Property Is It Time To Buy Yet ?

[bojo]

Bargains are only relative to prices we are used to.

Who says we're at the bottom right now or even near it.

Personally I think we're along way off and I'd wait before any real signs kick in and I've yet to any signs even near convincing. Don't believe the spin

Regards Bojo

[zorro1]

There are good bargains to be had and i think the thai people know much more than some of these farang rip off merchants,oops i mean agents.

I'm driving down a rather busy soi the other day in Pattaya. My TG points out a pretty large Thai apartment building that I would guess would sell for no less than 3.5 - 4m. It was nice size, good shape. She tells me that the place she eats (out front), the owner was eating a few weeks ago talking about this or that problem and she needed money ASAP. She was willing to sell this building for 1.5m but she needed the sale quick or she had "big problem" says my TG. The next day the neighbor bought it from her.

My TG is telling me this and I asked her, "baby... for 1.5 for such a large unit that is already full of tenants, why on earth did you not tell me about this?" Her reply, "I think you no want Thai apartment."

The Thai who bought this got a deal. This was at least a 3.5 - 4m baht building.

So yes, I agree, deals are to be had EVERYWHERE, you just have to know how to look and who to talk to. As the economic problems get worse, you will find more and more Thais (and falang) who are in a spot and need to ditch an asset or two.

"I'm driving down a rather busy soi the other day in Pattaya. My TG points out a pretty large Thai apartment building that I would guess would sell for no less than 3.5 - 4m. It was nice size", "This was at least a 3.5 - 4m baht building."

Tokay you did this above "valuation" without even exiting your car? LOL Mate if it went for 1.5 it worth 1.5 that's its valuation. I certainly wouldn't listen to hearsay especially from Thai girls they have a tendency to skewer the facts a little . If they were everywhere as you say then how come you haven't bought one?

Edited August 2, 2009 by zorro1

[StatlerandWaldorf]

We have watched the property market closely for the last 3 years,prices have rocketed to rediculous amounts especially with the baht being so strong against the pound and the dollar.

We currently rent but this cannot go on for ever surely all the properties that are for sale must start to bring the prices down ?

Be warned that if you are planning to buy a house to ensure that you can live there for the rest of your natural, because it is extremely difficult to sell houses, depending on the price range of course. Townhouses in the 1 - 2 million range you can probably shift without any problems but if you have a detached house of 4 million upwards it is not easy. Cars seem to hold their prices better then property in Thailand.

[trogers]

Bargains are only relative to prices we are used to.

Who says we're at the bottom right now or even near it.

Personally I think we're along way off and I'd wait before any real signs kick in and I've yet to any signs even near convincing. Don't believe the spin

Regards Bojo

You reminded me of a guy who would not leave his easy armchair when the building's fire alarm rings. He would keep touching the floor to see if it is warm before fleeing the building.

[zorro1]

There are good bargains to be had and i think the thai people know much more than some of these farang rip off merchants,oops i mean agents.

She was willing to sell this building for 1.5m but she needed the sale quick or she had "big problem" says my TG.

My TG is telling me this and I asked her, "baby... for 1.5 for such a large unit that is already full of tenants, why on earth did you not tell me about this?" Her reply, "I think you no want Thai apartment."

The Thai who bought this got a deal. This was at least a 3.5 - 4m baht building.

Just re read your post and possibly one the poorest quality on TV I have ever read when it comes to bringing useful info to the table. Just read what you posted ,my TG this my TG that. Is that your research? A Thai selling their condo for up to 70% off your drive by valuation? where do you posters come from? You cant get 70% off a pair of fake cotton socks at Mikes mall

[Abrak]

We also use calculations of per capita income related to average housing to keep an eye on bubble markets. I have seen the same in economic analysis as well so its not all that uncommon. That would seem to indicate that the real estate market here is extremely over priced but those calculations might be difficult in a country with such a wide disparity between the rich and poor. I have read somewhere that Thailand has about the widest disparity in the world, but I am not sure if that is true or not, it seems to be.

