Property Price Increases

[chiang mai]

The case can be argued that it's not a good time right now to make a capital investment in Thailand in something such as real estate, based on who you speak with. Agents and Brokers have a positive view whilst farang investors have an opposite view, not surprising really!

Interesting though that of the five farangs I have spoken with in the the past four weeks (I'm looking to buy property/land currently), all have upped their sale price for houses/land based on currency movements. Virtually all of those I have spoken with had bought property here three or four years ago and are basing their sales current sale price on the return expected at the current current foreign currency sell rate. OK, that's what investors and speculators do so fair game I suppose.

I wonder what the effect of farangs selling real estate in Thailand will have on the overall economy (and there seems to be a large number of them currently), the effect it will have on inflation in Thailand and the impact it will have on middle and poorer class Thai's. My guess is that it will all be very negative.

[backflip]

"I wonder what the effect of farangs selling real estate in Thailand will have on the overall economy (and there seems to be a large number of them currently)..."

It seems that way, only because of your myopic view of the situation. The only people you've talked with are farangs, and "therefore farangs are causing the problem". Very few farangs own land (either directly, or through a company).

[GuestHouse]

"I wonder what the effect of farangs selling real estate in Thailand will have on the overall economy (and there seems to be a large number of them currently)..."

The trick right now is actually selling property.

As for the impact of Farangs selling property, I suspect it is negligible compared with the impact of Farangs buying property in Thailand - The reason being that the vast amount of farangs who bring money into Thailand to buy property, never get to take the money back out again.

A significant number get little, if any use of the property they have bought.

Something to remember when you are making your inverstment in a Thai property - It's only an investment if you can get the money back out again later.

Edited February 26, 2008 by GuestHouse

[zorro1]

"I wonder what the effect of farangs selling real estate in Thailand will have on the overall economy (and there seems to be a large number of them currently)..."

The trick right now is actually selling property.

As for the impact of Farangs selling property, I suspect it is negligible compared with the impact of Farangs buying property in Thailand - The reason being that the vast amount of farangs who bring money into Thailand to buy property, never get to take the money back out again.

A significant number get little, if any use of the property they have bought.

Something to remember when you are making your inverstment in a Thai property - It's only an investment if you can get the money back out again later.

uurrm if farangs are buying then someone is selling right? as you just stated, so how are they not taking their money out again and how do you know how much use they get from their " inverstment in a Thai property "

[manjara]

"I wonder what the effect of farangs selling real estate in Thailand will have on the overall economy (and there seems to be a large number of them currently)..."

The trick right now is actually selling property.

As for the impact of Farangs selling property, I suspect it is negligible compared with the impact of Farangs buying property in Thailand - The reason being that the vast amount of farangs who bring money into Thailand to buy property, never get to take the money back out again.

A significant number get little, if any use of the property they have bought.

Something to remember when you are making your inverstment in a Thai property - It's only an investment if you can get the money back out again later.

uurrm if farangs are buying then someone is selling right? as you just stated, so how are they not taking their money out again and how do you know how much use they get from their " inverstment in a Thai property "

My wife was speaking to a Thai condo salesperson in Thonglor the other day. They confided that they had only sold 1 apartment to a Thai in the last 2 months, almost all sales were to Foreign buyers. The prices ranged from 85-110,000 baht/sqm

I was surprised that so many foreigners were still buying...

[zorro1]

"I wonder what the effect of farangs selling real estate in Thailand will have on the overall economy (and there seems to be a large number of them currently)..."

The trick right now is actually selling property.

As for the impact of Farangs selling property, I suspect it is negligible compared with the impact of Farangs buying property in Thailand - The reason being that the vast amount of farangs who bring money into Thailand to buy property, never get to take the money back out again.

A significant number get little, if any use of the property they have bought.

Something to remember when you are making your inverstment in a Thai property - It's only an investment if you can get the money back out again later.

uurrm if farangs are buying then someone is selling right? as you just stated, so how are they not taking their money out again and how do you know how much use they get from their " inverstment in a Thai property "

My wife was speaking to a Thai condo salesperson in Thonglor the other day. They confided that they had only sold 1 apartment to a Thai in the last 2 months, almost all sales were to Foreign buyers. The prices ranged from 85-110,000 baht/sqm

I was surprised that so many foreigners were still buying...

My New condo where I live in central suhk BKK is 70 % Thai owned and I actually live there so can guarantee that. I think there is so much hear say in regards to property facts here that it totally distorts reality

[LivinLOS]

"I wonder what the effect of farangs selling real estate in Thailand will have on the overall economy (and there seems to be a large number of them currently)..."

The trick right now is actually selling property.

As for the impact of Farangs selling property, I suspect it is negligible compared with the impact of Farangs buying property in Thailand - The reason being that the vast amount of farangs who bring money into Thailand to buy property, never get to take the money back out again.

A significant number get little, if any use of the property they have bought.

Something to remember when you are making your inverstment in a Thai property - It's only an investment if you can get the money back out again later.

uurrm if farangs are buying then someone is selling right? as you just stated, so how are they not taking their money out again and how do you know how much use they get from their " inverstment in a Thai property "

Erm because Thais are selling..

