Real Estate Madness in the Land of Smiles

[Brunolem]

Thailand real estate market is, well, not same, in the sense that prices only go up, whatever the demand may be. 

 

There are loads of half empty buildings where, years after completion, the prices haven't gone down one bit in order to try to fill up said buildings. 

 

That wouldn't be good for the actual occupants, who certainly prefer to carry the full cost of maintenance, or see their property rapidly decay for lack of maintenance. 

 

Not so long ago, a price of 100,000 baht per sqm was a rarity, that would allow the lucky buyer to get an appartment with its own private pool, in the best corner of Bangkok. 

 

Today, such a ridiculous price won't get you much. 

 

As a matter of fact, prices are getting so high, that they'd better be expressed in USD, so that one could make direct useful comparisons with prices in Beverly Hills. 

 

One notable difference though is that in Beverly Hills, one can expect to later sell one's home at a higher price, while here in Thailand one shouldn't expect to be able to sell later, at any price... 

 

Having said all that, if you have a few million (dollars) to spare, you might be tempted to buy one of these houses... 

[NCC1701A]

yes it is not the same in anyway. I used to flip houses in California. Thailand is Bizarreo world and the Twilight Zone combined.

[johng]

[blackcab]

The new land tax takes effect from 1st January 2020. From that date owners of unused vacant land will be taxed at an ever increasing rate. As the years go on, the vacant unused land will be taxed more and more.

 

This might have some effect on unused vacant land.

[johng]

5 minutes ago, blackcab said:

owners of unused vacant land will be taxed

Can't they just put a Soi dog  and /or goat on it and call it a farm ???

[blackcab]

Not really. 75% of the land must be used for the purpose of agriculture. What defines agriculture is a matter of interpretation of the government officers.

 

In which case I don't expect that putting a couple of buffalo on 10 rai of land in the Central Business District is going to work.

[topt]

3 hours ago, blackcab said:

n which case I don't expect that putting a couple of buffalo on 10 rai of land in the Central Business District is going to work.

And there I was thinking that bullsh** was a highly prized commodity on TV.........????

[madmen]

If you want to know where BKK real estate is heading look no further than the q condo that adjoins Nana Bts . Prices range from 1 million to 4.5 million USA dollars !!! and its a red light area where your first greeting after the lift down to Sukhumvit could be a grab by the nuts from a lady boy.

 

I bought lower suk 13 years ago before the boom for peanuts in comparison and before the Chinese got Woke but even then when it was cheap EVERYBODY screamed dont buy ! wait its a bubble..the baht will implode ! Well they got that wrong 

 

so I walked over to the Q condo office and the notice board had most of the 1 mill condos blotted out ..sold off the plan. Punters especially Chinese are snapping up everything They can.  The only other cosmopolitan cities are Singapore and Hong Kong..to late for those though

[BritManToo]

1 hour ago, madmen said:

.sold off the plan. Punters especially Chinese are snapping up everything They can.

Deposit off plan would be a more accurate description.

They aren't actually sold.

 

[Brunolem]

12 hours ago, madmen said:

If you want to know where BKK real estate is heading look no further than the q condo that adjoins Nana Bts . Prices range from 1 million to 4.5 million USA dollars !!! and its a red light area where your first greeting after the lift down to Sukhumvit could be a grab by the nuts from a lady boy.

 

I bought lower suk 13 years ago before the boom for peanuts in comparison and before the Chinese got Woke but even then when it was cheap EVERYBODY screamed dont buy ! wait its a bubble..the baht will implode ! Well they got that wrong 

 

so I walked over to the Q condo office and the notice board had most of the 1 mill condos blotted out ..sold off the plan. Punters especially Chinese are snapping up everything They can.  The only other cosmopolitan cities are Singapore and Hong Kong..to late for those though

The Chinese, who are less and less snapping with their sloooowing economy, can only buy up to 49% of the units, which is why most condos end up half empty, even years after completion... 

[chrisandsu]

On 3/14/2019 at 1:53 AM, blackcab said:

The new land tax takes effect from 1st January 2020. From that date owners of unused vacant land will be taxed at an ever increasing rate. As the years go on, the vacant unused land will be taxed more and more.

 

This might have some effect on unused vacant land.

Just stick a couple of banana trees on the land . It’s a working farm that makes no money don’t you know ? ????

[blackcab]

1 hour ago, chrisandsu said:

Just stick a couple of banana trees on the land . It’s a working farm that makes no money don’t you know ? ????

 

I refer you to post 6.

[xylophone]

On 3/14/2019 at 3:39 PM, johng said:

 

On 3/14/2019 at 3:31 PM, NCC1701A said:

Thailand is Bizarreo world and the Twilight Zone combined.

Hmmm........quite a few like that where I live as well as completely empty blocks which have been finished.

