Prices of single houses and townhouses drop in 1st quarter

BANGKOK:-- Prices of single houses and townhouses had dropped slightly in the first quarter of this year upon consumer concerns over the economic slowdown and political instability, according to a survey released by the Government Housing Bank.

GHB’s Real Estate Information Centre’s Research Division reported the survey calculated based housing prices in greater Bangkok in the first quarter of 2007 showed the single house price index stood at 159.5, down 1.2 per cent from the previous quarter, but up 0.4 per cent from the same quarter last year.

The townhouse price index stood at 151.2, down 0.1 per cent from the previous quarter, but up 2.2 per cent from the corresponding period the year before.

The land price index was 163.9, up 0.1 per cent from the previous quarter and 4.1 per cent from the same quarter last year.

The decline in the single house and townhouse indexes in the first quarter was attributed by a slow purchase of houses, particularly those with medium prices.

In addition, consumers were concerned with the economic slowdown and the political instability although fuel prices had dropped to the lowest level in several months in mid-January and turned to rise again in early February.

The centre said even though many commercial banks had cut housing loan rates by 25 basis points, consumers decided to buy houses with smaller areas, which are suitable to their household revenue.

With the development, average housing prices had dropped although land prices still edged up.

--TNA 2007-05-02

2 days and no responses! Seemed a great opportunity for all the "Merchants of Doom" to vindicate their views!

Edited May 3, 200719 yr by The Vulcan

What's the point, they'll just get shot down by all the ostriches ...

What's the point, they'll just get shot down by all the ostriches ...

Touche - I asked for that!

Land prices up 4.1% last year. Hardly looks like the massive appreciation before a bubble or the sudden decline when the bubble bursts. Perhaps the truth lies somewhere between where the "merchants of doom" and the "ostriches" flog their extremism.

2 days and no responses! Seemed a great opportunity for all the "Merchants of Doom" to vindicate their views!

There is no need for any of us to rub it in, many of us could clearly see what was happening with the economy and the real estate sector we were merely pointing out the obvious. There real estate market (outside of Bangkok and some select areas in Phuket) in Thailand is dead, even in Pattaya! I recently checked out a real estate website in Chiang Mai and there were 17 price reductions on properties just in the last month, so much for the idea that thais don't lower there asking price and will wait for years to get the price they want. I am certain that in the past this may have been true, but there are a lot of properties on the market and very few buyers at this time (not to mention a looming credit crisis) so I would expect to see many other sellers lowering there asking prices in the months to come. Hopefully by this fall there will be elections and a new constitution, and that coupled with the retracement of the baht should at least bring some speculators back in to buy up some condos, however if the laws don't change regarding foriegners purchasing a home then the single family residence sector will continue to stagnate. As far as the "merchants of doom" thing goes, I can't speak for everyone who has been posting what you probably consider negative information about the Thai economy and real estate markets, but I think that as the year goes on the readers of this forum will realize that we had a better handle on the situation than the "rose colored glasses brigade".

2 days and no responses! Seemed a great opportunity for all the "Merchants of Doom" to vindicate their views!

No responses because the article is not earth shaking or anything near that. Basically it looks like the economy is stagnant.

I do feel that the longer the military stays in power there will be a growing reluctance by foreign concerns to invest large sums of money here. They will basically take a wait-and-see attitude; just like the small fry are doing.

I'm 50 and will probably start a house build in January. I don't think the retirees will be run out of Thailand; at least those that can meet the monetary requirements. I don't really care about house prices. The cost of my home is based on material costs and labor which can be closely monitored. I am building to have a quality place for my family to live; if the house is worth more in 5-10 years fine......if it's worth less I don't care as I don't view it as an investment.

As far as the real estate market being dead; perhaps this is true with regards to sales of existing homes. In the Issan area however 'new builds' are going strong from what I see. My builder already has 15 contracts in place for 2007.

Not too much should be read into the 'falling house price' statistics - although I admit I have no idea how their index is compiled. Thais are just beginning to get into mortgages (mortgages in Thailand are 17% of GDP compared to 125% in the UK) and so middle income Thailand is buying property. This has meant a shift in the development market from the high end (Bt4m+) to the mid-low end (Bt1-2m). As a result prices are falling, reflecting an increased supply of lower cost housing rather than any sharp decline in house prices.

As for real estate websites and their prices - they really are a joke. I was looking at propertplus's website the other day. There is someone trying to sell a condo at Watercliff - which was sold new at Bt35k/sqm in 2002 - for Bt100k/sqm. The going rate for those units is realistically Bt50k/sqm - if he chooses to reduce the price does it tell us much? - apart from the fact he is marginally less stupid than we thought he was before.

Edited May 3, 200719 yr by Abrak

Not too much should be read into the 'falling house price' statistics - although I admit I have no idea how their index is compiled. Thais are just beginning to get into mortgages (mortgages in Thailand are 17% of GDP compared to 125% in the UK) and so middle income Thailand is buying property. This has meant a shift in the development market from the high end (Bt4m+) to the mid-low end (Bt1-2m). As a result prices are falling, reflecting an increased supply of lower cost housing rather than any sharp decline in house prices.

As for real estate websites and their prices - they really are a joke. I was looking at propertplus's website the other day. There is someone trying to sell a condo at Watercliff - which was sold new at Bt35k/sqm in 2002 - for Bt100k/sqm. The going rate for those units is realistically Bt50k/sqm - if he chooses to reduce the price does it tell us much? - apart from the fact he is marginally less stupid than we thought he was before.

2nd this post. spot-on

Hi folks. I was in Hua Hin, at the begining of this year (jan) price of 3bed bungalow, 2bathroom approx bht 2.8 million.

Last month same property about bht 3.4 million. If in fact they are realising these prices, .6 of a million, looks ok if

investing. Best regards jb1