Phuket new build home owned by Thai - will its value increase?

[nkg]

 

I know very little about the Thai property market - rental only for me.

 

But I have a Thai friend who has recently purchased a new-build house in Phuket, 4 bedrooms and 3 bathrooms. At a best guess, is the value of their house likely to go up, down or stay much the same?

[scorecard]

Might help if you give more details about location etc. ('Phuket', covers a lot of territory), is ita typical Thai gated or ungated village, etc., then farang in that area could perhaps give some specific comments. 

 

As a general rule in Thailand houses don't appreciate, but land values do sometimes, therefore  overall price goes up.

 

But more to the point, Thais generally don't buy second hand houses.

 

Why? Because when Thais make a big purchase (any purchase) they want status value / rise in personal/ family status from their purchase, and 2nd hand houses have very little value in terms of building status. Further many Thais would tend to think along the line of 'wow, he bought a second hand house, he can't afford the real thing', again a negative in terms of status.

 

Aligned to this Thais don't buy houses because it's got nice character, It's from a great era 'art deco' or something like that, that's just not the way Thai folks thing about houses. Also plenty of Thai folks would be worried about ghosts etc.

 

Ask a few farang who have Thai wives and have pushed to look at 2nd hand houses perhaps because it's big, got many bedrooms, location or whatever. Most will tell you the Thai wife was horrified and made sure the 2nd hand idea was killed quickly.

 

 

[ilms]

In general, I think Scorecard is right on. Most, if not all of the appreciation would be on the land.

Whenever the subject comes up, my (Thai) wife always leans toward "buy land and oversee the building of the house yourself." I think she is worried about contractors using substandard building materials/practices--something which you have no control over if you buy a house that's already built. From what I've seen, I tend to agree with her. 

[moskito]

first of all, forget you have any friends here. It will safe you a lot of trouble, money and headeache ????
I am living in Phuket since more than 20 years now ...living, not making holidays here for 3 month and travelling every year to Europe ???? ... and i am having just a handfull of people i would really trust here.

Area is very important, if you are talking about Phuket town, its not easy to find anything there, the houses are mostly owned by Chinese and they will not sale to foreign neighbors anyways. The new Condos in Phuket town, like Supalai or the Light having still some Apartments available. Normal new build houses range from 9,9 million Baht (fishboxes on 300m² land with walls around like a jail) up to 50million for 1Rai properties with nice gardens

[moskito]

btw, be aware that you are NEVER the owner, you always need a Thai or a Company... (i belive this company thing is monkey business) so if you not have a wife you trust with your life ( ????????????) may be better rent something. I am happily married since 20 years but thats more the exception, not the normal thing...
Normal thing is you come back from a holiday and another Thaiguy opends your former door because your key doesnt fit anymore ????????????

[nkg]

Ha ha, no it is definitely her house, not mine ???? I'll never "buy" property in Thailand.

 

It's a new build property on the outskirts of Thalang, not near the sea. I think it's inside a gated village - I haven't had the chance to visit yet.

 

Good information about how Thais feel about new vs "second-hand" houses. I'd forgotten that ghosts were an important consideration ????

 

[RichardColeman]

I will never buy a property in Thailand - unless the wife suddenly wins the lottery - and have rented out many houses since I have been living here. NOT ONE - was a house i would consider a build that would A. last and B. Go up in value quickly before it fell down.

[moskito]

7 hours ago, RichardColeman said:

I will never buy a property in Thailand - unless the wife suddenly wins the lottery - and have rented out many houses since I have been living here. NOT ONE - was a house i would consider a build that would A. last and B. Go up in value quickly before it fell down.

