Is land in Thailand in a bubble right now?

[Tropposurfer]

Seems its rather relative to me. If you wanna compare one nations land prices to another go right ahead but this seems somewhat of a futile exercise seeing as yes, while they're on the same planet, they are otherwise divergent in myriad ways.

Compare the price of land in or around the major east-coast cities of Australia, and sit yourself down before you do!

 

[NorthernRyland]

13 hours ago, DrDave said:

It seems to me that land prices in even the most rural of areas are beyond the reach of most Thais. My wife recently tried to buy 4 rai of land in rural Phayao where the owner (a farmer) had previously wanted 1 million baht per rai. Her friend had offered 600K a few months back, and it was accepted however the deal fell through because her friend couldn't come up with the total amount in cash. My wife made the same offer, all cash to be paid immediately, but was rejected with the owner now insisting on 1 million per rai.

 

The land in that area that I see changing hands is mostly for commercial use, and probably heavily financed. I don't think the locals could afford these prices to use as a home or rice paddy.

 

This is exactly the kind of thing I'm seeing. 1-2 million per rai in rural areas where your neighbors are living in houses that would cost no more than 300k to build.

 

To me it feels like debt and speculation have jacked up prices to unsustainable levels which people who would actually live there are willing to pay.

 

That's interesting the guy was willing to come down 40% if paid in cash. Do you think it's because the guy knew you were involved and assumed 400k was nothing to you and thus wasn't willing to budge?

[NorthernRyland]

12 hours ago, Peterw42 said:

A sellers sees the stupid price, then puts the same stupid price on their property..

This is spot on. My wives family has 5 rai in Mae Jo Chiang Mai and they insist it mustn't be sold for less than 25 million baht because of reasons. Never mind that no one could ever make enough money with any business to turn a profit, the land is worth that much because it's a good location etc...

[NorthernRyland]

10 hours ago, KhunLA said:

6 yrs ago ... ฿320k ... 5 kms from surf Prachuap Khiri Khan (Muang ฿80k / 100 tw)

Neighbor now listed for 2 million rai (฿500k / 100 tw)

 

You're saying prices on that same plot went from 80k / 100 tw to 500k in 6 years? That's crazy inflation bubble territory then if I'm understanding you.

[NorthernRyland]

5 hours ago, JayBird said:

Go to rural Scandinavia, Canada, or 50km from town USA, and prices there are extremely cheaper.

 

I feel it should be the other way around, as Thailand is a military lead 3rd world country with high pollution.

 

This is what I'm seeing also. The worst lowest paying job in Columbia is about 8 USD per hour but compare that to Thailand where it's $10/day AND the land is like 5 times more expensive??? I guess you can make some money back on cheap labor here and make a cheap house but it's still looking like a bad deal for Thais.

 

I think the comment about land being an investment/inflation hedge (my assumption) is pretty revealing since it explains why you get prices that just don't make sense to the market.

 

1 million/rai asking is the MINIMUM I've seen anywhere in rural Chiang Mai but more often it's more around 2.5 million. I'm sorry but there's no way the kind of person that would build in those areas has that kind of money. 

[NorthernRyland]

4 hours ago, Tropposurfer said:

Seems its rather relative to me. If you wanna compare one nations land prices to another go right ahead but this seems somewhat of a futile exercise seeing as yes, while they're on the same planet, they are otherwise divergent in myriad ways.

Compare the price of land in or around the major east-coast cities of Australia, and sit yourself down before you do!

True I'm just trying to figure out if this is a market favoring sellers at this particular time.

 

Here's a photo in Mae Jo out in the woods on land with no chanote and technically illegal to sell (Nor Sor or something like that). It's common thing they've all started doing where they chop up a couple Ria in little plots (usually 50 sq wah) and sell them off. 

 

Even though the government could bulldoze your house people are stilling buying this (talked to the seller and the square plots in front are gone).

 

[KhaoYai]

Land prices and actual values are 2 completely different things.

 

The moment the new M6 motorway was announced in my area, land shot up in price.  Some plots have sold but most remain unsold 4 years later.  Once Thai's get a price in their head, that's it and they ain't budging. 

 

There's a small plot at the side of my house, just enough to build a 2/3 bed house with a very small garden. I wanted to buy it as a garden so got a Thai friend to ask if the owner would sell it without mentioning me - she wants 1.5 million! She'll be keeping it then. There's no point in even trying to negotiate when someone's asking 5 times what something's worth.

 

I know of one local guy who was asking a crazy price for some land. He stuck to his guns even though he was threatened with foreclosure as he'd used the land as collateral for a loan.  The bank foreclosed and I guess he lost a lot.

 

The Thai land/house market is very different to that of the Western countries, I doubt anyone is an expert on it - it doesn't seem to follow any logic.

[Don Chance]

Thai's being a traditional country, citizens will invest in RE or gold. They don't have access to the US stock market or the investment knowledge. So that is one reason RE is expensive, they pump all their money in RE instead of more diverse investment strategies.

You might consider Singapore Reit  for a more diverse investment in RE.