 

And to top the lot, and like NCC1701A has said, it's a completely different world here in Thailand as far as property is concerned, and as for buying off the plan, well there are a couple of "developments" which have been sold off the plan now for two years, and which haven't been built, or even started, although from time to time someone drives a digger onto the land and turns over some soil, and that's it – – probably to keep the investors happy.

 

According to a friend in the business, these will never be built??

[lkn]

On 3/14/2019 at 3:27 PM, Brunolem said:

There are loads of half empty buildings where, years after completion […]

 

Not so long ago, a price of 100,000 baht per sqm was a rarity, that would allow the lucky buyer to get an appartment with its own private pool, in the best corner of Bangkok

Are any of these buildings, in the best corner of Bangkok with private pool for 100,000 baht per sq. m., still half empty?

 

Logic would dictate that if many buildings built over the last decade are still half empty, and developer hasn’t actually increased the price since completion, there should still be lots of great condos available.

[johng]

I think/read that for many of the derelict buildings the banks keep them on the books so as not to show a loss..not sure how it works

[AtoZ]

I saw this 240+ MM THB homes on Facebook - they advertise heavily

 

Seriously why would someone with such money buy in dirty Bangkok instead of any world class city where you can also expect to get ROI by renting.

[SheungWan]

7 minutes ago, AtoZ said:

I saw this 240+ MM THB homes on Facebook - they advertise heavily

 

Seriously why would someone with such money buy in dirty Bangkok instead of any world class city where you can also expect to get ROI by renting.

In Hong Kong now, if you wish to buy residential property you can add on the property price 15% tax plus another 15% for not having a HK ID. So that's 30% extra. Singapore similar. The attraction of BKK will be the lower tax plus lower entry price point. Does that knock out the pitfalls of buying in Thailand? No. But it does explain why the market still continues. 

[lkn]

19 hours ago, johng said:

I think/read that for many of the derelict buildings the banks keep them on the books so as not to show a loss..not sure how it works

The bank will lend out 1 mio. to a condo buyer, the condo buyer will default on their loan, the bank confiscates the condo which, at the time of the loan, was valued at 1 mio.

 

Maybe at the time of the default, the condo is only worth 500,000 baht, so the bank can either sell it immediately at this reduced price, and take a loss, or they can keep the condo until the market recovers.

 

Unless the bank is in need of liquidity, it would make the most sense to wait until the market recovers, as markets normally recover within a few years, and there is no property tax in Thailand, so it costs basically nothing to wait.

 

The problem is when you have buildings where majority of owners have defaulted, and no-one is left to take care of the building, so while the bank waits for the market to recover, the building is deteriorating.

 

Today the condo may be worth more than 1 mio., because the market has recovered, but because the building has not been maintained, it is practically unsellable, as no-one wants to live there.

 

The best way out of such situation is to sell all units to an investor who can fix up the building and then resell the renovated units, but unless it’s a single bank holding all (or a majority of) the units, it can be a logistic challenge to track down owners and negotiate a price.

 

[BritManToo]

50 minutes ago, lkn said:

Maybe at the time of the default, the condo is only worth 500,000 baht, so the bank can either sell it immediately at this reduced price, and take a loss, or they can keep the condo until the market recovers.

 

I don't believe foreclosures are allowed to be sold for less than the outstanding amount.

A rule introduced to stop banks overvaluing property and lending too much.

[AtoZ]

On 3/20/2019 at 2:01 PM, SheungWan said:

In Hong Kong now, if you wish to buy residential property you can add on the property price 15% tax plus another 15% for not having a HK ID. So that's 30% extra. Singapore similar. The attraction of BKK will be the lower tax plus lower entry price point. Does that knock out the pitfalls of buying in Thailand? No. But it does explain why the market still continues. 

Bangkok is not Singapore or HK. These two cities are together with NY and London the financial centres of the world. Which means thousands of people on very high salaries.

 

Bangkok is what? Corruption centre with handful of billionaire families owning everything.

 

The 240M house would have to rent for 800,000 THB a month to get laughable 4% return before expenses and tax.

[madmen]

9 minutes ago, AtoZ said:

Bangkok is not Singapore or HK. These two cities are together with NY and London the financial centres of the world. Which means thousands of people on very high salaries.

 

Bangkok is what? Corruption centre with handful of billionaire families owning everything.

 

The 240M house would have to rent for 800,000 THB a month to get laughable 4% return before expenses and tax.

Prices are also a fraction of those other 2. The buying frenzy is happening for a reason..Unfortunately for renters that do like Bangkok  its now out of reach for most in desirable areas eg around Asoke. Im ecstatic I bought there before The Chinese discovered it.

[chrisandsu]

12 minutes ago, madmen said:

Prices are also a fraction of those other 2. The buying frenzy is happening for a reason..Unfortunately for renters that do like Bangkok  its now out of reach for most in desirable areas eg around Asoke. Im ecstatic I bought there before The Chinese discovered it.

