Thai property prices softening?

[Barnabe]

I generally agree with Leaver, the market is due a huge correction BUT:
- it will take a few years for prices to bottom; they just started falling and most sellers will hold on until they can't

- you can get a good deal even in a market top, if you do your research carefully and do aggressive low balling bids

[scubascuba3]

4 hours ago, meand said:

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. 

 

I've seen many empty condos owned by Thais that are totally run down and unliveable, with effort they could sell them but either they don't bother or can't afford to. They often screw up the refurb over engineering them. The thing i noticed with the 10 i looked at was they don't appear to understand the significance of foreign quota, One i looked at and made an offer on, thai owner insisted on deposit which was one of the reasons i pulled out, it's likely to remain unsold for another 10-20 years especially as foreign quota is now full

[Barnabe]

5 hours ago, scubascuba3 said:

I've seen many empty condos owned by Thais that are totally run down and unliveable, with effort they could sell them but either they don't bother or can't afford to. They often screw up the refurb over engineering them. The thing i noticed with the 10 i looked at was they don't appear to understand the significance of foreign quota, One i looked at and made an offer on, thai owner insisted on deposit which was one of the reasons i pulled out, it's likely to remain unsold for another 10-20 years especially as foreign quota is now full

That is my observation too. In another thread a few days ago this was a major point of discussion. 
 

Properties here decay rapidly, maintenance is a joke and sellers prefer to keep units empty for years than rent them below their imagined market price or take a loss when selling them.

 

There must be a lot of people in Thailand with so much money that they can afford to leave properties decaying for years and years. Still there are too many condos around, too much money stuffed into this, some day it has got to give.

[Mike Teavee]

9 hours ago, onebir said:

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  ????

You can do exactly the same with a rented place so not really a reason to buy.

[onebir]

1 hour ago, Mike Teavee said:

You can do exactly the same with a rented place so not really a reason to buy.

Expensive

[Barnabe]

53 minutes ago, onebir said:

Expensive

 

No it's not. Calculate how many rents you need to buy a property and you'll see it's cheaper to rent.

 

If the price of renting a property is 30k per month, and the property costs 10m to buy:

10.000.000 / 30.000 = 333.33 / 12 = 27.7 years of rent to buy a property

 

Don't forget you're on the hook for property maintenance, taxes, etc, not to mention you have capital locked up, and could be forced to sell in a downturn like we are entering now. Especially because you're a foreigner subject to the whims of immigration.

 

If you're looking to buy for living, anything over 25 years you shouldn't touch, around 20 is an OK buy, ideal is between 15 and 20 (or below). Good luck getting anything like this in Bangkok right now.

 

To buy as an investment there are many more factors involved and more risk, but the possibility of a higher reward.

 

Edited August 24, 2020 by Barnabe

[scubascuba3]

1 hour ago, Barnabe said:

.

 

If you're looking to buy for living, anything over 25 years you shouldn't touch, around 20 is an OK buy, ideal is between 15 and 20 (or below). Good luck getting anything like this in Bangkok right now.

 

To buy as an investment there are many more factors involved and more risk, but the possibility of a higher reward.

 

so 20 year is ok 25 don't touch, so what happens when yours goes from 20 to 25 years? doesn't sound a good idea based on that logic

[Barnabe]

These are not strict guidelines, and someone else might be OK to accept higher or lower values.

Honestly anything above 20 is better to rent (for me).

[onebir]

2 hours ago, Barnabe said:

1> 10.000.000 / 30.000 = 333.33 / 12 = 27.7 years of rent to buy a property

2> Don't forget you're on the hook for property maintenance, taxes, etc,

3> not to mention you have capital locked up,

4>and could be forced to sell in a downturn like we are entering now.

5>Especially because you're a foreigner subject to the whims of immigration.

I think we might be analysing different situations?

1> ie the rental yield is 1/27.7 = 3.6% >> most currencies' interest rates  (& these set to stay low). ie if you don't have an apartment and want to spend significant amounts of time each year in Thailand in a specific place, buying is pretty attractive even at current prices. Provided you have the funds to buy in cash, and the ability to ride out a property price crash (...not my plan! see 4)

2> True, but I imagine renting it out 3-4m/year when I'm absent could cover those?

3> True, but this tied up is also somewhat safe from the vagaries of a shaky banking system

4> I started this thread to get advice about how to buy reasonably close to the bottom

5> True, but I'm eligible for a retirement visa. Not much help right now, & perhaps the deposit requirement will be increased, but I think immigration considers retirees less problematic than other classes of farang? (Correct me if I'm wrong...)

[Barnabe]

5 minutes ago, onebir said:

I think we might be analysing different situations?