Best to keep with ROI calculations to determine if your spare change is worth investing here.

There are a number of reasons for believing this statement re housing and income is not true. First of all housing assets are only about 100% of GDP.

http://www.bot.or.th/English/EconomicCondi...4_kiatipong.pdf

In the US mortgage debt alone is equal to GDP and total housing assets are obviously considerably higher. The size of household in Thailand which at 3.9 is about 50% above the US which explains quite a lot. Obviously the average house is a lot lower in terms of build compared to the US too. The inequality of wealth and low home ownership explains a lot. In the US the top 10% own approximately 66% of total assets but their proportion of housing is a lot lower because most people own homes, so there is not a lot of room to buy and rent out. The opposite is true of a place like Thailand.

Household income in Bangkok is about Bt40,000 per month (3.9 people per household) about double what it is in the provinces. In the UK average household income is GBP33,ooo a year and a UK average house about GBP152,ooo. On that basis the average BKK property should be over Bt2m and the average outside of bangkok Bt1m while I suspect prices are actually fat lower.

The one reason to think that property might actually be undervalued is the incredibly low level of mortgage debt which is only 18% of GDP compared to around 100% in the UK and US.

[trogers]

If you are to include the sub-prime fiasco, level of mortgage debt in the US may be 200%.

[robert10]

On that basis the average BKK property should be over Bt2m and the average outside of bangkok Bt1m while I suspect prices are actually fat lower.

The one reason to think that property might actually be undervalued is the incredibly low level of mortgage debt which is only 18% of GDP compared to around 100% in the UK and US.

At average price of BT2m, then the avg psm price is about 25k-33k psm (assuming avg size of 60-80sq m). Current prices are easily a few times that.

[trogers]

On that basis the average BKK property should be over Bt2m and the average outside of bangkok Bt1m while I suspect prices are actually fat lower.

The one reason to think that property might actually be undervalued is the incredibly low level of mortgage debt which is only 18% of GDP compared to around 100% in the UK and US.

At average price of BT2m, then the avg psm price is about 25k-33k psm (assuming avg size of 60-80sq m). Current prices are easily a few times that.

Two of my condo units bought in Sep and Nov of last year are about Bt35k/m2. Only thing is, they were completed in 1996 and located near BTS Prakhanong

Prices took a leap up during 2006 is due to the asset inflation effect on land prices in the inner city, and new building requirements of BMA earthquake allowance and EIA requirements.

[trogers]

On that basis the average BKK property should be over Bt2m and the average outside of bangkok Bt1m while I suspect prices are actually fat lower.

The one reason to think that property might actually be undervalued is the incredibly low level of mortgage debt which is only 18% of GDP compared to around 100% in the UK and US.

At average price of BT2m, then the avg psm price is about 25k-33k psm (assuming avg size of 60-80sq m). Current prices are easily a few times that.

Two of my condo units bought in Sep and Nov of last year are about Bt35k/m2. Only thing is, they were completed in 1996 and located near BTS Prakhanong

Prices took a leap up during 2006 is due to the asset inflation effect on land prices in the inner city, and new building requirements of BMA earthquake allowance and EIA requirements.

As an example of increase cost of construction that most condo buyers are not aware of, EIA rules make an assumption that a one bedroom unit of 40-48m2 will be occupied by 5 people. Thus sizing of water and waste treatment pipes and tanks are almost double.

Edited August 3, 2009 by trogers

[bojo]

Bargains are only relative to prices we are used to.

Who says we're at the bottom right now or even near it.

Personally I think we're along way off and I'd wait before any real signs kick in and I've yet to any signs even near convincing. Don't believe the spin

Regards Bojo

You reminded me of a guy who would not leave his easy armchair when the building's fire alarm rings. He would keep touching the floor to see if it is warm before fleeing the building.

Just because the fire alarm is ringing, it doesn't mean that the house is on fire.

I remember in the US in July last year real estate agents we're touring clients around foreclosures in coaches. The prospective buyers we're rubbing their hands with glee at the thought of a substantial discount on 2006 prices. They would be rubbing their hands even more if they could wait until end 2009.