Depends on the builders (Architect)
I build about 8 houses so far in the past 20 years and NONE having cracks but i know what you are talking about.
I always wonder how the new houses they are currently building everywhere, will look in about 20-30 years.
:
Regarding 2nd hand houses, no problemo, as long as nobody died in the house or  was really sick for a long time and nobody could find out why.  The thing is most Thaipeople can not really affort to buy a house and these ones can affort it building a new one or buying a new one
 

[jackdd]

In general you can say that the value of the land will go up, the value of the building will go down

So a 1 million THB building on a 2 million plot might rise in value, while a 2 million THB building on a 1 million plot might fall

[Nip]

I would strongly advise to rent not buy. My friends and I bought nice bungalows in a small estate close to Chalong harbour ten years ago and today we can't get the price we paid back then. We paid 2.9 million baht then and can't sell them for 2 million now. Apart from the dangers with corruption on Phuket cheaper houses in cheaper estates are generally not maintained and soon the estates and houses look jaded and difficult to sell. Renting the properties however can give a return of at of 10 to 12%.

 

From what I hear the bad publicity on property investment on Phuket over the last few years will I'm reliably informed raise its head again very soon and will seriously affect the housing market even more. I have many friends with houses that were valued at 20 million Baht + some years ago that can't be sold today for 10 million. 

[tompelli]

I can vaguely recall that there is also the difference in loan percentages between new & second hand houses. Along the lines that Thais can get a bigger percentage loan for a new build against struggling to get the same terms on a used property?

[Jimbo2014]

Global asset prices are very high at present owing to low interest rates and Quantitative easing.  Asia's prices are even higher owing to the chinese manufacturing explosion and favorable demographics the past 30 years (bar Japan).  The big question is will they continue.  Demographics are about to turn for most Asian countries (Thailand, Japan).  This will place downward pressure on all asset prices.  Low interest rates may continue - its hard to say.  With a trade war and pressure to devalue currencies QE may continue.  The world is addicted to debt but sooner or later all bubbles burst.  Been more than 10 years since a global recession so perhaps soon.

[rwill]

I have seen several houses resold in the mooban I live in, located in Ratchaburi.  So used houses can be sold.  However there are at least 10 homes that have been foreclosed on and these have never been resold.  The main reason being that the banks want as much for them as what a new house would cost in the mooban, so why buy an old and now termite infested crumbling house when you can get a brand new one for the same price.

[The Fat Controller]

The value will only go up in the mind of the owner !

 

Friends currently trying to sell in Ubon at 20% less than cost new, no interest from locals, just a few tentative enquiries from expats.

[robertson468]

On 6/26/2019 at 2:55 AM, nkg said:

Ha ha, no it is definitely her house, not mine ???? I'll never "buy" property in Thailand.

 

It's a new build property on the outskirts of Thalang, not near the sea. I think it's inside a gated village - I haven't had the chance to visit yet.

 

Good information about how Thais feel about new vs "second-hand" houses. I'd forgotten that ghosts were an important consideration ????

 

Whilst I respect the previous Ops views, as a counter opinion we have sold two houses we owned........to Thais.  I think the more worrying issue is there are a surplus of unsold houses in Thailand, granted mainly in BKK, but it will be only a matter of time before the situation spills out to the more popular destinations.  Plus, no seems to know how the new Government will fare and I think quite a few people are holding off until they see a more positive direction.

[poka513]

We (5 adults and 2 small dogs) live in a 4 bedroom 3 bath townhouse near Chiang Mai Airport, paid 3.1 mil Baht. Bought our end unit new 3.5 years ago, then added the 4th bedroom downstairs. The complex is 4-5 years old, called The Clover. There are a few second hand 2 bedroom 2 bath units which have been for sale for about a year and another 2 doors down which has been for rent with no takers since last November, 13k per month. There are at least four other 3 bedroom 3 bath new units in the complex which have never sold. Generally, demand has decreased since we moved in. However, a new 3 bedroom 3 bath unit across the Soi from us just was bought by Chinese (in their company name), I heard for 3.8 mil Baht, but I think it's plot is slightly larger than our unit hence the higher price.

[IssanMichael]

It depends on the location, the quality of the build and what he paid. How long is a piece of string!!

[LivinLOS]

On 6/25/2019 at 5:18 PM, ilms said:

In general, I think Scorecard is right on. Most, if not all of the appreciation would be on the land.

