Thai Real Estate Market?

[sbaker8688]

I've heard some rumors about the "bottom about to fall out" of the real estate market in Thailand. Can someone tell me why this is supposed to happen? And is this a "consensus view?" What's going on?

[expatinasia]

From whom did you hear this well-roasted chestnet?

[Dragonman]

Didn't know there was a real estate market in Thailand. Just in Bangkok and some of the resorts. Can only see the bottom falling out if Company purchases rules are monitored more carefully.

[parhorne]

i think it depends on where you are, the market in bkk may be nearing top-out except the realy high end , but in pattaya, particularly jomtien, its climbing ever higher, especially with all the new mega-projects being started or in the planning stage. there are two areas that seem to be under supplied at the moment, 1 the apartment market for thais, white collar workers and the high price end condos and houses.the so-called bubbles never seem to affect the extreme ends of the market--- But THIS IS THAILAND , AND WHO THE ###### KNOWS WHAT COULD HAPPEN !!!

[Khun Jean]

If it is like the last bubble, prices did not really go down.

Banks don't sell foreclosed properties for a lower price that the initial loan or higher.

Thais are a strange bunch. Most of them rather wait indefinately then lowering their price.

I know places that are for sale many years. If they are for rent they are occupied within a week. But nobody does it because the change of selling is gone when you rent.

I know many pieces of land for sale because the owner doesn't want to put up a small "For Sale" sign. It will cost a few hundred baht tax and nobody wants to pay taxes. This was for land priced in the 500.000 to millions of baht per rai. Nobody knows its for sale, they don't want to use a broker because a broker wants a percentage, even if that percentage is paid by the buyer.

Don't think with a western mind, it is all completely different here.

[thaigene2]

The prices are still really stupid for condos. I was quoted 9 mil for 111 m2 the other day in BKK. And they haven't even broken ground. Pre-build buying is a really risky venture now I think. Keep in mid the price per metre (always keep this in mind actually), it has gone from avergae 45,000/m2 for "A" grade to 90,000/m2 at the height of the boom around 6 or 8 months back.

I'd be pretty cautious now..but then I'm the guy with no condo..or house..or car. So what do I know?

[The_Moog]

#The 'market' is totally illiquid. As pointed out it is not a market, prices are arbitrary and inelastic to demand.

#A lot of the concrete egg box properties are little more than worthless.

#Land sometimes has a value that would lead you to think that there were not swathes of empty plots throughout the city.

#Phuket property is driven by external forces.

#Condo prices that correlate with Hong Kong/Singapore are pie in the sky.

I have a property here, I don't see any need to concentrate risk by buying more.

[~G~]

The prices are still really stupid for condos. I was quoted 9 mil for 111 m2 the other day in BKK. And they haven't even broken ground. Pre-build buying is a really risky venture now I think. Keep in mid the price per metre (always keep this in mind actually), it has gone from avergae 45,000/m2 for "A" grade to 90,000/m2 at the height of the boom around 6 or 8 months back.

I'd be pretty cautious now..but then I'm the guy with no condo..or house..or car. So what do I know?

<{POST_SNAPBACK}>

Pre-build buying? what kinds of guaranties do you get? what if the company goes bankrupt?

[Teach]

I've heard some rumors about the "bottom about to fall out" of the real estate market in Thailand.  Can someone tell me why this is supposed to happen?  And is this a "consensus view?"  What's going on?

<{POST_SNAPBACK}>

The rumors are true, though it will be the top end that suffers most and not surprisingly. Over inflated prices driven by greed and feeding off what Thai's 'again' appear to think is an inexhuastable supply of foreign investment. This economy has always been 'floated' by foreign investment most recognizible being tourism. That influx is always tidal and dependent on outside forces. Phuket already is feeling the slow down in over rich foreigners wishing to buy property that is no longer good value. Bkk will soon follow and will come to a dramatic halt. However the lower end will not be affected the same way but then there never has been a boom at the lower end anyway. Bt. 2m max is the safest property to buy without getting burned so long as you purchase it properly and not try to cut corners by being stingy.

Of course I am not suggesting that buying property here is a wise thing to do .

Remember the golden rule here " Never have more here than you are prepared to walk away from".

You have had good advice from your responding posters.

T.

[xbusman]

Thats seconded in caps NEVER HAVE MORE HERE THAN YOU ARE PREPARED TO WALK AWAY FROM

Thanks Teach

[Teach]

The prices are still really stupid for condos. I was quoted 9 mil for 111 m2 the other day in BKK. And they haven't even broken ground. Pre-build buying is a really risky venture now I think. Keep in mid the price per metre (always keep this in mind actually), it has gone from avergae 45,000/m2 for "A" grade to 90,000/m2 at the height of the boom around 6 or 8 months back.

I'd be pretty cautious now..but then I'm the guy with no condo..or house..or car. So what do I know?

<{POST_SNAPBACK}>

Pre-build buying? what kinds of guaranties do you get? what if the company goes bankrupt?

<{POST_SNAPBACK}>

never get involved with buying from blueprints, unless with a reputable company that is prepared to show you the audited accounts and past projects in the area you wish to purchase. Even with all that there is still the problem of who set the prices as here they will always reflect what the value will be on completion meaning you aren't really getting a deal such as you would if you purchased a print property in London.

