The Property Market

[quiksilva]

Yes - it's so refreshing to see someone put the peg in its hole for a change (xbusman). I'm so sick of the excuses and conjecture on this site (and others) about why Thailand is a different (TIT), and how we have to factor all these others things in like culture, mai pen rai, blah, blah, bla - whetehr talking about the property market the or business culture, life in general, etc, etc..

Too many people have lived here for too long - or not long enough - and have lost their grip on common sense and reality. I guess it's denial or selective rationale - whatever.

This is the wild west. There is no rule of law and so you have no protection. Thais are nice people - no doubt -but as foreigners, particularly Westerners, we are over-exposed to rip-offs and temptations that we simply wouldn't encounter in our own homelands.

Sure you can buy an overpriced condo - but maybe you can live in it and maybe you can't. The visa rules keep changing. All the sales pitches and infiniti pools in the world can't change that.

Our stay here is temporary - the only thing at issue is 'how' temporary. I also agree that most people are over-confident in how safe Bangkok and Thailand in general is. Again - exposed and in denial.

Lotus-landers..

I think its only prudent to have a healthy degree of skepticism, but it should be tempered with moderation. Every market has its pitfalls, there is perhaps more risk here because the Thai market is more opaque than most (but not all).

Its not all doom and gloom though, there are bright spots, it is possible to make money in this market, but like anywhere it is equally possible to lose money too. You just need to do your homework.

This is nothing to do with giving Thailand any special considerations, its the basic principals of real estate best practice that should be applied whenever you embark on any real estate venture (be it leasing, buying, or selling), anywhere in the world.

For instance you would never forgo a title search when conveyancing in the UK, so why overlook that important aspect here? Yet many do.

[alive555]

Yes - it's so refreshing to see someone put the peg in its hole for a change (xbusman). I'm so sick of the excuses and conjecture on this site (and others) about why Thailand is a different (TIT), and how we have to factor all these others things in like culture, mai pen rai, blah, blah, bla - whetehr talking about the property market the or business culture, life in general, etc, etc..

Too many people have lived here for too long - or not long enough - and have lost their grip on common sense and reality. I guess it's denial or selective rationale - whatever.

This is the wild west. There is no rule of law and so you have no protection. Thais are nice people - no doubt -but as foreigners, particularly Westerners, we are over-exposed to rip-offs and temptations that we simply wouldn't encounter in our own homelands.

Sure you can buy an overpriced condo - but maybe you can live in it and maybe you can't. The visa rules keep changing. All the sales pitches and infiniti pools in the world can't change that.

Our stay here is temporary - the only thing at issue is 'how' temporary. I also agree that most people are over-confident in how safe Bangkok and Thailand in general is. Again - exposed and in denial.

Lotus-landers..

I think its only prudent to have a healthy degree of skepticism, but it should be tempered with moderation. Every market has its pitfalls, there is perhaps more risk here because the Thai market is more opaque than most (but not all).

Its not all doom and gloom though, there are bright spots, it is possible to make money in this market, but like anywhere it is equally possible to lose money too. You just need to do your homework.

This is nothing to do with giving Thailand any special considerations, its the basic principals of real estate best practice that should be applied whenever you embark on any real estate venture (be it leasing, buying, or selling), anywhere in the world.

For instance you would never forgo a title search when conveyancing in the UK, so why overlook that important aspect here? Yet many do.

thats a good point cause like stock market investing everyone thinks they know all about propert market investing when generally speaking they have (1) insufficient knowledge of how the markets work generally, (2) a lack of local market information and experience, (3) what to look out for, and (4) how to go about identifying real opportunities.

One way round that is to seek professional advise. That costs money and in my experience 99% of people are not prepared to pay for it.

[xbusman]

Quicksilva, your posts are reasoned and nicely balanced, thanks for chiming in.

[thaigene2]

You just need to do your homework.

This is nothing to do with giving Thailand any special considerations, its the basic principals of real estate best practice that should be applied whenever you embark on any real estate venture (be it leasing, buying, or selling), anywhere in the world.

For instance you would never forgo a title search when conveyancing in the UK, so why overlook that important aspect here? Yet many do.

