The actual value of land in a Thai person's thinking

[Dan O]

3 hours ago, Jackbenimble said:

a good guttering salesman/woman could make a killing here. 

You would think that but most houses don't have gutters.  Go figure

[FruitPudding]

7 hours ago, Scouse123 said:

Separately, on a different note.

 

Adjacent to where I live, we ourselves have 4 Rai walled in, I made an offer on some vacant land, (2.5 Rai) to ensure we never had neighbours.

 

The old woman said she would sell it, the land is not roadside, it is in the village, and they have been growing sugar cane illegally, and the land is not much use.

 

She first asked 600K, then 750K baht, then 1 million baht, then 1.5 million baht.

 

It changed so much regularly, I walked away. I would have given her the 750K for 2.5 Rai. She was putting the price up every time my partner spoke with her.

 

To cut a long story short, she struggled with money and borrowed from the Chinese moneylenders who have just taken her land for the borrowed 350K debt.

 

So, she is out of pocket 400K for being greedy and an idiot.

 

The daughters have been stopping my partner and calling at the house for weeks, trying like hell to sell to us to pay the moneylenders and get something out of it.

 

My other half said, he is no longer interested. Now, they give me 'dirty looks 'when I drive past.

 

 

Lol, this gave me a chuckle.

[LukKrueng]

22 hours ago, beautifulthailand99 said:

My wife's sister has inherited about 1/3 of a rai of land near Hat Yai airport. it is reached by a dirt road of about 300m connected to a paved road and has electricity via poles but no water connection or sewerage. Looking at the Land Office map there seem to be loads of small parcels of land all in the jungle. She seems to think that land is worth about 5 million a rai in this area so would give a nominal value of around 1.5 -2  million.

 

I can't see why anybody would want to buy this land - a big developer would be looking for large plots next to existing facilities and small pockets are of no real use to them and there is no developed neigjbour who would want to add this to their footprint. So the only value I can see is it has some value for someone rich enough to buy up cheap land for their own landbank and would only do so if it was very cheap. Am I roughly right in my thinking and what would be a very cheap 0.5 of a mill maybe? I suspect she won't want to accept a price that isn't aligned with her current thinking and so will never sell and therefore has no actual value. Or is it a bit like Bitcoin but a tangible asset in and of itself?

The first thing I'd do is check the land department evaluation to get some idea about the official value. Then go around and see if there are any properties for sale in the same area and check the asking price. Also, if possible, try to find out of any property was sold recently and how much was paid for it. There might be developing plans in the area, or some rumours about such plans, and that can bring the price up

[khunPer]

22 hours ago, beautifulthailand99 said:

My wife's sister has inherited about 1/3 of a rai of land near Hat Yai airport. it is reached by a dirt road of about 300m connected to a paved road and has electricity via poles but no water connection or sewerage. Looking at the Land Office map there seem to be loads of small parcels of land all in the jungle. She seems to think that land is worth about 5 million a rai in this area so would give a nominal value of around 1.5 -2  million.

 

I can't see why anybody would want to buy this land - a big developer would be looking for large plots next to existing facilities and small pockets are of no real use to them and there is no developed neigjbour who would want to add this to their footprint. So the only value I can see is it has some value for someone rich enough to buy up cheap land for their own landbank and would only do so if it was very cheap. Am I roughly right in my thinking and what would be a very cheap 0.5 of a mill maybe? I suspect she won't want to accept a price that isn't aligned with her current thinking and so will never sell and therefore has no actual value. Or is it a bit like Bitcoin but a tangible asset in and of itself?

There is today an official appraised value of land, used for land taxation, but often the appraised value do not reflect a sales value.

 

Land is worth as much as it can be sold for; so, the only way to estimate a real value is to search for what similar land has been sold for.

 

In my view 5 million baht per rai is an overvalue value based on your description, perhaps half if it's an attractive area. It could even be down to a few hundred thousand baht per rai. Smaller land plots however, are often priced little higher than the division of the rai-price; i.e., if 1 rai is worth 3 million baht, then 1/3 rai might perhaps be worth 1.5 million baht.

[beautifulthailand99]

7 hours ago, Dan O said:

You would think that but most houses don't have gutters.  Go figure

That would make a guttering salesman a protected job for ThaI nationals only and as there are no gutters ergo there is no demand for them. Another unneccesary falang overhead like overpasses and roundabouts and health and safety. Besides which the spirit house sorts out all sorts of iussues on a daily basis.

[beautifulthailand99]

5 hours ago, LukKrueng said:

The first thing I'd do is check the land department evaluation to get some idea about the official value. Then go around and see if there are any properties for sale in the same area and check the asking price. Also, if possible, try to find out of any property was sold recently and how much was paid for it. There might be developing plans in the area, or some rumours about such plans, and that can bring the price up

Cheers, great advice. Thanks for that.

[beautifulthailand99]

5 hours ago, khunPer said:

There is today an official appraised value of land, used for land taxation, but often the appraised value do not reflect a sales value.

