Thai property prices softening?

[Mike Teavee]

16 hours ago, onebir said:

Thanks for the warning, ultimately leg work will be involved, but in advance knowing of good property listings sites is useful. So far other than fazwaz so far I know of:

ddproperty.com

perfecthomes.co.th (Chiang Mai only?)

+ from this thread (thanks guys!)

kaidee (Thai language; some functionality works through google translate)

bahtsold

 

Asking prices in a few places already look quite reasonable by recent standards/ other places eg:

https://perfecthomes.co.th/city-view-tower-condominium/

(More so if the discounts to asking price cited in this thread are possible...)

 

If you're looking in the Pattaya area then https://www.rightmovepattaya.com/ will sometimes have fire sale properties & from what I can tell the asking prices on there seem lower than other sites. 

 

[onebir]

7 hours ago, Mike Teavee said:

If you're looking in the Pattaya area then https://www.rightmovepattaya.com/ will sometimes have fire sale properties & from what I can tell the asking prices on there seem lower than other sites. 

 

Not personally, but that's also a useful reference point & other people will find it directly useful, so thanks!

[Leaver]

6 hours ago, onebir said:

Not personally, but that's also a useful reference point & other people will find it directly useful, so thanks!

That are no reference points anymore.  This is "Year 0" for Pattaya property.  

[Isaan sailor]

On 8/18/2020 at 5:04 PM, DrTuner said:

Still early in the game. Give it 1y or so for the non-performing loans to skyrocket anf the market to saturate with fire sales.

Yep, keep your powder dry, gentlemen.  Prices have much further to fall.  Remember, sellers can hold out longer here, because they have very low tax obligations.  

[Leaver]

8 hours ago, Isaan sailor said:

Yep, keep your powder dry, gentlemen.  Prices have much further to fall.

More like, collapse.

 

8 hours ago, Isaan sailor said:

Remember, sellers can hold out longer here, because they have very low tax obligations.

Low tax obligations don't pay mortgages.  

[onebir]

2 hours ago, Leaver said:

Low tax obligations don't pay mortgages.  

Unless there's lots of property bought for cash (like China)?

[Leaver]

14 hours ago, onebir said:

Unless there's lots of property bought for cash (like China)?

Do you think it's a good investment tying up cash in a property here?  Difficult to find a tenant, and cheap rents, with the property depreciating, and the market trending downwards.  

 

Even if it was "black money" you can't put it into property unless its been cleaned first.  

[onebir]

1 hour ago, Leaver said:

Do you think it's a good investment tying up cash in a property here?  Difficult to find a tenant, and cheap rents, with the property depreciating, and the market trending downwards.  

For me, no! For some rich Thais, idk...

I was just pointing out that speculative investment* in property got pretty popular in China over the recent ~2 decades, and wondering

a) whether it's also common in Thailand

b) how that might affect the prognosis for property prices.

 

*ie bought for cash & held empty purely in the expectation of property price increases

[spidermike007]

Prices of condos will continue to drop. Vast oversupply. Developers refusing to do market research. If it were me, I would wait a bit. 

 

Land may be another story. Different market. Harder to predict. 

[DrTuner]

13 minutes ago, spidermike007 said:

Land may be another story. Different market. Harder to predict. 

Farmland will be flogged off when farmers run out of money. Chanote land will likely retain value better, especially if not in the middle of nowhere. Gold & land are half decent safe havens. And of course farangs can't own land directly.

[Leaver]

1 hour ago, onebir said:

For me, no! For some rich Thais, idk...

I was just pointing out that speculative investment* in property got pretty popular in China over the recent ~2 decades, and wondering

a) whether it's also common in Thailand

b) how that might affect the prognosis for property prices.

 

*ie bought for cash & held empty purely in the expectation of property price increases

Doesn't matter how rich you are, a bad investment is a bad investment.

 

Difficult for property price to increase when they have no town planning laws here, and they keep building and building.  That leads to an oversupply, and downward pressure on property prices.  

[Leaver]

52 minutes ago, DrTuner said:

Farmland will be flogged off when farmers run out of money. Chanote land will likely retain value better, especially if not in the middle of nowhere. Gold & land are half decent safe havens. And of course farangs can't own land directly.

I agree.

 

What are the first things many Thai's do with some extra money or income, buy gold and / or land.  A lot more of which will be on the market in the near future, as times get tougher here.

[onebir]

2 hours ago, Leaver said:

Doesn't matter how rich you are, a bad investment is a bad investment.

Less forced liquidation for investments held by richer/more liquid investors. But based on recent posts, it sounds like in Thailand they're more likely to hold land?

[Leaver]

2 hours ago, onebir said:

Less forced liquidation for investments held by richer/more liquid investors.

Non performing assets on your books are still a bad investment.  This is not a Covid thing.  Thai's buy gold and land / property in the good times, thinking both will always increase in value.  Even rich Thai's do it.  

 

A rich Thai will tell you they bought a property for 5 million baht and sold it 10 years later for 5, 000, 001 baht.  They will claim success for a 1 baht profit. 