[NorthernRyland]

22 minutes ago, KhaoYai said:

I know of one local guy who was asking a crazy price for some land. He stuck to his guns even though he was threatened with foreclosure as he'd used the land as collateral for a loan.  The bank foreclosed and I guess he lost a lot.

 

The Thai land/house market is very different to that of the Western countries, I doubt anyone is an expert on it - it doesn't seem to follow any logic.

Great snapshot of what we're up against here. It just doesn't make sense. 

 

Today at the market I saw some women really looking hard at a batch of lottery tickets looking for the magic number that will make them rich. I think this speaks volumes about how the Thai people think and what drives them which appears to be mainly irrational superstitions and magically thinking.

[Sparktrader]

2 minutes ago, NorthernRyland said:

Great snapshot of what we're up against here. It just doesn't make sense. 

 

Today at the market I saw some women really looking hard at a batch of lottery tickets looking for the magic number that will make them rich. I think this speaks volumes about how the Thai people think and what drives them which appears to be mainly irrational superstitions and magically thinking.

Westerners buy double the tickets in lotto jackpots

[Sparktrader]

Imo people should be limited to 2 plots. Rich people owning 50 houses isnt right.

[freedomnow]

Wonder if Thailand is about to have a Sri Lanka moment...

Massive currency devaluation...can dream on...

 

That is one instant help with offshore funds.

 

 

[Sparktrader]

5 minutes ago, freedomnow said:

Wonder if Thailand is about to have a Sri Lanka moment...

Massive currency devaluation...can dream on...

 

That is one instant help with offshore funds.

 

 

Be good

[freedomnow]

Just now, Sparktrader said:

Be good

Think lanka currency down 40%+ now..that would solve Thailand's tourism woes if tourists got more for their money...

I remember 75 baht to pound mid-00s.

 

Conversly opening up the land market more to foreign individual ownership would make land unobtanium.

[Sparktrader]

Western rates going up pushes up currency.

[KhaoYai]

10 minutes ago, itsari said:

Be interesting how that law change will change the market 

Well it hasn't worked in Thailand.  The Thai land law is supposed to be there to protect the Thai population from an overheated market caused by foreign buyers.  I suspect that its actually there to protect Thai developers.

 

Whatever, it hasn't worked for much of the population - how do you buy a house on 10,000 per month?  Its the same the world over, those at the bottom of the income scale are being priced out - not by foreigners, by the market itself.

 

Its fast becoming a really big problem in the UK for example - I remember having to save £2000 for the deposit for my first house. It wasn't easy but it was very do-able.  Now kids are having to find £50 - 60K + and they just can't do it.  Its not the deposit that's the problem now - its the amount they can afford/are allowed to borrow. I borrowed 10% of an average priced terrace house (£20k). The same house today is worth £200k so a 10% deposit would be difficult but very do-able for my daughter as it was for me. The problem is that house prices have risen and salaries haven't kept up - by a long chalk. There is no way she can either borrow £180,000 or be allowed to.

 

I suspect that its the same problem in Thailand - social division - the have's and the have not's.

[DrDave]

2 hours ago, NorthernRyland said:

That's interesting the guy was willing to come down 40% if paid in cash. Do you think it's because the guy knew you were involved and assumed 400k was nothing to you and thus wasn't willing to budge?

That's very possible. My wife, however made it clear in a subsequent phone conversation with the owner that she could not pay more than 600k/rai. Pretty much take it or leave it. He left it. I'm hoping he'll reconsider in the next few weeks because although it's currently a rice paddy it's in an excellent location, but I doubt he'll change his mind.

[NorthernRyland]

7 minutes ago, DrDave said:

That's very possible. My wife, however made it clear in a subsequent phone conversation with the owner that she could not pay more than 600k/rai.

He must think you're holding out on him. Maybe not because you're a Farang but it must have been something because he agreed on a price. That sucks, good luck.

[KhaoYai]

3 minutes ago, NorthernRyland said:

We're getting off topic now but the problem in the US is debt first and foremost.

Well yes, I suppose we are but it seems there's a common thread running through all/most countries - houses/land is not affordable for a significant portion of the population.

 

The ridiculous prices in some areas of Thailand at the moment don't appear to have any foundation but the affect on buyers will be the same.

 

Thai's seem to have a different way of looking at land prices - as you've noted already. They also have a completely different way of viewing a location. If someone announced a new motorway near my UK house, the value would fall through the floor - in Thailand the opposite happens.

[KhaoYai]

7 minutes ago, itsari said:

Here in Thailand a young couple can buy a house if they want .

No they cannot - not simply 'if they want'. They can buy a house if they can afford it and a sizeable portion of the population can't. I have several Thai friends that cannot afford to buy a house and all they see is that possibility moving further away from them.  Are you aware that many people in Thailand work for 10,000 baht per month? One of my friends has to work over every night to boost his wage to 15,000. His wife earns around 10,000 - are you suggesting they can buy a house on 25,000 per month?

 

The normal working week for many in Thailand is 6 days and many work 10 hour days just to make ends meet.  How would you suggest a Thai person does as you did and takes on an evening job?

