Lin, who by then already owned four residential apartments in Bangkok, immediately bought a three-room villa on a 3,500-square-metre site in The Estates Samui, a development on a private beach in the stunning Laem Yai Bay area for about US$4.2 million (RM13.27 million).
"It's paradise. If you have money, you just can't resist buying a villa there," said Lin, a major shareholder in a Dalian-based developer.
He had planned to enjoy his paradise three or four times a year, but that did not work out. "I was shocked when the political crisis led to the closure of airports," said Lin, referring to unrest in late 2008. The country again witnessed a spate of political violence this year, with the military cracking down on anti-government protests in May. "I used to visit Thailand three or four times a year, but that changed in the past two years," said Lin. Thailand, he rued, had a reputation for being a safe country for tourists but the political crisis has dampened its tourism and property markets. "Many of my friends who had shown interest in this project now want to wait and see."
Amous Lee, director of Knight Frank's international investment department, agreed the political crisis had hit the property market in Thailand, with some developers cutting prices by as much as 10%.
Official figures from the Ministry of Tourism and Sports show that the number of international tourist arrivals at Suvarnnabhumi International Airport increased by as much as 12.72% during the first five months of this year, compared with the same period of 2009, from just 3.79 million international travellers in the first five months of 2009 to 4.25 million international travellers in 2010.
"If we compare monthly, we can see the sharp decrease in 2010 starting from the months of April and May when the anti-government protest took place," said Lee. The figures show a significant drop of 23.5% of international tourist arrivals in May 2010, compared to May 2009. The majority of the tourists, from East Asia, dropped by 37%, followed by Oceania and America, representing 25.4% and 24.2% respectively.
He said domestic political violence has wiped out most tourism from Thailand's main markets such as China, Taiwan, Hong Kong and Japan. European arrivals will also slow down due to the eurozone's debt crisis. Many hotels as throughout the country will be offering 50% discounts under the "buy one, get one free" campaign.
But Lee said sentiment has been improving and developers have restarted marketing their projects after a brief suspension during the past four months. They are also testing the market by providing buyers more incentives, according to Lee.
"We do not see any major price correction but developers will throw in more freebies such free hotel accommodation in their mixed-use developments. They will also offer more payment options," said Lee, who is helping his client Banyan Tree market a project in Phuket. An exhibition of the project will be launched in Hong Kong in October.
Foreign buyers cannot get mortgages for Thai properties, and usually pay cash in one go. But developer may now allow them a 24-month instalment option or even provide mortgages.
"The political uncertainty has doubtless somewhat influenced our foreign target market's thinking, although Thailand still enjoys the confidence of many buyers," said James Knowles, vice-president of The Estate Samui developer Minor International's residential property sales and marketing department.
Knowles said foreign buyers' interest, especially among China buyers, would come back. "Koh Samui is one of the most popular island destinations in the world and only a short distance from the Thai mainland... Last year, some 47 million Chinese travelled abroad. A growing number of China visitors have approached us and expressed serious interest in southern Thai real estate."
Lee of Knight Frank said foreign buyers would begin to flow back to the market only when a more liberal climate is established.
Lin also believes that China buyers will come back when the country's political uncertainties are resolved. Thai property remains cheap compared with that in China and the appreciation of the yuan would also prompt the Chinese to buy, he said. — South China Morning Post
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