Cost of Samui homes to rise this year

By ROBERT GREER

HOUSE prices are expected to increase this year due to the rising cost of construction resulting from increasing costs of building materials and transportation, the Bank of Thailand has said. For Koh Samui residents, it means already expensive homes will become more expensive, and because of rising fuel costs, not just homes will see price rises.

“I would say a main part of this price increase arises from fuel,” says Kurt Meerveld of Palm Construction, a leading developer and builder of quality homes on Koh Samui. “The raw material has to get to the manufacturer, the finished good then has to get to the retailer and then the goods have to get to the customer. When you add on top of that the long drive from Bangkok to Koh Samui, including the ferry ride, the gas bill really begins to add up.”

Meerveld said another big reason for the predicted rise in housing prices is the cost of lumber. “Because of tight restrictions on the cutting of lumber in Thailand, a lot of it has to come from Malaysia. Again, because of the rising fuel prices, this will impact the lumber’s costs. The price of lumber is predicted to rise twenty-five percent over the next two months,” Meerveld told Samui Express.

Last year, demand for housing was in a decline owing to many factors, mainly an unstable government. However, the central bank realized this and gradually reduced the interest rate which helped turn the housing industry around.

Despite fuel prices and politics, however, it seems Koh Samui is experiencing its own housing bubble with outside influences not having a lot of effects on the island. For example, Bangkok is having a hard time moving condominiums and apartments while on Koh Samui, they are selling well.

“The unsettled political situation in Thailand, not the prices, is still by far the biggest factor causing many foreigners not to buy here, not to mention all the hoops people have to jump through to become home and land owners,” Meerveld said.

And it is not just the price of houses that is going to climb but also prices for everyday items. All the things we buy on this island must be transported in from somewhere, and that somewhere is usually Bangkok, which is a long way and a lot of gas off.

“That’s the price we pay for living on a beautiful tropical island,” Meerveld said with a smile. “The more remote you are, the more you have to be willing to pay for the things you want.”