Rental Prices Going Insane

[WAERTH]

I have been living in a 42 sq meter condo since 1999 for the price of 6500 baht. I pay my electricity to the electricity company, water is almost nothing and all Thai tv channels are free. I moved in when it was new.

The condo is located on a small backwater soi from Huai Kwang intersection on Ratchada. Approximately 10 minutes walking to the Subway.

Recently a new building was finished by the owner of this condominium. As curious as I am I asked for the rental prices.

For a 32 sq meters (smaller than my appartment!!) They have the nerve to ask 13.000 b/mth for the 3rd floor and 14,500 b/mth for the 4th and 5th floors!! For a 50 sq meters (only marginally larger than my room) they ask 21.000 baht p/m for floor 3 and 23.500 for the 4th and 5th floors!!

Now look at the fine print:

Electricity 7 bt a unit (more than 2 times what I pay per unit)

Furniture but NO TV NO REFRIGARATOR NO MICROWAVE!! (apart from the microwave the tV and fridge are included in my rent)

Now this is backwater soi bangkok we are talking about. Not even Silom or Thonglor or Sukhumvit.

For comparison:

An older flat with wooden flooring in Discovery Bay Hong Kong (Discovery Bay is kinda a resort) will cost you 35.000 baht a month for 90 square meters. Very good quality building. And you live in Discovery Bay in Hong Kong of all places!

What the hel_l do condominium builders in Thailand start thinking by charging so much for tiny rooms. It is plain ridiculous.

Waerth

[Captain Chaos]

I have been living in a 42 sq meter condo since 1999 for the price of 6500 baht. I pay my electricity to the electricity company, water is almost nothing and all Thai tv channels are free. I moved in when it was new.

The condo is located on a small backwater soi from Huai Kwang intersection on Ratchada. Approximately 10 minutes walking to the Subway.

Recently a new building was finished by the owner of this condominium. As curious as I am I asked for the rental prices.

For a 32 sq meters (smaller than my appartment!!) They have the nerve to ask 13.000 b/mth for the 3rd floor and 14,500 b/mth for the 4th and 5th floors!! For a 50 sq meters (only marginally larger than my room) they ask 21.000 baht p/m for floor 3 and 23.500 for the 4th and 5th floors!!

Now look at the fine print:

Electricity 7 bt a unit (more than 2 times what I pay per unit)

Furniture but NO TV NO REFRIGARATOR NO MICROWAVE!! (apart from the microwave the tV and fridge are included in my rent)

Now this is backwater soi bangkok we are talking about. Not even Silom or Thonglor or Sukhumvit.

For comparison:

An older flat with wooden flooring in Discovery Bay Hong Kong (Discovery Bay is kinda a resort) will cost you 35.000 baht a month for 90 square meters. Very good quality building. And you live in Discovery Bay in Hong Kong of all places!

What the hel_l do condominium builders in Thailand start thinking by charging so much for tiny rooms. It is plain ridiculous.

Waerth

Guess if no-one is prepared to pay these rates, the rates will come down, or else the condos will stand empty ... 'the laws of supply & demand' and all that ...

[TAWP]

Economics 101, you charge as much as you can.

If they however are overcharging and starts failing to fill the house to 90%+ you might see a reduction...

[WAERTH]

Economics 101, you charge as much as you can.

If they however are overcharging and starts failing to fill the house to 90%+ you might see a reduction...

I wish this were true .... Been here for 9 years and never saw prices coming down. They usually rather keep the condos empty then dropping the prices.

Waerth

[soundman]

I wish this were true .... Been here for 9 years and never saw prices coming down. They usually rather keep the condos empty then dropping the prices.

Waerth

Strange that but very often true.

[midas]

I wish this were true .... Been here for 9 years and never saw prices coming down. They usually rather keep the condos empty then dropping the prices.

Waerth

Strange that but very often true.

And if they are still vacant this time next year they will increase it

even further to offset the loss of income for the 12 months - Thai economics

[ColPyat]

I wish this were true .... Been here for 9 years and never saw prices coming down. They usually rather keep the condos empty then dropping the prices.

Waerth

Strange that but very often true.

No problem. There is a huge oversupply of rental property in Bangkok, and more than enough houses and apartments for very reasonable prices available.

[Jockstar]

Try Sydney then. Not enough decent rentals around

[londonthai]

I have been living in a 42 sq meter condo since 1999 for the price of 6500 baht.

everything depends on the location, most probably the rent for the new condo is the going rate in your area.

you payed for your condo before the subway was constructed, you were lucky to choose your condo close to the subway and lucky the owner did not raise your rent over that 8 years time. It's an exceptionally low rent and you might expect some adjustments - even due to inflation.

The option to live on a budget is to rent a large house and share it or even sublet. You might have some headaches but you can brake even or make some small profit.

[keemapoot]

I wish this were true .... Been here for 9 years and never saw prices coming down. They usually rather keep the condos empty then dropping the prices.

Waerth

Strange that but very often true.

And if they are still vacant this time next year they will increase it

even further to offset the loss of income for the 12 months - Thai economics

This is VERY true. Thai economics defy belief of our western concepts of logic and Adam Smith's gospel. Same with cars. If you can't sell it for 12 months, raise the price etc.. You have to check your economics degree at the door when you enter Thailand.