 

Land is worth as much as it can be sold for; so, the only way to estimate a real value is to search for what similar land has been sold for.

 

In my view 5 million baht per rai is an overvalue value based on your description, perhaps half if it's an attractive area. It could even be down to a few hundred thousand baht per rai. Smaller land plots however, are often priced little higher than the division of the rai-price; i.e., if 1 rai is worth 3 million baht, then 1/3 rai might perhaps be worth 1.5 million baht.

Great advice and insight too. Many thanks.

[Scouse123]

15 hours ago, Dan O said:

It gets crazy how their minds work some times. Same with new developments being built often have house so close that the rain run off from the roof falls into the neighbors yard

 

 

They love to be in each other's pockets and next to each other, then whinge like hell about the noisy neighbours!

 

Go to Lotus early in the morning and park your car in an empty car park, I'll guarantee when you return half an hour later, a car has parked bang next to yours, even with the car park empty.

[LukKrueng]

12 hours ago, khunPer said:

There is today an official appraised value of land, used for land taxation, but often the appraised value do not reflect a sales value

The reasons for the difference are

1. The land department only re-evaluate every so often, usually every few years (in 1 specific area I know it's every 5 years, might be different in other places). Market value fluctuates according to supply\demand.

2. The official valuation is for the land only, without considering what's on the land, thus an empty plot and a plot with mature plantation are estimated at the same price, whereas the market value takes into consideration what's on the land.

 

[Jackbenimble]

23 hours ago, Dan O said:

You would think that but most houses don't have gutters.  Go figure

Hence my comment.

[khunPer]

9 hours ago, LukKrueng said:

The reasons for the difference are

1. The land department only re-evaluate every so often, usually every few years (in 1 specific area I know it's every 5 years, might be different in other places). Market value fluctuates according to supply\demand.

2. The official valuation is for the land only, without considering what's on the land, thus an empty plot and a plot with mature plantation are estimated at the same price, whereas the market value takes into consideration what's on the land.

There might be huge differences between the provinces in what is custom.

 

1. Appraised land value where I live has been under-estimated for the 19 years I've had land here. The estimated value represented about 1/10th of the sales value 19 years ago, and even that sales prices for land have around doubled most places doubled since then, the appraised value remained unchanged. However, this year it was halfed to help the burden of the new land tax that should be paid 100% from 2023; i.e. appraised land value (without buildings) represents about 1/20th of actual sales price.

 

But up on Isaan the land office I've been dealing with, demanded the appraised land price adjusted to actual sales price when transferred and proof of sales agreement with price. This actually makes good sense for an appraised land value.

 

That's why I wrote about appraised land price: "...but often the appraised value do not reflect a sales value."

 

2. It's custom in my home country that an appraised land price shall reflect the land without any constructions on top – so it makes good sense if it's the same here – while a property estimate includes land and the usage of the land; i.e., building or plantage etc. Therefore a value of a property with buildings shopuld normally be higher than the land value alone.

 

OP's question was about "land value", not a property with buildings; i.e. land & house.

[Dan O]

15 minutes ago, Jackbenimble said:

Hence my comment.

I understood your comment. I was pointing out it wouldnt work as most thais don't use any gutter system. The are available easily, thais just don't see the need for them so it would be a dead end unfortuneately

[BTB1977]

As soon as you said my wife's sister I lost interest.  Any business her family has brewing never concerns me, ever. They always think my wife has money just because she married me. They found out the hard way after we got  married her brother and son each purchased new vehicles. After a few months of not being able to make the payments they expected my wife to help them. Many phone calls asking for money because they always had some problem come up. Than asking us to buy the vehicles to get them out of debt.  Bank ended up taking them and both in court with the finance company. Having to pay the balance of the outstanding loans for trucks they no longer have. If you show them you are week, they will try to take advantage of you every time. 

[brianthainess]

Land is only worth what the land office says it is. IME.

[brianthainess]

21 hours ago, Jackbenimble said:

On 12/22/2023 at 1:46 PM, Dan O said:

You would think that but most houses don't have gutters.  Go figure

Hence my comment.

I have no gutters, just black plastic on the ground about 4" deep filled with Hin. 

[rickudon]

Agricultural land in the UK would be less than a million baht an acre, let alone a rai. Unless the land has serious development potential, land in Thailand is never worth more than 500,000 baht a rai. Our family has had land for sale for years, all totally overpriced - none has ever actually been sold.

[MangoKorat]

On 12/21/2023 at 11:16 PM, Scouse123 said:

We have loads of shut down rusting sites on plots of land near the main road that were once small petrol stations, but they never learn.

Don't forget the ubiquitous shop houses - built in the middle of nowhere and empty.  Next thing you know, someone builds an identical block 2km away - also empty. Good business that shophouse game .

[beautifulthailand99]

6 hours ago, rickudon said:

Agricultural land in the UK would be less than a million baht an acre, let alone a rai. Unless the land has serious development potential, land in Thailand is never worth more than 500,000 baht a rai. Our family has had land for sale for years, all totally overpriced - none has ever actually been sold.