I think if you looked at the ratio between farangs putting money into Thailand v farangs sending money out of Thailand you would see a vast difference ?? Do you not agree ?? If you do then what creates that vast difference ?? Because cost of living is a tiny slice of what many are sending in via property 'investments'

[chiang mai]

All well and good but the question I am trying to ask here has to do with price inflation caused by farangs selling their real estate investments and factoring in a lower exchange rate back to their home currency. Case in point, I spoke with an American last week who had advertised his house for sale at the baht equivalent of $USD212,000. He'd had no potential buyers in over a year and then I come along - the first words out of his mouth were, the price has now increased to $230,000 because of the fall in the USD. OK so the guy wants his money back but the effect of that is to push real estate prices even higher. I see large numbers of farangs selling real estate currently (or trying to) and lots of questions being raised on this board about how repatriate funds. So it seems to me that if farangs are complaining about the higher price of property in Thailand they should also understand that it the farang sector in part that is causing this to happen.

[GuestHouse]

Farangs making money on selling property and then taking the money out of Thailand there might be - but how many?

I'm going to call habeas corpus on this and ask for evidence.

I say the actuallity is money flooding in from overseas and a slow trickle out.

Guys asking more for their property and then actually selling their property - Again show me the body.

Edited February 26, 2008 by GuestHouse

[LivinLOS]

Real estate sales are only made when buyer and seller agree.. Just because someone asks for a price doesnt mean he will get it. I think the actual resale market, especially the farangs reselling is a very very small % of the total market.

I will say however Thailand is one country where pricing seems to have face issues. Thais it seem price not on an ability to sell the land but by using a comparable plots 'claimed' selling price.. Selling for anything substantially less (appears to me) causes some less of face as though they couldnt get the deal or thier land was not as good.. Hence they often claim land sells for a FAR FAR higher price than actual cash changes hands, this in turn is the new base price that everyone selling around immediately moves up to plus a little more for face..

So that even without hardly any plots changing hands, and very little actual trade done they keep upping the price each few months, based on heresay of what other people got, or keeping up with the jones's.. A cycle of inflation without any real normal supply and demand dynamics.

Similarly farangs get caught up in this too.. I looked at a home for sale 3 or 4 years ago for 12m asking (probably 10m purchase ??).. Since then I have seen the house price go to 15m asking and most recently 18m asking.. I heard through the grapevine the seller REALLY now wants to shift it and would accept 10m cash for a quick sale yet he has it on the market at 18 !!! Why ?? I have another mate with a house which appears to be at a very good market price yet its been on the market for >3 years now, and thats in a really busy ideal location. Basically the resale market here seems very tough and I take all claimed prices as being numbers plucked from air. People seem to buy new builds and people then price to new developments, I just watched 4 pool homes get snapped up from the off plan stage for +-10m while a resale home with potential to expand and add a pool sits close by unsold for 4 - 5m ?? Its a strange market.

[chiang mai]

Farangs making money on selling property and then taking the money out of Thailand there might be - but how many?

I'm going to call habeas corpus on this and ask for evidence.

I say the actuallity is money flooding in from overseas and a slow trickle out.

Guys asking more for their property and then actually selling their property - Again show me the body.

The evidence is of course mostly anecdotal - an obvious surge in posts on this forum of people inquiring about how to repatriate funds and the people I have met and spoken to in the past couple of weeks. I'm currently looking for property in Phuket and spend a few days each week looking and talking to sellers and to agents and the number of price increases is noticeable. Now whether or not those people sell is another matter and there are of course no firm stats to show trends in this respect. But real estate doesn't have to sell at the higher price for the inflationary effects to be felt by new buyers. As was stated elsewhere in this thread, once one person raises their price, others soon join suit. In Phuket I would suggest the market is driven by foreign buyers and if the, granted, meager evidence thus far is anything to go by, I believe we will soon see across the board increases to compensate for the currency loss. The actual selling price, well that I think is a totally different subject.

[tingtong]

" I believe we will soon see across the board increases to compensate for the currency loss"

I would think the foreigners selling now rather make a currency gain than loss...at least if they bought the last 6-7 years till date. The baht did only got sronger in this time, at least to $

[LivinLOS]

Exactly.. And those same buyers would have less money to spend as they are the ones bringing in the overseas currency.

Seems the OP has taken one example of a guy pricing in USD who changed the USD prices, probably keeping the baht prices the same ??

[chiang mai]

Exactly.. And those same buyers would have less money to spend as they are the ones bringing in the overseas currency.

Seems the OP has taken one example of a guy pricing in USD who changed the USD prices, probably keeping the baht prices the same ??

Exactly, and unfortunately I've seen five different such examples in two weeks.

[LivinLOS]

So what your saying is peoples local price has remained unchanged ??

Even if peoples prices are rising (as they have been) I fail to understand your currency argument at all. The baht has risen, so farang investors have had more return on thier baht inputs not less ?!?!

[chiang mai]

So what your saying is peoples local price has remained unchanged ??

Even if peoples prices are rising (as they have been) I fail to understand your currency argument at all. The baht has risen, so farang investors have had more return on thier baht inputs not less ?!?!

Er, I'll get back to you on that! And it all seemed so perfectly clear, just a few days ago - I really must change my diet and get more exercise!