Yes very true - but here in Thailand it just seems to be harder to carry out these functions with any degree of certainty that those working for you (lawyers, etc) are capable to do the job. I've used one of the main companies that advertizes here - and was quite impressed with the guy (thai) who handled my file. But others have pretty bad stories - now we could all say they weren't careful or intelligent enough. But you know, if you're not too clued in on thse things you pay someone to do them - and expect reasonable results in lien searches, title searches, etc - but still many of the reports you see here are quite the contrary..

It is, as I said, the Wild West - and you better have your wits about you, or you're going to get burned.

[quiksilva]

Yes I see that, I guess it all boils down to getting good quality advice. Sometimes that means paying more, sometimes not, but in the long run it tends to be worth it.

[chiangmaibruce]

Very very interesting thread with some very informative and insightful contributors. I have just read it from start to finish. I would like to clarify one thing.

I am from Australia where there is a wealth of statistics, reports, data available (incl. government, private/consultant, academic sources) on most types of investments including property.

In this thread people tend to be saying on the one hand that you need to do your research and see what the figures say, but on the other hand "there is no information"... other than what agents/developers are saying. Is this really correct? Are there no (even half decent) publically available info sources or databases about what is (or has been) going on in the Thai property market? If anyone knows of any such sources then I would be interested to get details...

Thanks

- CB

[thaigene2]

Very very interesting thread with some very informative and insightful contributors. I have just read it from start to finish. I would like to clarify one thing.

I am from Australia where there is a wealth of statistics, reports, data available (incl. government, private/consultant, academic sources) on most types of investments including property.

In this thread people tend to be saying on the one hand that you need to do your research and see what the figures say, but on the other hand "there is no information"... other than what agents/developers are saying. Is this really correct? Are there no (even half decent) publically available info sources or databases about what is (or has been) going on in the Thai property market? If anyone knows of any such sources then I would be interested to get details...

Thanks

- CB

There may be for Commercial real estate but not Residential - at least not that I'm aware. Maybe therein lies a little golden business opportunity? WOuld it be possible to set up a western-style valuation business for residential purchasers? You hire a couple of Thais in each major destination (Bangkok, Hua Hin, Samui and Phuket - maybe Chiang Mai) to be full-time data-gatherers at the Land Title Office. Then you build databases starting with a baseline some six months or a eyar earlier (labor intensive I know), then you would have the makings of the system used in US/Canada. A service worth paying for I reckon.

[quiksilva]

Residential valuations are in fact already offered by many of Thailand's leading valuation firms.

[chiangmaibruce]

Noted thanks, but what I was really getting at was more 'big picture' data -what is happening at the regional and national level. Interested in the overall situation, but even just information concerning real estate purchases and sales by non-Thai nationals would be useful. Anyone?

[thaigene2]

Residential valuations are in fact already offered by many of Thailand's leading valuation firms.

Sure. But what are they based on? What I'm suggesting above is a quantifiable database year-to-date of any given area in the main destinations. Asking prices, and most importantly Purchase prices, by muang, by mubaan, by soi, by sub-soi..Not a comparison of 'asking prices'.

[ray08]

Residential valuations are in fact already offered by many of Thailand's leading valuation firms.

Based on what type of sale? Thai to Thai , Thai to Alien , Alien to Alien , Alien to Thai , Company to Company , all these effect the value , on top of this from my experince even in developed nation the valuer can be out 10-20% , in fact when a property is sold they all want to see contract price before they value a property ,

I would be very wary of any valuation by "Thailands leading Valuation Firms" as there are just too many variations in the data to get a result that is near enougth to the mark of the value of a property , which also includes , ease of sale , future growth , etc etc

[quiksilva]

Says who?

Thailand's leading valuation practices use standards recommended by the Royal Institution of Chartered Surveyors, the world's leading authority on valuations and should comply with International Accounting Standards(IAS).

Yes there are many variables to take into account, and professional valuers consider all these points and much, much more, (including planning, existing and future infrastructure projects, rental growth, macroeconomics, local market variables, building condition, etc).

It is possible for a valuer to determine the value of a property to the satisfaction of the world's largest financial institutions and investors, by following the approaches outlined in the RICS red book, and a minimum of BSc in Valuation Surveying (or equivalent) together with several years of training under a qualified mentor.

