July 3, 2006
Koh Chang is simply a gem in the rough. And set in the Gulf of Thailand 270kms southeast of Bangkok, agents and developers alike say Koh Chang is only beginning to shine.
A national park covers about 75% of the island, helping preserve a rich evergreen forest that clothes dramatic hillsides rising from a narrow coastal strip. Beaches, waterfalls, coral gardens and bird life abound.
Impressed by the island’s development potential, Prime Minister Shinawatra paid a visit in 2002 and heralded his vision for the future of Thailand’s second largest island: Thailand’s next Phuket, a playground of the rich.
Not long after, a US$12.5-million tourism development plan under a government economic stimulus scheme was jointly drafted by state agencies including the Tourism Authority of Thailand, the Town and Country Planning Department, the Forestry Department, and the Trat provincial authority.
Turning Koh Chang into a “second Phuket” would see road construction projects, wastewater treatment and garbage disposal projects, and three projects to develop tourism facilities put into action. Huge swaths of beachside land were quickly snapped up by land speculators from the island’s largely indigenous fishing and farming community that had held title deeds for generations.
Resorts of all sizes went up along the island’s west coast over the next few years. Land that had sold for Bht300,000 a rai in those heady days now sells for an average of Bt5 to 6 million – if it can be found.
The west coast of the island is basically sold out, said Roland Steiner, the Director of Siam Royal View Group, a pioneering outfit that is building the Siam Royal View, a massive 360-rai condominium development in the first building phase.
Siam Royal View has sold a lot of beach front in pre sales, explained Steiner, who said that 60% of phase 1 plots are sold. There is a huge demand for products such as these in Koh Chang but none seems to be available. We are holding back on making subsequent sales because we need to keep building. Demand is outstripping supply.
Why the demand? Steiner’s explanation is that both the new local airport in Trat and the new international Suvarnabhumi Airport are having a dramatic affect on how new property investors are looking at southeast provinces like Trat. Places like Pattaya are becoming too congested for some people looking to get away from it all.
A pristine destination like Koh Chang has a lot of attraction for people in Bangkok, he said. And business is good.
Koh Chang is essentially experiencing a second wave of land buying. Those who bought land following the Prime Minister’s proclamation are now selling, and this is pushing land prices to a premium. On Koh Chang’s tourism heavy White Sand Beach beach, a rai of land can easily go for Bt20 million. One bar owner said he was offered Bt40 million for his land and business which sits on less than a rai.
However, in many places, the island still lacks in suitable land or residences for the person looking for a weekend get-away condo or retirement home.
Ian McNamara, an up-and-coming real estate agent on Koh Chang puts it simply: The land is overpriced and there is no infrastructure in place to attract people willing to spend money.
McNamara, who operates a website as the basis of his real estate business, puts the lack of buyers and developers on the island down to several reasons.
Firstly, he explained that the lack of basic infrastructure was a hindrance. He refers to the fact that the island voted against the government in power during the last federal elections and so several key projects were put on hold. Saying that, the TOT has only recently got around to putting in telephone lines along the full length of the west coast. And despite promises from the government, piped water remains the responsibility of private land owners.
Another reason is the lack of bonded real estate agents. Said Siam Royal View’s Roland: Real estate agents are popping up. The whole industry is starting up. Before we came there was no private real estate sector, but scouting for land is happening. There is loads of untapped potential on this island. Farmers and fishermen are waiting to sell land. Koh Chang is definitely a place for experienced land scouts to make a good living.
McNamara maintained that land was very overpriced on the island and was unlikely to go down in the short term. However, this was only the case on the more developed west coast of the island. McNamara is adamant that the small-scale investor should pay special attention to the east coast of the island.
He explained that while on the west coast it is unlikely you will find beach plots, there is still quite the an availability of small plots of titled land next to quiet local villages which aren’t home to dozens of identical shacks selling beachwear, as in the touristy west coast.
There is also an array of stunning mountain and bay scenery on the east coast. The days of real bargains have gone, but land prices are still significantly cheaper than those on the sunset side of the island, said McNamara.
He explained that well located Chanote titled land can still be had for Bt1 to 1.5 million/rai. Beachfront goes for Bt4 to 5 million for a single rai with access from the main road. Three to five rai plots of Chanote or NS3 title land go for about Bt3 million.
He maintained that people are selling plots on the east coast and prices are unlikely to go anywhere but up.
Land prices really won’t go down on the east coast, he said. Many places will remain unsold for the next while but people will eventually come in and buy, and then prices will go up. You can see that happening on the east coast because, you want privacy and no backpackers.
Woohoo. Got my name in the papers as an up and coming real estate agent of all things. 2006-07 was the boom year for real estate sales. Since then sales at all developments have dropped off dramatically.