 

When you tell them that their 5 million was tied up in a useless investment, and if the money was invested elsewhere they would have made more than 1 baht, they lose face and revert back to you being a "stupid farang."  ????  

 

Many rich Thai's invest in "face" which has no economic value.

 

 

Edited August 23, 2020 by Leaver

[onebir]

15 minutes ago, Leaver said:

Thai's buy gold and land / property in the good times... Even rich Thai's do it.

 

A rich Thai will tell you they bought a property for 5 million baht and sold it 10 years later for 5, 000, 001 baht.  They will claim success for a 1 baht profit. 

So they'll be reluctant to take losses on property bought for cash; that won't be coming to market quickly (or at all?). If there's a lot of property owned without debt, by owners with this mentality, it will slow down the decline in prices.

 

This is what I was trying to understand; thanks for the info!

 

I'm thinking it'll take at least two more years to reach bottom. Hard to see how GDP can recover from a ~12% drop in less than 5 or 6 quarters; even then, many potential buyers will have tapped savings for deposits, and need a while to rebuild them.

[Leaver]

2 minutes ago, onebir said:

So they'll be reluctant to take losses on property bought for cash; that won't be coming to market quickly (or at all?). If there's a lot of property owned without debt, by owners with this mentality, it will slow down the decline in prices.

 

This is what I was trying to understand; thanks for the info!

 

I'm thinking it'll take at least two more years to reach bottom. Hard to see how GDP can recover from a ~12% drop in less than 5 or 6 quarters; even then, many potential buyers will have tapped savings for deposits, and need a while to rebuild them.

Your post is correct, but you need to allow for another thing, corruption, which makes for an unequal society, and Thailand is one of the worst countries in the world for this.  

 

It changes market dynamics, particularly with property.

[onebir]

14 minutes ago, Leaver said:

It changes market dynamics, particularly with property.

Ok... what effect do you think corruption will have?

[Leaver]

7 minutes ago, onebir said:

Ok... what effect do you think corruption will have?

Not will have, has had, and will continue to have.

 

Many wealthy Thai's buy property, even if it's a bad investment decision.  

 

Like I said, they will tie up 5 million baht for 10 years to sell the property at 5,000,001 baht and claim a 1 baht profit. 

 

They will not entertain the thought that they lost money because they didn't make that 5 million baht work harder for 10 years in another investment, which would have made them more money.  

[onebir]

1 minute ago, Leaver said:

Not will have, has had, and will continue to have.

 

Many wealthy Thai's buy property, even if it's a bad investment decision.  

 

Like I said, they will tie up 5 million baht for 10 years to sell the property at 5,000,001 baht and claim a 1 baht profit. 

 

They will not entertain the thought that they lost money because they didn't make that 5 million baht work harder for 10 years in another investment, which would have made them more money.  

What's the connection with corruption here?

[Leaver]

12 minutes ago, onebir said:

What's the connection with corruption here?

Wealthy Thai's, like wealthy Chinese, buying up a lot of property, thinking it's a good investment, but the property sits idle doing nothing, but wealthy Thai's don't care, because they are wealthy.  

 

Just look at the Thai police officers on small salaries, but they own 5 or more houses, a bar etc etc.  Where did they get the money from?  It doesn't mean they are prudent investors, just corrupt. 

 

 

Edited August 23, 2020 by Leaver

[onebir]

1 minute ago, Leaver said:

Just look at the Thai police officers on small salaries, but they own 5 or more houses, a bar etc etc.  Where did they get the money from?  It doesn't mean they are prudent investors, just corrupt.

Ok so corruption => more wealth inequality => more cash-funded property => less property comes to market due to financial stress => property prices adjust very slowly.

 

That makes sense?

[Antonymous]

1 hour ago, Leaver said:

Non performing assets on your books are still a bad investment.  This is not a Covid thing.  Thai's buy gold and land / property in the good times, thinking both will always increase in value.  Even rich Thai's do it.  

 

A rich Thai will tell you they bought a property for 5 million baht and sold it 10 years later for 5, 000, 001 baht.  They will claim success for a 1 baht profit. 

 

When you tell them that their 5 million was tied up in a useless investment, and if the money was invested elsewhere they would have made more than 1 baht, they lose face and revert back to you being a "stupid farang."  ????  

 

Many rich Thai's invest in "face" which has no economic value.

 

 

What on earth (scuse pun) are you talking about? "Non-performing assets"?

 

There are broadly speaking two markets for farmland, each performing quite differently.

 

First there's good quality chanote land that is purchased and held for investment purposes. The best performance (annual appreciation in value) comes from plots that are in areas close to attractive towns or otherwise in areas of great natural beauty that have at least the following features:

 

- Good road access (main road and access directly onto the land)

- access to electricity supply

- great views like mountains or natural features...

- in particular that includes rivers passing through or alongside

- 365 day canals and/or readily available ground water not too deep underground

- no flooding

- no encumbrances

- good quality soil for growing a wide variety of crops or trees

 

The above is what the OP should be looking out for. Land plots with these features are precisely what have provided 15-20% per annum ON AVERAGE appreciation for us over the past 15 years. That is what investors look for first and foremost. In addition there can be an annual income derived from renting the land to farmers or sharing profits with tenants in return for taking care of the land while holding it, but that is definitely of secondary interest.