I will be holding back before I reinvest, I am certain that if I buy in any foreigner area in Thailand in a minimum of 6 months time, I will pick up better bargains than today. Nobody's buying right now and people still aren't desperate enough. Proof is in the pudding, lets wait and see.

Regards Bojo

[trogers]

Bargains are only relative to prices we are used to.

Who says we're at the bottom right now or even near it.

Personally I think we're along way off and I'd wait before any real signs kick in and I've yet to any signs even near convincing. Don't believe the spin

Regards Bojo

You reminded me of a guy who would not leave his easy armchair when the building's fire alarm rings. He would keep touching the floor to see if it is warm before fleeing the building.

Just because the fire alarm is ringing, it doesn't mean that the house is on fire.

I remember in the US in July last year real estate agents we're touring clients around foreclosures in coaches. The prospective buyers we're rubbing their hands with glee at the thought of a substantial discount on 2006 prices. They would be rubbing their hands even more if they could wait until end 2009.

I will be holding back before I reinvest, I am certain that if I buy in any foreigner area in Thailand in a minimum of 6 months time, I will pick up better bargains than today. Nobody's buying right now and people still aren't desperate enough. Proof is in the pudding, lets wait and see.

Regards Bojo

Just keep in mind that buying real property is not like buying stock. You will need time to look for the unit you think is ideal in terms of location, layout, etc... You could be acquiring a property 1-2 quarters after the market bottoms out.

[midas]

Bargains are only relative to prices we are used to.

Who says we're at the bottom right now or even near it.

Personally I think we're along way off and I'd wait before any real signs kick in and I've yet to any signs even near convincing. Don't believe the spin

Regards Bojo

You reminded me of a guy who would not leave his easy armchair when the building's fire alarm rings. He would keep touching the floor to see if it is warm before fleeing the building.

Just because the fire alarm is ringing, it doesn't mean that the house is on fire.

I remember in the US in July last year real estate agents we're touring clients around foreclosures in coaches. The prospective buyers we're rubbing their hands with glee at the thought of a substantial discount on 2006 prices. They would be rubbing their hands even more if they could wait until end 2009.

I will be holding back before I reinvest, I am certain that if I buy in any foreigner area in Thailand in a minimum of 6 months time, I will pick up better bargains than today. Nobody's buying right now and people still aren't desperate enough. Proof is in the pudding, lets wait and see.

Regards Bojo

Just keep in mind that buying real property is not like buying stock. You will need time to look for the unit you think is ideal in terms of location, layout, etc... You could be acquiring a property 1-2 quarters after the market bottoms out.

trogers please ! do you honestly believe the stuff you are

writing here hhhiiiiissssssss -that is the sound of very slow leaking air

[craigt3365]

every article I have read has indicated we are not at the bottom. Even if we are near, the recovery will be slow relative to previous recessions. So even if you miss it, the up tick won't be that great.

Unemployment is at record levels and won't recover for a long time. Hard for people to buy stuff if they don't have a job....

[zorro1]

every article I have read has indicated we are not at the bottom. Even if we are near, the recovery will be slow relative to previous recessions. So even if you miss it, the up tick won't be that great.

Unemployment is at record levels and won't recover for a long time. Hard for people to buy stuff if they don't have a job....

Craig, I see your point however nothing much is said at the bottom, this can easily go on for another year. However there will be an announcement at some stage with a ridiculous jump attached. Its never a few pips in Housing, it takes time for good news to filter through then you gotta PAY

The press don't have ability to predict the future so they will continue down the only path they know which by the way has swung north again. News week front cover lat week?

Edited August 3, 2009 by zorro1

[quiksilva]

every article I have read has indicated we are not at the bottom. Even if we are near, the recovery will be slow relative to previous recessions. So even if you miss it, the up tick won't be that great.

Unemployment is at record levels and won't recover for a long time. Hard for people to buy stuff if they don't have a job....

I think that's true for the West, but what about here in Thailand? (Foreigners only make up a small % of total buyers here anyway).