[WAERTH]

I have been living in a 42 sq meter condo since 1999 for the price of 6500 baht.

everything depends on the location, most probably the rent for the new condo is the going rate in your area.

you payed for your condo before the subway was constructed, you were lucky to choose your condo close to the subway and lucky the owner did not raise your rent over that 8 years time. It's an exceptionally low rent and you might expect some adjustments - even due to inflation.

The option to live on a budget is to rent a large house and share it or even sublet. You might have some headaches but you can brake even or make some small profit.

I choose the condo because I knew th subway was coming ..... they actually told me two years ago they migh raise the rental by a 1000 or so. No objections really. It was just that when I was at my fathers place in Discovery Bay recently and asked him about his rent that I was in shock ..... backwater sois in Bangkok are as expensive as the luxurious Discovery Bay Expat Resort ...... And the building quality is better to, so are the ameneties which are cheaper than here.

If I didn't love Thailand and the Thais so much I would have moved ...... Hong Kong cheaper than Bangkok would you have thought?

Waerth

For those that do not know discovery bay: http://en.wikipedia.org/wiki/Discovery_Bay

Edited October 14, 2007 by WAERTH

[Upcountry]

The option to live on a budget is to rent a large house and share it or even sublet. You might have some headaches but you can brake even or make some small profit.

That's interesting. When I lived in Boston I shared houses and apartments for a lot of the time. I wonder how common it is here among the farang population. I can't imagine it's too popular, given the lifestyle of most expats.

[think_too_mut]

I wish this were true .... Been here for 9 years and never saw prices coming down. They usually rather keep the condos empty then dropping the prices.

Waerth

Strange that but very often true.

And if they are still vacant this time next year they will increase it

even further to offset the loss of income for the 12 months - Thai economics

Japanese do similar...not raising prices but not lowering them either. For years an apartment may sit dormant.

True, the rule here is 2 months rent (key money, not refundable) for the owner once renting is contracted. They know the people do not move around too much, once they get someone to rent in, that person stays for years and years.

To change from one 2K US$ place for another, you need 12K US$ just to move in. (2 months key money, 1 month agency fee, 2 months deposit and 1 month rent).

Thais are not too bad then. They may be, isolated from what other Asians do, especially when your aim is a condo in BKK.

But "Thai economics" said as a stupidity is shared with Japanese too.

[mikethevigoman]

I wish this were true .... Been here for 9 years and never saw prices coming down. They usually rather keep the condos empty then dropping the prices.

Waerth

Strange that but very often true.

there are condos to let in view talay in pattaya, the rents are same as they were 7 years ago when i lived there, amazing

[Crash999]

For comparison:

An older flat with wooden flooring in Discovery Bay Hong Kong (Discovery Bay is kinda a resort) will cost you 35.000 baht a month for 90 square meters. Very good quality building. And you live in Discovery Bay in Hong Kong of all places!

That's not necessarily a fair comparison- Discovery Bay is on an island separate from HK and the property prices there are relatively low for HK. Although the ferry takes only about 25min (during good weather) to get to HK island one has to wait up to 30min for the ferry, and on nights (especially weekend nights) the queue for the ferry can be up to 90 min long. So it can take up to 2 hours to get home, not including the time it takes from wherever you are to get to the pier.

As such a place in Huay Kwang isn't really comparable as it's far closer to the Silom/Sukhumvit areas than DB is to Cental. More comparable would be near Mongkok where a 60m2 place with a city view in an average building runs about 70,000 baht. Want to live in a newer unfurnished 90m2 place in Midlevels? Try 130,000 baht/month and up.

Sounds like your building owner is really trying to maximize his returns. If he can get that money then more power to him- but my old building on Sukhumvit Soi 8 is still renting studios out for about 16k baht/month and there are plenty of alternatives (for example iHouse) which are far cheaper than what he's asking.

Edited October 14, 2007 by Crash999

[rainman]

That 2 months rule gave me a laugh when I moved out of my rented apartment about a year ago. The lady that owned the 3.5M Baht apartment said "I don't have the deposit anymore ...you gave it to me 2 years ago!" when I was about to hand over the keys to her and get my deposit back. So I kept the keys and told her to give me the apartment instead then, if she couldn't pay me the deposit back. 2 weeks later I got my deposit.

[ZukiSuzuki]

"Thai economics" said as a stupidity is shared with Japanese too.

Japan has the world's second largest economy because we are so stupid.

[Pepe']

The pollution is getting denser by the day. More particles per cubic cm than ever before. Petroleum byproducts, heavy metals, commercial chemicals, open air trash burning, agricultural and residential insecticides and herbicides.

That's why they asking higher rents...

[FarangNoi21]

"An older flat with wooden flooring in Discovery Bay Hong Kong (Discovery Bay is kinda a resort) will cost you 35.000 baht a month for 90 square meters."

i dont what discovery bay is, but there must be some misunderstanding here because rental prices in hong kong are nowhere close to this range. even in kowloon its significantly more expensive.

