Located off the east coast of the Kra Isthmus, Ko Samui is Thailand’s second-largest island after Phuket. With its beautiful sandy beaches, clear waters and choice of activities, it is a magnet for tourists seeking a taste of paradise. And with fast internet and good safety and happiness ratings on the Nomad List, Ko Samui is also a popular spot among digital nomads!
As a five-star island retreat, there’s always a steady flow of tourist arrivals all year round. It is not yet commercially overcrowded and as such, still has huge growth potential, with a plethora of upmarket hotels — Four Seasons, Renaissance and Le Meridien among them — swanky shopping malls and private hospitals for both emergency and cosmetic procedures carving their niche on the island.
It’s no surprise then that its luxury real estate market is flourishing: the number of affluent visitors has rapidly increased over the past five years, with British and Hong Kong expats accounting for the largest number of property buyers. It rivals Phuket as Thailand’s most attractive place to purchase a second home, being relatively inexpensive compared to luxury real estate in Europe and other parts of South-East Asia. With a diverse mix of nationalities investing in the property market, this ensures that the market is not dependent on any one nationality. The market is not propped up by the banks either, as foreigners are generally cash buyers.
Ko Samui’s overall property market value then becomes more obvious when compared to Hong Kong and Singapore, which has considerably higher land values. Capital appreciation over the past four years has varied from 15-20% annually, and some properties have seen their value appreciate by as much as 50-100% between the launch of the project and the transfer of title.
Thailand’s rental yields are among the highest in Asia, with excellent returns on the luxury property market and yields as high as 10%. Those who have chosen to let their properties have seen significant rental income, particularly during high season. This sector has seen considerable growth, and commercial real estate services and investment firm CBRE calculates that an actively managed property available for let should produce annual returns of 6-12% based on occupancy for 100 nights.
Ko Samui was granted municipality status in 2012. Since then, it has seen significantly better schools and transport links, along with leisure facilities such as golf courses and cinemas — on top of the previously mentioned medical services — making it ideal for retirees, investors and second home buyers. Prime oceanfront sites on the north-east coasts are highly desirable, with the south and west coasts catching up in popularity — and price.
Hillside sites with prime sea views, while limited in supply, are highly sought after as well, prompting increases in value and demand for inland properties. Where good design, planning and management are employed, projects are selling in an increasingly wide range of areas.