Cost Of Land In Silom

[PattayaParent]

I read an article yesterday that said the cost of land in Silom is US$5,000 per square metre and was wondering if anyone can confirm whether that is accurate or not?

Edit: typo

Edited June 29, 2008 by PattayaParent

[trajan]

if you are talking about a commercially (hotel, office, condo, etc.) useable plot of land right on Silom Road and closer to Rama IV end? probably a bit more expensive in my wild guessimate....

the parcel of land sold by the British Embassy on Ploenchit Rd was reportedly to come close to B1 million per square wah (4 square meters)....so very roughly USD7,500 a sq meter?....

[Boater]

you are looking at around 350 Million THB a Rai, if directly on the road

[PattayaParent]

So $7,500 is the highest bid so far?

The reason I'm asking is that the article was comparing land prices in Bangkok and Ho Chi Minh City which it states is $15,000 per square metre.

I would have thought Bangkok would be more expensive as it's already built up and therefore less available?

[thaihome]

Did the article mention if the land in Bangkok being compared was freehold or not? A lot of land in the Silom/Sathorn area is owned by CPB and is not freehold which makes it appear much cheaper.

TH

[rak sa_ngop]

[quote name='PattayaParent' date='2008-06-30 10:25:23' post='2060601'r?

I would have thought Bangkok would be more expensive as it's already built up and therefore less available?

When I lived in Hanoi several years ago house and land prices were going crazy. Worked out more expensive than London.

Vietnamese towns and villages are very densely inhabited, the 'community based' system of living was there long before the communists took over. Whereas if you take the skytrain in Bangkok it seems that many upper floors of buildings are uninhabited or derelict.

Vietnamese cities have big parking problems, not just for cars but especially for motorbikes. Bangkok to me feels quite spacious in comparison.

[PattayaParent]

Know what you mean about the f@cking motorcy parking! Having to walk in the road 'cos the pavement is full of the dam_n things and when it's raining they're parked in the bloody shops!!

I like to try and play dominoes with them but the missus always stops me.

[quiksilva]

The current market value of freehold land on Silom is in the region of THB 600-700,000 per sq wah. This is more like 5300 USD / sqm.

Trjan is correct the British Embassy site sold for 900K / sq wah and more recently a 7 Rai site near it (next to Wave Place) sold for THB 1.2million per sq wah

If you can find sites in this location cheaper, let me know!

[PattayaParent]

I was hoping you'd reply Quicksilva as I know from previous threads that you're in the business.

So what I'd read taht prices in HCMC are double Bangkok (if their HCMC prices were accurate).

Any idea why that would be?

[quiksilva]

Sure there's less real estate in HCMC. Its a much smaller city.

There are fewer condo's, offices, shops, factories, warehouses and a smaller population. Their recent growth spurt led to an increase in demand and thus a rise in prices.

This does not necessarily equate to a good long term play however. As the work force become wealthier and they stop using motorcycles and start buying cars the place will crawl to a stop. Infrastructure there is still a joke.

Vietnam is IMHO still 10-15+ years behind Thailand, until recently it was growing fast (too fast) but the recent crisis thats started to unravel show that its still going through the teething stages of economic development that all emerging markets face.

Lets face it, no country on earth has been able to develop without going through the boom bust cycle, and Vietnam's has just encountered its first of many to come. So yes property prices are higher but there's not a lot of it about.

Also valuation standards in Vietnam are very sketchy. In fact we are often called upon to do valuations in Vietnam from Thailand as clients seek more professional advice. One client told us how they had been advised that land values in Vietnam were linked to gold prices!! (How on earth that works god only knows!)

[PattayaParent]

You're correc that there's less 'real estate' in HCMC in terms of buildings, but there's vast tracts of empty land available to build on.

Land is often sold based on weight of gold rather than currency. Nobody wants loads of Dong. Otherwise it's priced in US$.

[quiksilva]

How on earth do they link land values with gold value?

I just don't understand it. They are not even remotely alike. It is the only market in the world, that I know of, that values land in this manner. Truly bizarre!

So for this reason alone, I have never had any faith in Vietnam's so called amazing real estate pricing. Its all based on this nonsensical assumption that land value = gold value.

Vietnam's real estate market has a lot of growing up to do. I for one wouldn't touch it with a blunt barge pole, for fear of popping it!

[PattayaParent]

Wasn't there a 'gold standard' in US and GBP currency until the early 1920's?

Whereby the currency was backed with gold so that you could actually go to a bank and give them a $ bill and recceive the equivalent amount of gold for it.

It's exactly the same in VN where they don't want Dong but would rather have gold, or these days US$.

[quiksilva]

Currency being backed by gold is one thing but land values is quite another.

In essence land should only ever be valued by the amount of income it can generate through rental income or development, or on a comparable sales basis.

I could go on at length on this subject but lets leave it at that for now rather than me bore people with the technicalities of property appraisal techniques which I have done once or twice here before.

Lets just leave it with the fact that Vietnam's real estate values are linked to gold prices, which bear no relation whatsoever with the performance of the real estate market, and only the Vietnamese know why (and perhaps not even them).