 

Good land for investment in the north of Thailand is very often held by wealthy private investors from Bangkok, or other cities and not by local farmers. These are on the whole people who can afford to keep the land for the long term and are not phased by temporary slowing in the market. that simply doesn't bother them or affect asking prices. Eventually they will sell the land to people wanting to build private properties and resorts. Not to farmers.

 

Secondly there's farmland that has few or none of the features above. There's tons of this land out there. We read about stories every week of a Thai wife or GF whose relatives have this 'great piece of land', often in Isaan it seems, that she's been offered and if farang hubby can provide the cash, he can use it - for their new home or for farming. Usually these pieces are barren, in the middle of nowhere, with no proper access and nobody has grown anything but weeds on it for years. Not to mention that is does not have a chanote and is actually owned by several relatives in a share. LOL.

 

This kind of land should not be considered for investment purposes. I hope I'm being understood here. You want to become a farmer? OK, consider it if you must, but then you should be looking at ROI - the amount of net profit you might achieve from growing and selling farm produce. That's a whole different world and not a way to get rich.

 

Back to investment land - prime productive farmland. The prices that land changes hands for does not go up in a uniform linear manner. There are some low years and then a real boomer. That's why I've advised in my earlier post that you must look to it as a long term investment. Could be that the market may be slow for the coming 18 months. But not necessarily. So long as there are savvy Thais with cash to stash and big profits in mind, there will be buyers. There are alot more of those types out there than most posters in this thread seem to be aware of.

[meand]

On 8/18/2020 at 5:42 PM, pixelaoffy said:

Bangkok has the craziest overpriced properties in Asia! The city is full of empty units and more being build to leave empty 

Do units being empty have some sort of negative effect? Many neighborhoods worldwide where occupation rates are low, they are vacation homes. 

 

Buying or not is an indicator. I do not believe living in it or not is an indicator of anything. 

 

[Leaver]

6 minutes ago, Antonymous said:

There are broadly speaking two markets for farmland, each performing quite differently.

Farmland.  ???? 

 

Yes, invest in another pig farm or rubber plantation.  What you lose on the agricultural product, you should make back 30 years from now in a small capital gain.  ????

 

 

 

Edited August 23, 2020 by Leaver

[onebir]

1 minute ago, meand said:

Do units being empty have some sort of negative effect?

I think people will sell empty units before occupied ones (either because they need somewhere to live, or they're getting rent.)

[onebir]

8 minutes ago, Antonymous said:

 

The above is what the OP should be looking out for.

Can farang even buy farmland? TBH I'm just contemplating getting a condo at a non-inflated price at some vague future date...

[Leaver]

3 minutes ago, meand said:

I do not believe living in it or not is an indicator of anything. 

No, but building more and more properties, all around an existing property, leads to oversupply, which leads to a property that can not be liquidated easily, unless at a fire sale price.

 

It's not just about the vale of land / property here, it's about lack of town planning laws and over development that effects the value of properties in the market.  

[Antonymous]

5 minutes ago, Leaver said:

Farmland.  ???? 

 

Yes, invest in another pig farm or rubber plantation.  What you lose on the agricultural product, you should make back 30 years from now in a small capital gain.  ????

 

 

 

Leaver, you obviously have a comprehension problem. You either didn't read my post or certainly didn't understand the difference that I outlined between land for investment and land for farming.

 

In your post and several others that you've responded to you don't appear to have a grasp of investment fundamentals at all, still less the way that high net worth individuals look at markets and make money.

 

You apparently live in a Pattaya apartment with a motorbike and music system (or some such) as your prime possessions. Are you qualified to advise the OP on how to invest his money in Thailand? What successes have you made? Oh wait, you apparently never have invested in Thailand.

[Leaver]

4 minutes ago, Antonymous said:

Leaver, you obviously have a comprehension problem. You either didn't read my post or certainly didn't understand the difference that I outlined between land for investment and land for farming.

 

In your post and several others that you've responded to you don't appear to have a grasp of investment fundamentals at all, still less the way that high net worth individuals look at markets and make money.

 

You apparently live in a Pattaya apartment with a motorbike and music system (or some such) as your prime possessions. Are you qualified to advise the OP on how to invest his money in Thailand? What successes have you made? Oh wait, you apparently never have invested in Thailand.

Allow me to correct you.  A motorbike and home entertainment system are my prime possessions HERE, not my only prime possessions, and that's by choice. 

 

I own properties in three different countries, actually, on three different continents as well, but Thailand isn't one of them, and never will be.

 

The best investment advice I can give to the OP is don't invest ANYTHING in Thailand, and certainly don't listen to a real estate agent like you.  

 

Make your money elsewhere, and spend the proceeds here and have a good time, care free.  

 

Thailand represents big risk for small reward.  Why bother?

[onebir]

30 minutes ago, Leaver said:

Thailand represents big risk for small reward.  Why bother?

So I can spend 6-8m/year in Thailand, without paying rent (leaving a few possessions to save carting back & forth or rebuying). That's all  ????