[think_too_mut]

"Thai economics" said as a stupidity is shared with Japanese too.

Japan has the world's second largest economy because we are so stupid.

I was to say if Thais are stupid to keep the prices, Japanese are too.

BTW, the second largest economy in the world has seen real estate prices drop 80% (eighty %) over last 15 years.

You understand bubble and bust in real estate better than anyone.

[Suszzy]

England is worse, trust me..!

you don't know whether to laugh or cry ..

with the rent up every year..!

[Heng]

While there is market oversupply... IMO, a lot of these posts are wishful thinking on the part of the potential renter that "if I'm not renting it, it must be empty." Myself I have a dozen plus units and not a single vacancy. Not only that, in most cases I have been able to count on the renter to actually increase the value of the property (you can do whatever you want to the property... build any structure... you just can't dismantle anything when the lease expires).

It's a cousin of the school of thought... "if I don't get a visa, the economy must be crashing."

[naka]

"Thai economics" said as a stupidity is shared with Japanese too.

Japan has the world's second largest economy because we are so stupid.

Up till 1986 they were going along swimmingly. Now they have 100 year mortgages

and still live in 50 square meter "houses"

Naka.

[TAWP]

Happened to get a climps on the inside of a CEOs home of a large toy manufacturer in a gameshow-program (he wasn't a prepeared guest, so to speak) - and noticed how small and...empty the place was. Few basic things, like tv, sofa, table, but lack of nicknacks, shelfs, paintings...and this was a wealthy family. Guess he spends too much time away to care...too bad for his kids tho'.

Added> A Japanese CEO in Japan...to clarify.

Edited October 15, 2007 by TAWP

[Sunderland]

I have been living in a 42 sq meter condo since 1999 for the price of 6500 baht. I pay my electricity to the electricity company, water is almost nothing and all Thai tv channels are free. I moved in when it was new.

The condo is located on a small backwater soi from Huai Kwang intersection on Ratchada. Approximately 10 minutes walking to the Subway.

Recently a new building was finished by the owner of this condominium. As curious as I am I asked for the rental prices.

For a 32 sq meters (smaller than my appartment!!) They have the nerve to ask 13.000 b/mth for the 3rd floor and 14,500 b/mth for the 4th and 5th floors!! For a 50 sq meters (only marginally larger than my room) they ask 21.000 baht p/m for floor 3 and 23.500 for the 4th and 5th floors!!

Now look at the fine print:

Electricity 7 bt a unit (more than 2 times what I pay per unit)

Furniture but NO TV NO REFRIGARATOR NO MICROWAVE!! (apart from the microwave the tV and fridge are included in my rent)

Now this is backwater soi bangkok we are talking about. Not even Silom or Thonglor or Sukhumvit.

For comparison:

An older flat with wooden flooring in Discovery Bay Hong Kong (Discovery Bay is kinda a resort) will cost you 35.000 baht a month for 90 square meters. Very good quality building. And you live in Discovery Bay in Hong Kong of all places!

What the hel_l do condominium builders in Thailand start thinking by charging so much for tiny rooms. It is plain ridiculous.

Waerth

Mmmmmmm ... you need to get out more. Hardly a backwater soi! You're not far from the city centre. Try living out near Don Muang, Nonthaburi, Minburi, etc.

[londonthai]

That's interesting. When I lived in Boston I shared houses and apartments for a lot of the time. I wonder how common it is here among the farang population. I can't imagine it's too popular, given the lifestyle of most expats.

the accommodation in bangkok is cheap enogh (comparing to Boston) to have it's own place, without the need to share. Many expats do have a larger place than they need for themselves to allow relatives/friends from abroad to visit them on holidays. The other issue is that expats are more transient community than americans - even university students in Boston would stay put for several years to complete their education.

however, for those on the budget, subletting your rented property can be a source of income

[Guest jonzboy]

i know the reference to discovery bay in hong kong is a bit off topic, but i have to correct several misconceptions

rental prices have risen out of the asian economic duldrums of a few years back and a condo of the size mentioned by the OP could command as much as 60,000 to 80,000 baht per month depending on age, location, condition, etc

add to that management fees of about 5,000 baht

the ferry between Central and Discovery Bay does NOT have a queue at any time of day, also the service runs to a strict timetable so you can time your arrival at the pier to avoid any wait at all

i know, because I live there

but i would still prefer to be living in LOS, and plan to do so quite soon

[dantilley]

It's an exceptionally low rent and you might expect some adjustments - even due to inflation.

Not really - it's fairly cheap but not exceptionally low at all. Get away from Sathorn, Sukhumvit Road and Silom and these kind of prices are the norm.

But, to go back to the OP, 23,500 Baht for 50 square meters with no TV or fridge and 7 Baht a unit electricity - now that definitely is a rip-off!

Edited October 16, 2007 by dantilley

[junkofdavid2]

"Thai economics" said as a stupidity is shared with Japanese too.

Japan has the world's second largest economy because we are so stupid.

The intelligence level (or should I say "arrogance level") of people change a lot after being "up there" for some time...

[Phil Conners]

Do they have a lot of sexy puyings in Discovery Bay?