1> ie the rental yield is 1/27.7 = 3.6% >> most currencies' interest rates  (& these set to stay low). ie if you don't have an apartment and want to spend significant amounts of time each year in Thailand in a specific place, buying is pretty attractive even at current prices. Provided you have the funds to buy in cash, and the ability to ride out a property price crash (...not my plan! see 4)

2> True, but I imagine renting it out 3-4m/year when I'm absent could cover those?

3> True, but this tied up is also somewhat safe from the vagaries of a shaky banking system

4> I started this thread to get advice about how to buy reasonably close to the bottom

5> True, but I'm eligible for a retirement visa. Not much help right now, & perhaps the deposit requirement will be increased, but I think immigration considers retirees less problematic than other classes of farang? (Correct me if I'm wrong...)

 

I just don't see you getting your value for money there. I think you might have a hard time renting it out 3/4 months a year, as the Thai authorities have been cracking down on AirBnb, and the rates used to be pretty low in the last few years anyway.

 

You don't appear to have significant ties to Thailand (for now, that might change), which might be a problem for future visa renewal. Just pulling this out of my ass, but I'd say their priorities in class of visa are:

working foreigners > foreigners with family > retirees > tourists

So if I'm right you would be at the bottom of the ladder. I made this ladder based on my observations here, especially considering what is going on now with classes of foreigners being allowed in.

 

Now if you told me that you are certain you'll spend the next 15+ years living in Thailand, I'd say go ahead anyway, but I get the feeling you're not that certain too?

Another way to limit your downside is to buy a shoebox far away from the city centre for 1 to 1.5 million baht. There are some available near Samrong, Bang Na, etc in new decent condos, very small but at an OK price. But it's not a place where I would live, it's not bad but just too far away from the centre.

 

Bottom line, if I was in your position I'd rent and put any available money in the stock market (drip feeding it monthly) plus a bit in gold.

[Mike Teavee]

44 minutes ago, onebir said:

I think we might be analysing different situations?

1> ie the rental yield is 1/27.7 = 3.6% >> most currencies' interest rates  (& these set to stay low). ie if you don't have an apartment and want to spend significant amounts of time each year in Thailand in a specific place, buying is pretty attractive even at current prices. Provided you have the funds to buy in cash, and the ability to ride out a property price crash (...not my plan! see 4)

2> True, but I imagine renting it out 3-4m/year when I'm absent could cover those?

3> True, but this tied up is also somewhat safe from the vagaries of a shaky banking system

4> I started this thread to get advice about how to buy reasonably close to the bottom

5> True, but I'm eligible for a retirement visa. Not much help right now, & perhaps the deposit requirement will be increased, but I think immigration considers retirees less problematic than other classes of farang? (Correct me if I'm wrong...)

If you want the place to be your home then forget about renting it out for any period of time as you will need an "Owners Room" (Usually another bedroom) that you can securely store all your personal stuff (You can hardly leave your clothes hanging up or personal pictures around the place) which means paying for a 2 bedroom place but only really getting the value of a 1 bedroom PLUS all the money/love you've spent on buying quality furnishings/appliances etc... could be lost with 1 bad tenant.

 

If you really do just want it as somewhere to store your stuff between visits, then you could buy a shoebox condo for < 1 Million OR rent a personal storage place (I know there's several in Bangkok/Pattaya, am sure you'd be able to find one handy for where you want to be). 

 

Plus renting means your not tied down to one particular area/property, visiting for 6-8 months of the year is one thing, living in a place year-in year-out another, do you really go back to exactly the same place every "Holiday"? 

 

 

I'm seriously looking at buying a place so obviously I'm not against buying but do think that it makes more sense to rent than to buy unless it's a place that you want to use solely to live in (For me the biggest advantage of buying is I can have it furnished/kitted out exactly as I want it, no way would I rent it out after doing that). 

 

 

 

[onebir]

43 minutes ago, Barnabe said:

 

1>I think you might have a hard time renting it out 3/4 months a year, as the Thai authorities have been cracking down on AirBnb

 

2>You don't appear to have significant ties to Thailand (for now, that might change), which might be a problem for future visa renewal.

 

3>Just pulling this out of my ass, but I'd say their priorities in class of visa are:

working foreigners > foreigners with family > retirees > tourists

 

4>Another way to limit your downside is to buy a shoebox far away from the city centre for 1 to 1.5 million baht.

1> Don't some condo blocks have management that organize short lets?

2> True, but not a consideration for a retirement visa, where the 'tie' is a deposit in a Thai bank ????