That’s the same in any country . Where I live is pretty much unaffordable for most younger people now . I bought my house 12 years ago for what I thought at the time was expensive .... well I could never afford it now . Appreciation on a property is pretty much worthless unless you want to move to a cheaper area . It’s all about luck . There is very little skill in deciding to take the plunge in buying any property . Location will cost you more and if you are very lucky will appreciate more . It’s that simple .

[SheungWan]

26 minutes ago, AtoZ said:

Bangkok is not Singapore or HK. These two cities are together with NY and London the financial centres of the world. Which means thousands of people on very high salaries.

Bangkok is what? Corruption centre with handful of billionaire families owning everything.

The 240M house would have to rent for 800,000 THB a month to get laughable 4% return before expenses and tax.

Bangkok has its own (much smaller) financial centre, but this story is about Chinese investing overseas and considering options. If one considers that the entry price in HK is about 20m baht now, then the possibility of acquiring a property in the centre of BKK at less than half that (plus even cheaper in Pattaya) makes sense to them.

[AtoZ]

20 minutes ago, madmen said:

Prices are also a fraction of those other 2. The buying frenzy is happening for a reason..Unfortunately for renters that do like Bangkok  its now out of reach for most in desirable areas eg around Asoke. Im ecstatic I bought there before The Chinese discovered it.

Not really, there are heaps of condos in Asok with low rents. In many buildings the asking rent prices are lower than 5 years ago.

 

It's only the new condos with sky high asking prices.

 

If you put the money in dividends ETFs you would be way better off.

[SheungWan]

26 minutes ago, AtoZ said:

Bangkok is not Singapore or HK. These two cities are together with NY and London the financial centres of the world. Which means thousands of people on very high salaries.

Bangkok is what? Corruption centre with handful of billionaire families owning everything.

The 240M house would have to rent for 800,000 THB a month to get laughable 4% return before expenses and tax.

Bangkok has its own (much smaller) financial centre, but this story is about Chinese investing overseas and considering options. If one considers that the entry price in HK is about 20m baht now, then the possibility of acquiring a property in the centre of BKK at less than half that (plus even cheaper in Pattaya) makes sense to them.

[AtoZ]

1 minute ago, SheungWan said:

Bangkok has its own (much smaller) financial centre, but this story is about Chinese investing overseas and considering options. If one considers that the entry price in HK is about 20m baht now, then the possibility of acquiring a property in the centre of BKK at less than half that (plus even cheaper in Pattaya) makes sense to them.

Maybe try to read what this thread is about - nobody is talking about 10M properties in centre of BKK

 

The thread is about 65 - 240 million THB properties in middle of nowhere.

[SheungWan]

6 minutes ago, chrisandsu said:

That’s the same in any country . Where I live is pretty much unaffordable for most younger people now . I bought my house 12 years ago for what I thought at the time was expensive .... well I could never afford it now . Appreciation on a property is pretty much worthless unless you want to move to a cheaper area . It’s all about luck . There is very little skill in deciding to take the plunge in buying any property . Location will cost you more and if you are very lucky will appreciate more . It’s that simple .

I will disagree that there is little skill, though I would rather use the word judgment in relation to property. Sometimes the prices in a central area just seem under-priced when FX considerations are also thrown in, so one goes for it even with friends and acquaintances doubting your decision: "what do you want to do that for?" and so on. 

[SheungWan]

6 minutes ago, AtoZ said:

Maybe try to read what this thread is about - nobody is talking about 10M properties in centre of BKK

The thread is about 65 - 240 million THB properties in middle of nowhere.

The thread might have started with an extreme example, but the discussion has shifted towards overseas Chinese investing in Thailand property, particularly BKK. There is a similar influx kicking off in Pattaya. Its an interesting counterpoint to the usual background noise of 'don't buy anything' and 'leave Thailand!' Unless one wants to say that the Chinese are all mad.

[AtoZ]

6 minutes ago, SheungWan said:

The thread might have started with an extreme example, but the discussion has shifted towards overseas Chinese investing in Thailand property, particularly BKK. There is a similar influx kicking off in Pattaya. Its an interesting counterpoint to the usual background noise of 'don't buy anything' and 'leave Thailand!' Unless one wants to say that the Chinese are all mad.

Sure, the Chinese money is huge. They often don't care about return, they want to get the money out of China where it can be taken away from them in a moment. Not to mention huge part is money laundering and criminals - like they uncovered in Canada that several billions $ was from drug operations.

 

Will it last though?

 

Look at Australia currently, those who bough property in the past 2-3 years committed financial suicide.

[LennyW]

On 3/14/2019 at 9:32 PM, madmen said:

Prices range from 1 million to 4.5 million USA dollars !!! and its a red light area where your first greeting after the lift down to Sukhumvit could be a grab by the nuts from a lady boy.

That may actually be a big draw for some .......