I think you have hit the nail on the head here- a 1/3 rai would be 150 -200k which sounds about right. Factor in the cost of an agent say 50k  signage and clearance and she would be lucky to see 100k if and when it sold. That will come as a shock to her when that reality dawns as it has some sort of mythical get out of jail free status or tell me about the rabbits Geroge...

[beautifulthailand99]

8 minutes ago, MangoKorat said:

Don't forget the ubiquitous shop houses - built in the middle of nowhere and empty.  Next thing you know, someone builds an identical block 2km away - also empty. Good business that shophouse game .

Oh yes have seen thousands of those over the years unbridled stupid optimism. Build it and they will come. Except they never did.

[Celsius]

On 12/22/2023 at 9:45 AM, radiochaser said:

15 or 20 years ago a Japanese firm wanted to buy the 10 rai of land my mother in law owned.  They offered her $2,000,000.00 U.S. for it.   Mother in law turned them down.  

My wife now owns the 10 rai and has a signed contract with her cousin who farms rice on it.  It is worth more than she gets for the lease.  

 

Was it a bearing company?

[Stocky]

21 minutes ago, beautifulthailand99 said:

Oh yes have seen thousands of those over the years unbridled stupid optimism. Build it and they will come. Except they never did.

The vacant shop house lots in the middle of nowhere are the fruits of money laundering. They were never intended to be lived in. It's just getting grey money out from under the table, washed, and in the bank.

 

You're no doubt right about the plot of land, but the area around Hat Yai airport has developed rapidly, there was very little there twenty years ago. After the 2010 floods quite a lot of new housing went in along the road to the airport because it sits on high ground. There are worse areas to hold land.

 

.

[beautifulthailand99]

Here's the actual land taken 12 years ago when her husband had erected a sort of makeshift dwelling on it which has now been demolished to deter squatters. 

 

 

[MangoKorat]

What I find difficult to understand is that things that would normally devastate the value of land in other countries, can often lead to massive increases in value in Thailand.  Granted, some of those increases are very much 'hope value' but it does happen.

 

My house lies between Pak Chong and Khao Yai, within 500m of the new M6 motorway (that will surely be completed one day).  When I bought it, I probably paid a little more than it was worth but that didn't really matter, I bought it for the location and setting - rural and quiet yet within 10 minutes of civilisation.

 

Then came the announcement about the M6 and values started to rise.  When construction actually started, prices surged again.  They seem to have levelled now but we still get plenty of Bangkokians driving round at weekends looking for house plots. The plot next door to me - just a small to average house plot, went on the market this year at 2 million baht!

 

For me, the 'new road' as they call it, is the kiss of death and I'm probably going to sell up.  If a new motorway was built close to your home in the UK, the value of your house would plummet - not in Thailand it seems. Things may not be as bad as the seemed at first - the road was advertised as an Elevated Highway but in fact, that seems to only apply to sections where it follows the existing Highway 2. Thankfully the section closest to my house is at ground level and the area between my house and the M6 contains a belt of trees.  I also expect that noisy trucks will probably choose not to pay a toll and continue using Highway 2.

 

Nevertheless, what was a rural location is now on its way to being swallowed up by the city - not what I want so I'm off. The problem is that whether they are real values or not, finding a reasonably priced plot within 10km of where I am, is impossible - people are asking crazy money for their land. Some will almost certainly not attract buyers at the asking prices but in Thailand, they seem to hang on to land rather than sell it for less than they THINK its worth.

 

A lot of it arises, I believe, from the availability and cost of utility provision - + the time it can take to get electricity for example, to your plot even when money is no problem.  Access to paved roads is also a major factor.  This is probably why what is known as 'Ribbon Development' (development concentrated on or very close to a highway or road) is so prevalent in Thailand. I remember the first time I made a car journey from Bangkok to Pattaya (no highway 7 then) - just about the entire trip seemed to involve 'built up areas'. Little did I know that much of it only stretches a few metres back from the highway.

 

So - when a new road is planned, I suppose its inevitable that land prices can explode.

[Chris Daley]

Scam number 349.  Renting land.  An easy way to divert money from the alien.  There are probably ten other aliens that also ''own'' your Hat Yai plot.

 

[Scouse123]

7 hours ago, MangoKorat said:

Don't forget the ubiquitous shop houses - built in the middle of nowhere and empty.  Next thing you know, someone builds an identical block 2km away - also empty. Good business that shophouse game .

 

 

I remember stopping at one of these on our way to Kalasin to nip to the loo, so we thought we would grab a coffee at one of the places described above.

 

She then tried talking us into buying it, and what a good deal it was. She had been asleep until we rolled up, bored out of her mind.

 

The place was off a busy motorway road with nothing, not a bloody thing, around it.

 

I declined her generous offer.

[radiochaser]

11 hours ago, Celsius said:

 

Was it a bearing company?

I don't know what the Japanese company wanted to do with the property.   If my wife did tell me, I have forgotten. 
Mother in law valued the land more than the money.