3> My point is: retirees > tourists

4> Kind of what I'm thinking of, but in CM. Something like this would be fine:

https://perfecthomes.co.th/property/2-bedroom-condo-sale-city-view-tower-tha-phae/

(if offers 25% below the asking price are often accepts, as has been reported in this thread, and prices drop 33%, that would go for ~THB1m)

 

Edited August 24, 2020 by onebir

[scubascuba3]

1 hour ago, onebir said:

I think we might be analysing different situations?

1> ie the rental yield is 1/27.7 = 3.6% >> most currencies' interest rates  (& these set to stay low). ie if you don't have an apartment and want to spend significant amounts of time each year in Thailand in a specific place, buying is pretty attractive even at current prices. Provided you have the funds to buy in cash, and the ability to ride out a property price crash (...not my plan! see 4)

2> True, but I imagine renting it out 3-4m/year when I'm absent could cover those?

3> True, but this tied up is also somewhat safe from the vagaries of a shaky banking system

4> I started this thread to get advice about how to buy reasonably close to the bottom

5> True, but I'm eligible for a retirement visa. Not much help right now, & perhaps the deposit requirement will be increased, but I think immigration considers retirees less problematic than other classes of farang? (Correct me if I'm wrong...)

Renting for 3-4 months is unlikely plus if you want to leave your things there, who wants to see that, there are so many condos empty it's unreal. Many people do buy and leave their stuff there when away. If you do buy it's better to assume you won't rent it

Edited August 24, 2020 by scubascuba3

[Barnabe]

16 minutes ago, onebir said:

1> Don't some condo blocks have management that organize short lets?

2> True, but not a consideration for a retirement visa, where the 'tie' is a deposit in a Thai bank ????

3> My point is: retirees > tourists

4> Kind of what I'm thinking of, but in CM. Something like this would be fine:

https://perfecthomes.co.th/property/2-bedroom-condo-sale-city-view-tower-tha-phae/

(if offers 25% below the asking price are often accepts, as has been reported in this thread, and prices drop 33%, that would go for ~THB1m)

 

 

Typically those short let condos are more like condotels, which only allow you to stay there X months a year (X < 6).

 

I think you might be demanding too much of a price cut even at a market bottom, I don't think the 20% below asking price + 33% price drop is cumulative. You either get a 20% cut from asking price now, or a 33% cut down from the current asking price later.

 

You could probably rent that place for less than 10k a month? I would always rent and get the added flexibility. In 5 years you might be bored of CM, it's a small city... you might want to have the hustle and bustle of Bangkok or spend a few months in the beach or just live in the beautiful countryside outside of CM.

 

Edited August 24, 2020 by Barnabe

[onebir]

10 minutes ago, Mike Teavee said:

do you really go back to exactly the same place every "Holiday"? 

Yes! ???? It may seem boring, but I don't like travelling. If I find a city I like (eg Kunming, Yunnan, China) I do enjoy exploring it. Often there are interesting places only locals know about, and you can make friends. (I speak Chinese, but there's no retirement visa for China. & I think China's set to get even more xenophobic - at the official level; I've rarely experienced xenophobia from Chinese people. So I've written off China for now.)

[onebir]

2 minutes ago, Barnabe said:

I think you might be demanding too much of a price cut even at a market bottom, I don't think the 20% below asking price + 33% price drop is cumulative. You either get a 20% cut from asking price now, or a 33% cut down from the current asking price later.

We'll see... Property prices in many cities & even countries have dropped 50%, following far less severe economic shocks. (Notably London 1990-94, HK 1997-04, Ireland 2008-13).

 

It also seems that Covid has accelerated the trend towards working from home, which should reduce the premium commanded by relatively central locations (which I prefer).

[Airalee]

On 8/24/2020 at 4:20 PM, onebir said:

4> Kind of what I'm thinking of, but in CM. Something like this would be fine:

https://perfecthomes.co.th/property/2-bedroom-condo-sale-city-view-tower-tha-phae/

(if offers 25% below the asking price are often accepts, as has been reported in this thread, and prices drop 33%, that would go for ~THB1m)

That wouldn’t be my choice of building in CM, nor location, as I would prefer to be closer to Sirimankalajarn/Nimman/Maya or even as far out as Canal Road etc.  I think living in the Thapae area would get old quickly.  I met the owner of the website (Simon) years ago when a friend of mine rented a unit at Mountain View Condo through him.  If I were to buy a condo in CM I would probably use him as an agent...and still lowball.
 

That condo in particular is quite depressing.

[onebir]

11 minutes ago, Airalee said:

1>That wouldn’t be my choice of building in CM, nor location...

2>I met the owner of the website (Simon) years ago

3>That condo in particular is quite depressing.

1> Just an example really - tho it does seem very central. My 'plan' is to study in CM (maybe a school in Pantip Plaza?) & get to know the city before d

2> The perfecthomes one?

3> I've lived in considerably worse ????