In Thailand, manufacturing seems to be warming up. Hitachi just employed 1000, Mitsubishi Motors just employed another 1000, Western Digital just signed up 5000, Seagate has expanded, and I can report that factories are selling quite well with some firms expanding operations and some being completely new projects here.

So what does that indicate? Surely not a portent of doom?

However, I also think its still too early to say whether we have hit the bottom or if a recovery has started, but news like the above is, frankly, good, but I am aware that its not good for everyone, but as other sectors recover this will seep through, who knows when that will happen, but perhaps next year is reasonable, given that a just a few months ago no one could envision any one in any business expanding their operations, or making new investments in Thailand yet a few months on, here they are...

[craigt3365]

I hear ya on that...and what you say is exactly what I believe...but not what I read from the so called "experts." They say the up tick after the bottom will be slow. More of a "U" curve as apposed to a huge "hockey stick" or "V" curve. What to believe! I am getting close to being ready to buy, but not quite there yet. I will be pleased with a slow up tick, and PISSED off if not as I may have missed out!

[Abrak]

At average price of BT2m, then the avg psm price is about 25k-33k psm (assuming avg size of 60-80sq m). Current prices are easily a few times that.

While I will accept that the average price of new build (for condos) in greater Bangkok is probably Bt40k or so (with my company it ranges from Bt29k to Bt64k per sqm) the average size of a condo sold is probably no more than 50sqm (we tend to range from 35-70sqm). This is where the mass sales is happening not in the high end market.

I also consider that values for new build are about 25% higher than the second hand market.

You simply cant compare prices with luxury build (Bt120k/sqm) and spacious layout (150sqm+).

(You can also easily make money selling 150sqm townhouses for less than Bt2m is you locate them in the districts of Bangkok.)

Newer build is obviously more expensive than second hand.

The relatively low overall ratio of households property value to GDP must say something as well as the low level of mortgages to GDP. To the extent that average prices are the same multiple of average income, it must be remembered that those with below average income do not probably even own a home in Thailand as like elsewhere, so that the multiple of actual home owners house price to income is probably less as their income is on average higher than the total population.

Incidentally the idea that Thailand has a particularly high distribution wealth verses almost any other country doesnt really hold up. The top 10% of income holders own less than 50% of the country's net worth while in the US the top 10% hold more than 50%.

[trogers]

I hear ya on that...and what you say is exactly what I believe...but not what I read from the so called "experts." They say the up tick after the bottom will be slow. More of a "U" curve as apposed to a huge "hockey stick" or "V" curve. What to believe! I am getting close to being ready to buy, but not quite there yet. I will be pleased with a slow up tick, and PISSED off if not as I may have missed out!

I have put out a lookout notice to my housing agents for 2 old condo units (with target sizes and prices) since Mar this year and I am still waiting for some satisfactory offer. Price/m2 requested by me is the same as 2 condo units I acquired last Sep and Nov. Looks like there are less desperate sellers in old condos. Most of the distress sales are in projects nearing completion.

[tangoll]

I tried find the old thread titled *Have you bought or sold your condo recently* but unable. During last 3 - 4 weeks, there has been a big increase in people asking me for details/pricing on my condo units. One month ago, I met an agent who came to see me about the units I have. Today, this agent delivered a buyer who signed a purchase agreement to takeover an off=plan unit.

Siri@Sukhumvit, Sukhumvit soi 38 at Thonglor, 17F of 34F building, 1 bed/1 bath, 50.6 sqm. I bought in Aug 08 resale for 5.1 mil baht, sold , one year later, for 5.65 mil baht. Orig contract launch price 5.3 mil baht, but first buyer paid full amount and got the unit for 4.9 mil baht. The new buyer is Thai late 30s male.

Also, many prospective inquirers are young Thais in their early 30s looking for rental property to build up their asset base so that 5 to 10 years out, they will have a steady rental stream to secure their future. I am very surprised how forward looking they are. No farangs have inquired about my properties, only Thais.