As for the database that you speak of TG, it is accessible from the very computer that I am entering this post on, and yes it has records of all types of sale (and leases) for all types of property, throughout the Kingdom and beyond!

[chiangmaibruce]

Hi Quiksilva, back to my original question .... is the database you are accessing available to the public via the net? or elsewhere? free or by subscription? details would be appreciated. Thanks

[jitagon]

Well it's been a while now since I started this topic, which has veered hither and thither, but here on Phuket, in an area largely dominated by and targeted at ex-pats, the same properties are still not moving, even the smaller 5 mil ones which weren't doing as badly as the rest this time last year.

A friend of mine has just sold his land, in a beach location, back to the original owner, another farang, at a reduced price, after being on the market for almost a year.

A close neighbour has had their property up for rent for two months, in an excellent location, and it's still empty.

I do believe all the talking up of prices by the various builders and real estate agents, together with the political situation here and the subprime from would be buyers is having a very negative effect and most people aren't willing/able to spend money on real estate here. Good. Can hear a pin drop down my soi

[nothingleftbutfaith]

Well it's been a while now since I started this topic, which has veered hither and thither, but here on Phuket, in an area largely dominated by and targeted at ex-pats, the same properties are still not moving, even the smaller 5 mil ones which weren't doing as badly as the rest this time last year.

A friend of mine has just sold his land, in a beach location, back to the original owner, another farang, at a reduced price, after being on the market for almost a year.

A close neighbour has had their property up for rent for two months, in an excellent location, and it's still empty.

I do believe all the talking up of prices by the various builders and real estate agents, together with the political situation here and the subprime from would be buyers is having a very negative effect and most people aren't willing/able to spend money on real estate here. Good. Can hear a pin drop down my soi

The market here is bogus.

[Khun Jean]

Maybe the location is not excellent. An excellent location would have people waiting to rent or buy.

The property market is like any market, if you buy fish or a house whatever. Someone asks a price and someone offers a price.

If both parties agree you have a sale. Not that difficult.

Prices can be in a very wide range. I know some land snapped up by some bangkokians for 50.000 baht per rai, just 2 years ago. Now they want 5.000.000 baht per rai (French riviera syndrome). This just means they not really want to sell but keep it or are convinced they bought in a place that will be booming very soon. But if you are crazy enough to pay it then yeah why not, don't have to wait for the boom that way.

Even among thais they sometimes say 'Die three times over before can sell', meaning the price is way to high, but again it means they don't want to sell. Unless it is like winning the lotery.

I 'evaluate' my own way. If it is for property i want to rent out it should be cheaper than 100 times the moenthly rent. If not, not interesting buy something else that can make that roi.

If it is for somewhere i want to live and i see myself getting old there, i might pay a bit more that reasonable because i want it.

So there you have my evaluation.

[donx]

A friend of mine has just sold his land, in a beach location, back to the original owner, another farang, at a reduced price, after being on the market for almost a year.

You say the friend sold the land back to the original owner at a reduced price. A reduced price from what he was asking or was it a reduced price from what he bought it originally? Correct me if I'm wrong but it sounds like your friend sold the land back to the original owner for a profit, just not as large a profit as he hoped he would have. Or are you saying that your friend sold the property for less than he bought it?

If he made a profit, then he was asking too much for the land and this is why nobody bought the land. The original owner knows the true value of the land and I'm sure he paid the market price to get it back.

If he lost money then I would be much more interested in further details as this would definitely indicate that prices are falling. If prices are falling for beach locations on Phuket, please let me know because I would be very interested in any reasonably priced land of this type.

Unfortunately, I doubt there are really any reasonably priced beach locations on Phuket. To me, prices there are way over priced.

[ray08]

Says who?

Thailand's leading valuation practices use standards recommended by the Royal Institution of Chartered Surveyors, the world's leading authority on valuations and should comply with International Accounting Standards(IAS).

Yes there are many variables to take into account, and professional valuers consider all these points and much, much more, (including planning, existing and future infrastructure projects, rental growth, macroeconomics, local market variables, building condition, etc).

It is possible for a valuer to determine the value of a property to the satisfaction of the world's largest financial institutions and investors, by following the approaches outlined in the RICS red book, and a minimum of BSc in Valuation Surveying (or equivalent) together with several years of training under a qualified mentor.