[kingofthemountain]

On 8/24/2020 at 4:36 PM, onebir said:

Yes! ???? It may seem boring, but I don't like travelling. If I find a city I like (eg Kunming, Yunnan, China) I do enjoy exploring it. Often there are interesting places only locals know about, and you can make friends. (I speak Chinese, but there's no retirement visa for China. & I think China's set to get even more xenophobic - at the official level; I've rarely experienced xenophobia from Chinese people. So I've written off China for now.)

Are you aware of the air pollution problem in CM ?

It's worse year after year, you should be forced to leave

for health reasons, Renting is the best option,

 

Also don't forget some neighbors can be a real pain

particularly in the cheap ones (Heavy smokers, noise 

drunkers and so on) , You can fix something in your condo

but you can not fix your neigbors, and believe me, sometimes 

you have no choice except to leave, it's not a problem if you rent

but if you are the owner you are stuck here

 

Edited August 25, 2020 by kingofthemountain

[onebir]

5 minutes ago, kingofthemountain said:

Are you aware of the air pollution problem in CM ?

 

Also don't forget some neighbors can be a real pain

Both valid points, thanks!

[Barnabe]

10 minutes ago, onebir said:

Both valid points, thanks!

You seem to have your mind set on it, so won't try to convince you, but my final comment is that you are comparing Kunming, a city of six million people, with a tiny city that doesn't even have 150 thousand souls...

[onebir]

7 minutes ago, Barnabe said:

You seem to have your mind set on it, so won't try to convince you, but my final comment is that you are comparing Kunming, a city of six million people, with a tiny city that doesn't even have 150 thousand souls...

I don't have my mind set on anything really, just a tentative plan to spend some time in said tiny city (which based on street pics looks a lot like China 15y ago, before they commercialized the soul out of it!)

[Maha Sarakham]

The fact that you are considering buying before even visiting seems like a problem.  Prices haven't dropped much at all.  Properties take a long time to sell in Thailand too.  There really is no rush to find a bargain, unless you find a desperate expat looking to vacate immediately.  Those great deals won't be posted on websites like Perfect Homes... my wife rented a condo from them and they were fine, but definitely way better deals around just reading the condo boards in the lobbies.

[onebir]

4 minutes ago, Maha Sarakham said:

Those great deals won't be posted on websites like Perfect Homes... my wife rented a condo from them and they were fine, but definitely way better deals around just reading the condo boards in the lobbies.

Hmm do those boards have rental deals, or also some 'for sale' notices?

[Airalee]

3 hours ago, onebir said:

1> Just an example really - tho it does seem very central. My 'plan' is to study in CM (maybe a school in Pantip Plaza?) & get to know the city before d

2> The perfecthomes one?

3> I've lived in considerably worse ????

Central for tourists is different than central for living.  Unless you plan on spending all your time on Loi Kroh.

 

Yeah...the perfect homes guy...but only if it’s his listing.  No sense in having 2 agents fight over commissions.

 

Not sure what your budget is but in the 2m range, I’d try for quality over quantity (size).  Check out Chomdoi (the circular one...not the triangular one) on Canal Road.  I’ve been in the building and it appears to be solidly built and well maintained (just my unprofessional opinion)  Just make sure you’re not facing the nightclubs to the south.  Perfect homes doesn’t have any for sale listed...you’ll have to go to other sites.  Deal directly with the selling agent.  People there seem to hold onto them and rent them out instead of selling.

 

https://www.dotproperty.co.th/en/1-bedroom-condo-for-sale-in-suthep-chiang-mai_4567966

 

This is another condo worth checking out. 

 

https://skyproproperty.com/en/baan-hor-kum-condo/

 

Edited August 25, 2020 by Airalee

[onebir]

1 hour ago, Airalee said:

>Central for tourists is different than central for living.  Unless you plan on spending all your time on Loi Kroh.

2>

https://www.dotproperty.co.th/en/1-bedroom-condo-for-sale-in-suthep-chiang-mai_4567966

This is another condo worth checking out. 

https://skyproproperty.com/en/baan-hor-kum-condo/

 

1>Yeah I won't have a sense of the place until I've spent a while there...

2>Thanks for the heads up(s)! I'll check out those places (+ sites every now and then  ???? )

[Leaver]

On 8/24/2020 at 12:07 AM, onebir said:

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  ????

If you were to buy a 500k baht shoe box for that purpose, I would agree, but buy something reasonably nice, and the money used for purchase, invested elsewhere, more than pays for the rent on the exact same property, and there are no taxes, fees, repairs and upgrades to pay, not to mention, you money stays liquid, unlike a property in Thailand.

 

The old theory of "rent is dead money" is not true for an expat in Thailand.