Whenever the subject comes up, my (Thai) wife always leans toward "buy land and oversee the building of the house yourself." I think she is worried about contractors using substandard building materials/practices--something which you have no control over if you buy a house that's already built. From what I've seen, I tend to agree with her. 

Another aspect is the development of new quality materials, imported items, better building.. Even over a short period. 

 

Back end of the 90s even huge money Phuket cliff edge villas often just shit materials, windows that swell and no longer fit, terrible fixtures and fittings.. You couldnt just walk into homepro and buy hafele or other brands back then.

 

If all you saw was improved buildings, with improved materials, and higher finish quality.. Makes perfect sense to want to have a national mindset of buy or build new. 

[Stevemercer]

I agree with the above comments. If a Thai family or company can stump up enough money to buy a second-hand house, they will almost certainly go the extra mile for a brand new house.

 

We bought 5 Rai of land for 1 million Baht 5 years ago and built a house for 2.1 million Baht, plus nearly 1 million Baht on improvements to the land. We would need to sell for 4 million to cover costs (with any profit coming from appreciation of the Thai Baht some 35% over the last 5 years).

 

If we tried to sell now, we might get 3 million for the land, plus another million for the improvements and house. Basically we have to hope that the land appreciates and we throw in the house for free.

[KhaoYai]

Whilst there is still resistance to buying secondhand houses within Thai society, I believe that attitudes are slowly changing.  My house is not for sale but someone started a rumour that it is - I've had 2 lots of Thai people contact me and tell me they've heard its for sale and they were interested. I've also seen a few secondhand houses sell in the area recently.

 

There are various reasons for the Thai reluctance to buying a secondhand house - most have already been metioned but one of the big reasons has been missed.  In Thailand, houses are normally built from concrete or concrete blocks - such materials are considered to have a finite lifespan.  It used to be around 30 years - poorly built properties may not even last that long - whereas well built and well maintained properties may last much longer. Whatever, unlike western properties that are normally built fom brick or stone and often last centuries, Thai homes have a relatively short lifespan - therefore, the value of the actual house will start to fall. The value of the land however, has been rising rapidly in some areas which 'masks' the fall in value of any structure built upon it.

 

I would be very careful buying any property in Thailand at the moment if you want it to be an investment - there has been massive overbuilding and in some areas prices are grossly inflated.  If the sole intention is to find a home you're happy with and the price suits you - there should be no problem but be wary.

 

Its the old equation of supply and demand - as a property owner I wouldn't want to see a crash but the current situation is unsustainable.

[Andrew Dwyer]

Can’t comment on Phuket but near me ( Ayutthaya ) it seems like houses, mostly bungalows and townhouses, are being built on every available piece of land !!
My gf regularly comments “ who buy all these houses ? “ and the other day said “ soon Thailand have to import rice, not have land !! “.

Therefore the price of a second hand house is gonna go down due to the glut of new houses available .

[Jaxxper]

We bought a house on the Darkside near Pattaya 10 years ago.  Gated village with security etc etc. We chose the location because I was then working in Thailand. Over the 10 years the village took a downturn in appearance , but over the last couple of years it has made a resurgence. Not sure we'd get back what we paid , but with the 30% plus drop in exchange rate were we to sell it , certainly in Sterling terms we'd be ok. All hypothetical though as we're happy in the house.

[LivinLOS]

3 hours ago, KhaoYai said:

Whilst there is still resistance to buying secondhand houses within Thai society, I believe that attitudes are slowly changing.  My house is not for sale but someone started a rumour that it is - I've had 2 lots of Thai people contact me and tell me they've heard its for sale and they were interested. I've also seen a few secondhand houses sell in the area recently.

 

There are various reasons for the Thai reluctance to buying a secondhand house - most have already been metioned but one of the big reasons has been missed.  In Thailand, houses are normally built from concrete or concrete blocks - such materials are considered to have a finite lifespan.  It used to be around 30 years - poorly built properties may not even last that long - whereas well built and well maintained properties may last much longer. Whatever, unlike western properties that are normally built fom brick or stone and often last centuries, Thai homes have a relatively short lifespan - therefore, the value of the actual house will start to fall. The value of the land however, has been rising rapidly in some areas which 'masks' the fall in value of any structure built upon it.