As for the database that you speak of TG, it is accessible from the very computer that I am entering this post on, and yes it has records of all types of sale (and leases) for all types of property, throughout the Kingdom and beyond!

I was under the impression that it was very hard to get recent sale prices on residential property in Thailand , which is an important part of the valution,the comparison of recent sales from similar properties.

that being the case i stand corrected ,

[otherstuff1957]

Someone who reads Thai better than I do might be able to find some useful information here:

- deleted -

I just realized that that link is to a company, not the gov.

Edited April 5, 2008 by otherstuff1957

[Misty]

Hi CB,

There's some free information on the Bank of Thailand's website, under the database section. It's pretty broad-brush, but may give you some ideas of trends in areas such as housing prices.

You could also try the Agency for Real Estate Affairs http://www.area.co.th/ I used to use information from this group many years ago--it provided good quality detailed data back then. Haven't been an AREA subscriber recently, but I see it now offers English language content--should be a plus.

You could also try contacting a property consulting firm such as CB Richard Ellis.

Cheers, Misty

Very very interesting thread with some very informative and insightful contributors. I have just read it from start to finish. I would like to clarify one thing.

I am from Australia where there is a wealth of statistics, reports, data available (incl. government, private/consultant, academic sources) on most types of investments including property.

In this thread people tend to be saying on the one hand that you need to do your research and see what the figures say, but on the other hand "there is no information"... other than what agents/developers are saying. Is this really correct? Are there no (even half decent) publically available info sources or databases about what is (or has been) going on in the Thai property market? If anyone knows of any such sources then I would be interested to get details...

Thanks

- CB

[KondoKitty]

My second question is that anyone know where to find data for actual sales prices (ie. Baht/m2) in various projects? Would be nice to know. Asking price rarely is the final price paid i believe...

which projects; i have some research for some of the higher end ones.

As far as new vs. second hand, it is easier to borrow on a new property than second hand. So...people buy new.

The two areas doing well are:

- low cost afordable housing e.g. LPN

- extremely high end - higher than the river, Sukhothai type level

the middle upper section is rather tough.

Both the above two there are viable markets and in the case of super luxury, there are very few sites that are truly luxurious (and the RIver is not one of them).

1. Just wondering why The River is NOT considered "truly luxurious"?

2. What other properties are "extremely high end" and how do prices compare with The River?

Thanks, KondoKitty

[quiksilva]

Says who?

Thailand's leading valuation practices use standards recommended by the Royal Institution of Chartered Surveyors, the world's leading authority on valuations and should comply with International Accounting Standards(IAS).

Yes there are many variables to take into account, and professional valuers consider all these points and much, much more, (including planning, existing and future infrastructure projects, rental growth, macroeconomics, local market variables, building condition, etc).

It is possible for a valuer to determine the value of a property to the satisfaction of the world's largest financial institutions and investors, by following the approaches outlined in the RICS red book, and a minimum of BSc in Valuation Surveying (or equivalent) together with several years of training under a qualified mentor.

As for the database that you speak of TG, it is accessible from the very computer that I am entering this post on, and yes it has records of all types of sale (and leases) for all types of property, throughout the Kingdom and beyond!

I was under the impression that it was very hard to get recent sale prices on residential property in Thailand , which is an important part of the valuation,the comparison of recent sales from similar properties.

that being the case i stand corrected ,

Well you are not entirely incorrect Ray, it is just harder for us to do our job in this market. However, that doesn't always prevent from getting the required information but it is not easy and can be very time consuming.

I'm sorry to say that scarcity of information is also the reason the db is not made available to the public, CB, but we do provide free research reports on all sectors, that are available for download online.

[thaigene2]

Well, I'm certainly not trying to take work away from you quiksilva, but why not market it as I suggested above? You'd make a killing! (give me a commission ok?). But to say it's difficult to get sounds like it can't actually be done with any degree of certainty like it's done in the West. e.g. not just 'offer' prices but sale prices too - yes I know people under-declare sale prices and that's a big complication..that's why I said until there is a real database the rest is unusable..really.

[Naam]

make sure ur shanuk is in order

what if i don't have a shanuk?

[onlooker]

He means a 'Canuk'.