[itsari]

1 minute ago, KhaoYai said:

No they cannot - not simply 'if they want'. They can buy a house if they can afford it and a sizeable portion of the population can't. I have several Thai friends that cannot afford to buy a house and all they see is that possibility moving further away from them.  Are you aware that many people in Thailand work for 10,000 baht per month? One of my friends has to work over every night to boost his wage to 15,000. His wife earns around 10,000 - are you suggesting they can buy a house on 25,000 per month?

 

The normal working week for many in Thailand is 6 days and many work 10 hour days just to make ends meet.  How would you suggest a Thai person does as you did and takes on an evening job?

If you want a roof over your head and keep your expectations low then it is possible here in Thailand . 

 

When i bought the house in the UK most manual workers like my self were not offered loans on a house . I was working as a plumber that gave me access to making good money in the evenings and weekends . I am a determined person that does not give up . I am now working on  a 100 square meter basement that I alone have created . That is what you have to do to buy a house where ever you maybe .

 

I lived in Norway for 25 years and while there i saw the well educated young people have money thrown at them by the banks as they were considered a good bet . Two cars a house and all the trimmings with no deposit required . I mention that as I see young people today want everything with out putting a great deal of effort in .

[BritManToo]

6 minutes ago, 4MyEgo said:

the Thai market is cheap to foreigner's who have some money,

Not true, I can buy rural property in France for 1/4 the price of property in rural Thailand.

Plenty of run-down farms in France with big land for E20k or less.

Try buying a farm with 4Rai in Issan for 800kbht.

Not to mention I can buy in my own name.

[KhunLA]

31 minutes ago, BritManToo said:

Not true, I can buy rural property in France for 1/4 the price of property in rural Thailand.

Plenty of run-down farms in France with big land for E20k or less.

Try buying a farm with 4Rai in Issan for 800kbht.

Not to mention I can buy in my own name.

Same with USA, plenty of inexpensive (relative) rural land for sale.  Actually you can still buy houses fairly cheap, if not prejudice, as my brother just sold his house for $55k USD.  Was really happy to get that, for townhouse, low taxes, but sh!t school district, Philly metro.  Same house I owned for about 15 yrs, that I paid $22k for in 1985.  Easy access to everything a large metro has, not out in the middle of nowhere.

 

I'd equate that to standard 2 story shophouse here, but better, and with a small yard.  Same as I'm renting here, but a bit better there, and cheaper.  This rental is probably ฿2 mill.  Only advantage here, 1.5 km to surf, but nothing else. 

 

Don't believe everything you read - Average home price Philly metro $250k

[NorthernRyland]

11 minutes ago, KhunLA said:

Same with USA, plenty of inexpensive (relative) rural land for sale.  Actually you can still buy houses fairly cheap, if not prejudice, as my brother just sold his house for $55k USD.  Was really happy to get that, for townhouse, low taxes, but sh!t school district, Philly metro.  Same house I owned for about 15 yrs, that I paid $22k for in 1985.  Easy access to everything a large metro has, not out in the middle of nowhere.

 

If you go back to the previous page you can see the map to where that land was from. About 9k from downtown and in an existing subdivision so this is hardly rural yet the price still a fraction of what I pay around Chiang Mai.

 

For reference here's the general area in the outer edges of Chiang Mai where I live, which is about 20km from the city center and more rural.

[BritManToo]

4 hours ago, KhaoYai said:

are you suggesting they can buy a house on 25,000 per month?

Easily,

25k/month gets them a 1.5M loan, repayments are 9k/month.

My house was purchased on exactly that basis (+300k deposit)

Plenty of houses around me 10Km from CM for 1.5Mbht.

[BritManToo]

16 hours ago, NorthernRyland said:

This is exactly the kind of thing I'm seeing. 1-2 million per rai in rural areas where your neighbors are living in houses that would cost no more than 300k to build.

I've got 4Rai of rice paddy 20Km from Lomsak you can have for 2Mbht.

[Rimmer]

Multiple off topic posts and replies have been removed, the topic is about:

Is land in Thailand in a bubble right now?

 

It is not about lottery ticlkets, Sydney or downtown Columbia

[Delight]

 Could it be that these plots of land are only of interest to foreigners.

Or maybe that's the way that Thai landowners see it.

Given that (which may or may not be true) then silly high prices will be the norm.

Thai sellers are never in a rush to sell.

For a bubble to occur then buying has to occur at a rate much higher then normal.

Q -to OP  . Is this excessive buying actually happening? 

[NorthernRyland]

43 minutes ago, Delight said:

Q -to OP  . Is this excessive buying actually happening? 

what I see is tons of people trying to sell but it doesn't look like there's buyers.

 

The only thing I've seen sold fast are these subdivided plots of 4-5 rais where you buy 50 sq wah lots for 250,000 baht, which people can afford. This would be a nightmare though because the area will be a construction zone for years while people build things here and there.

[Tuvoc]

1 minute ago, NorthernRyland said:

what I see is tons of people trying to sell but it doesn't look like there's buyers.

 

Yes, we have land which my wife has been wanting to sell for quite a while, but there are no buyers, in no small part due to how Covid has hit the economy.