 

I would be very careful buying any property in Thailand at the moment if you want it to be an investment - there has been massive overbuilding and in some areas prices are grossly inflated.  If the sole intention is to find a home you're happy with and the price suits you - there should be no problem but be wary.

 

Its the old equation of supply and demand - as a property owner I wouldn't want to see a crash but the current situation is unsustainable.

Yeah thats a similar point to my own on improved materials.. 

I always thought this was a likely reason why 30 years was a lease.. Because thats how long a Thai house lasted back then.. 

 

 

[NightSky]

On 6/26/2019 at 10:21 AM, moskito said:

Depends on the builders (Architect)
I build about 8 houses so far in the past 20 years and NONE having cracks but i know what you are talking about.
I always wonder how the new houses they are currently building everywhere, will look in about 20-30 years.
:
Regarding 2nd hand houses, no problemo, as long as nobody died in the house or  was really sick for a long time and nobody could find out why.  The thing is most Thaipeople can not really affort to buy a house and these ones can affort it building a new one or buying a new one
 

My wife purchased a house in BKK built in 2014 and Ive noticed that Thai homes require annual maintenance to ensure they remain in a good condition.

 

The harsh weather and environment doesn't help as the temperature swings from tropical heat to cooler with torrential rain. All new build houses usually have some initial problems whichever country they are built in and add the fact Bangkok is sinking allow 3-4 years from build to see the land fall around the foundations and to have it filled in. It requires maintenance to keep the house in good show although a concern is the neighbors in the village might not have the same inclination to maintain their own properties hence lowering the overall aesthetics of the village.

[Small Joke]

Why would anyone buy property in a country where the immigration rules are openly and continually regressing, the majority are sleepwalking off a cliff based on unsustainable feudalism and patronage, that will likely end in civil war, and their constitution may as well be written on a whiteboard? 

[Delight]

 The notion of  mass market  house price appreciation is a western concept.

The root is fractional reserve banking.

This means the banks can lend money-money that they do not have.

The banks entered the UK housing market in 1972 in the UK and aside from  a drop of house prices in 1992 -house prices have increased year on year ever since.

Money entered the housing market faster than properties could be built.

Simple supply and demand economics will ensure house price inflation.

 

That will not happen in Thailand -certainly not for Thais. There will always exceptions to this statement.

Buy a house   ( or a condo) to use and  enjoy.

 

 

 

[jackdd]

On 6/27/2019 at 11:39 AM, poka513 said:

We (5 adults and 2 small dogs) live in a 4 bedroom 3 bath townhouse near Chiang Mai Airport, paid 3.1 mil Baht. Bought our end unit new 3.5 years ago, then added the 4th bedroom downstairs. The complex is 4-5 years old, called The Clover. There are a few second hand 2 bedroom 2 bath units which have been for sale for about a year and another 2 doors down which has been for rent with no takers since last November, 13k per month. There are at least four other 3 bedroom 3 bath new units in the complex which have never sold. Generally, demand has decreased since we moved in. However, a new 3 bedroom 3 bath unit across the Soi from us just was bought by Chinese (in their company name), I heard for 3.8 mil Baht, but I think it's plot is slightly larger than our unit hence the higher price. 

I think a problem for the developers is that there are quite a few people who decide to not live in Chiang Mai because of the smog, and on the other hand there are so many new developments all over Chiang Mai (but in most places in Thailand you find many new developments, Udon Thani is not different). Just move 10 minutes out of the city and new detached 3 bedroom houses can be bought for 3 million.

[observer90210]

Location, quality of building, the network of the developper and the established clientele if it's in a developpment are one of the many factors to sell at a (small) profit.... in some popular locations farangs on leasehold do sell at a small profit or at worst get back their full investment....all depends where and who....