I think ability to move properties depend on location, quality of building, view and outlook of project, and of course price. But prices of well located projects have not come down much, if at all. I just heard that Quattro a Sansiri building, on Thonglor soi 4, has only ten 1 bed units left for sale by developer. Latest 1 bed unit on high floor 26F or so sold for 8 mil baht, about 54 sqm.

The condo market for good projects is much more active than six months ago, and transactions are being reported. The doomsayers here will say what they want, but to tell the truth, who cares what they say == the market acts independently of their predictions.

[craigt3365]

I am now in Bangkok and have been looking around the past few days. From what I have seen, it is a mixed bag. Like said above, some units seem to be doing very well, and some still selling at crazy prices. Especially if there are only a few units left.

But, I have seen a bunch of units for sale at either no profit, some loss, or just lower price than the developer is offering them currently. Seems that these are by individuals looking to get out of their contracts before the balloon payment? I don't know much about the buildings, but some of them are by major developers.

Again, this is much better than 2 years ago when I would inquire about a property and would be told the price was what they had into it, plus a healthy profit.

[craigt3365]

Well, I finally bought a house in Na Jomtien. Thanks for everyone on Thaivisa for all their help! It has been wonderful, to say the least. Especially those who PM'd me and took the time to meet with me. I really do appreciate it!

The price was substantially below the purchase price from 3 years ago. Absent, foreign owner who has been stung with his various overseas purchases. Pretty darn good deal.

Now my learning curve is really going to shoot up! Visits to the local Home Pro store have been great! Fantastic service, pretty darn good selection, and even a few English speaking staff. Lots to do.

I will PM the details of my estate agent. Heck of a guy here in Pattaya.

Craig

[moo9]

Well, I finally bought a house in Na Jomtien. Thanks for everyone on Thaivisa for all their help! It has been wonderful, to say the least. Especially those who PM'd me and took the time to meet with me. I really do appreciate it!

The price was substantially below the purchase price from 3 years ago. Absent, foreign owner who has been stung with his various overseas purchases. Pretty darn good deal.

Now my learning curve is really going to shoot up! Visits to the local Home Pro store have been great! Fantastic service, pretty darn good selection, and even a few English speaking staff. Lots to do.

I will PM the details of my estate agent. Heck of a guy here in Pattaya.

Craig

Why you needed an agent though?

Cheers

[craigt3365]

This was from an absent owner who just decided to sell...at a huge discount. He bought the house from the estate agent I worked with. I was the first one told about it, by the agent, and immediately bought it. Never would have happened on my own....though I do understand your point....

[trogers]

Well, I finally bought a house in Na Jomtien. Thanks for everyone on Thaivisa for all their help! It has been wonderful, to say the least. Especially those who PM'd me and took the time to meet with me. I really do appreciate it!

The price was substantially below the purchase price from 3 years ago. Absent, foreign owner who has been stung with his various overseas purchases. Pretty darn good deal.

Now my learning curve is really going to shoot up! Visits to the local Home Pro store have been great! Fantastic service, pretty darn good selection, and even a few English speaking staff. Lots to do.

I will PM the details of my estate agent. Heck of a guy here in Pattaya.

Craig

Why you needed an agent though?

Cheers

Using an agent you can trust is a plus point. We have limited time to devote to searching and should have some agents to augment our search effort, especially so if time is critical. Their profession is to keep themselves informed on their specific markets, so why do you want to try saving a couple of percent and deprive yourself of opportunities?

[Thighlander]

Buy below wholesale, sell at wholesale. Extrapolate the price you will pay off of the downward sloping curve. That's how I made money this year in Las Vegas, of all places.

I did watch the rent v. buy video. His points are well made, however you could be paying 3000 rent for a house worth only 5-600K. It's a lot different then. Look for homes that are selling for between 8-12 times annual rent. His example of 3000 for a million Dollar home would be a ratio of 30. I would not want to buy into that either. One way is to look at a house for 1 million THB. The rule of thumb would be that it you could rent it out for 10,000 per month it would probably be a good investment. But only buy a property that you would be willing to live in yourself.

See you all soon.