he added.

Resort sales take big hit from tourism lull

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