Again if you must, keep it under Bt.3m range. properties at Bt,5 m and above - in Bkk anyway are about to dive like a brick for the farang.

Best advice DO NOT BUY FROM PLANS.

[nev]

very good advice,what opinion do you guys have on the pattaya market there seems to be new condos going up everywere.

with rents so cheap the rental return on these places are not very profitable,i was thinking of buying to rent out and move in to later but with so many condos around and some silly prices being asked surely the market in pattaya/jontiem is set to crash too.

or will it stay the same with the new airport,talk of a casino,new road going in the back of jontiem help to keep the market stable?

[thaigene2]

Let the overheated market play itself out. Once it runs out of steam (I don;t know when of course..but maybe within 12 months?), there will be bankruptcies and an oversupply. Take your time looking at the oversupply of the newer places trying to avoid bankruptcy..it's the best chance to get a better deal. But beware..of everything here.

[monty]

Nev,

The Pattaya market is rather unpredictable....

I had 6 units (41sqm) up for sale in Jomtien for 15 months, very nicely done with marble and the works...

The first one sold quick at almost asking price (32.000 Baht/sqm), then nothing happened for 1 year and now 3 units were sold in 3 weeks!

This is in a building which is a bit older then most, but due to reasonable prices is getting very popular.

Happy since they gave me 100% return on the resale in just over 3 years, and they have been rented out most of the time as well...

I don't see this repeatable, this would mean the studio's going for more over 2.500.000 Baht in 3 more years...

New places in Pattaya with selling prices around 100.000 Baht/sqm, I don't see how one can make a decent return on rentals or resale...

[nev]

thanks for that info monty well done making such a great profit.

had a look at a few propertys and yes a few well over priced and rental return not very profitable.

100.000baht a sqm sure does seem high.

1.3mill baht seems fair for a 41sqm@ 32.000baht/sqm

4.1mill baht 100.000baht/sqm seems way over the top.

[Gary A]

Bubble real estate market, bottom falling out ??? A good value is a good value. A sixty square meter condo in a good location for less than two million baht is still a good buy. I'm happy to see my condo appreciating but since I bought it to live in I frankly don't care what happens to the market. Guys who are speculating should be nervous but those who are owning a place to live as is the intent of the law should be quite comfortable. There is a huge glut of new construction and I think that due to the cost of materials rising VERY fast people are going to lose substantial amounts of money. I'm not a betting man but I WOULD bet that a large number of these new shoe box specials will NEVER be sold and may not ever be finished.

Edited May 16, 2005 by Gary A

[charles]

I agree, buy to live in, otherwise don't buy. Don't try to guess the so-called "market". Prices most probably won't crash, the "market" will just die. They'll just stop building for a while. Construction materials aren't likely to get cheaper.

Also for foreigners, I'd have thought the exchange rate was probably the biggest consideration. For example, I'm British and circa 75 baht to the pound looks v. good in my book. Could get better but look back at the past 10 years and you'll see it hardly ever has been better.

Edited May 16, 2005 by charles

[FREDPAT]

The prices are still really stupid for condos. I was quoted 9 mil for 111 m2 the other day in BKK. And they haven't even broken ground. Pre-build buying is a really risky venture now I think. Keep in mid the price per metre (always keep this in mind actually), it has gone from avergae 45,000/m2 for "A" grade to 90,000/m2 at the height of the boom around 6 or 8 months back.

I'd be pretty cautious now..but then I'm the guy with no condo..or house..or car. So what do I know?

<{POST_SNAPBACK}>

Pre-build buying? what kinds of guaranties do you get? what if the company goes bankrupt?

<{POST_SNAPBACK}>

My business is to buy and sell investment properties on behalf of overseas investors. Since December 2003, I've bought a total of 6 condos, all at different stages of construction, buying the last 2 on 31 December 2004. On 1 January, price/m2 went up 15% and by another 15% in July. The first unit I bought has almost doubled in value and is currently being rented out at 35,000/month. The remaining 5 will be finished in November (1) and next July (4), respectively. I have given investors an average 20% return pa. All the news I hear and read is positive for continued growth, albeit at a slower rate, for the next 3-5 years. I intend to capitalize on the current bull market so I'm not looking back when it's 140,000/m2 and thinking, "I should've bought at 45,000/m2!" Having said that, if you're here for the long haul, I wouldn't put all my eggs in one basket, and invest in an already existing business that will provide you with a decent income when there is a lull in the real estate market.

In answer to your question, most developers are giving 10-20% pa guaranteed returns for the first 2 years in the Pattaya/Jomtien market. There are many "signs" pointing to a continued boom, and I'd be happy to discuss them at another time.

Ed: Deleted links to other websites, as this is against forum rules. Please contact admin if you wish to advertise.

Cheers

[nev]

sorry to be pedantic but you say you have been in buisness since dec 2003 and u have bought a total of 6 properties not a very successfull buisness or do you charge a big fee,sorry i am just curious as iam intrested in buying around pattaya.