Mexican Standoff In Phuket Property Market

[Abrak]

Tucker Bishop ?? One of the few I could think of worth noting.

Theres a glut of stuff in almost all sectors, some more some less, but people seem to look at the listing prices when looking for comparable sales not the actual selling prices.

Not quite. I did say Thai. Although not far off. RIP.

Actually I sold I believe for what I think was less than replacement cost. The land had certainly appreciated considerably over the period. I think that a bad assumption that people 'can' make is that the actual building holds its value while I think it tends to depreciate from brand 'spanking new'.

People often look at what the equivalent 'new build' will cost and think that is what their place is worth while I think that older build attracts a discount to new build. This is particularly true of 'condos' that seem to depreciate about 30% as soon as someone moves in. Anyways not true for everyone I am sure but if you can get as much as 50% over replacement cost on a property you are certainly doing well in Phuket.

As you say 'listing prices/selling prices' and half the houses that are listed are not serious about selling. I mean if Evanson halved his price then took it off the market after 3 years - he was clearly hoping that one of the 'more money than sense' guys would turn up in the first place. And that is often true about villas in Phuket - rich guys buy them because it seems like a fun toy at the time, watching it being built, showing it to your friends etc. and then think 'what am I doing with a US$2m villa, costing me US$3,000 a month to maintain and which I visit for 4 weeks a year?' At which point they put it on the market for US$3m. They dont sell but they dont need to it isnt as though they have a mortgage. They happily tell people that prices are going up because the property magazines have villas in them at ridiculous selling prices despite the fact they get one 'I'm on holiday, perhaps I might want to buy a villa here' prospective buyer a month.

I would guess that since I built my place, the land price had trebled over 11 years and building costs are up 80% so that selling with an 80% profit over the time period didnt actually match replacement cost. (And I still own another half dozen properties in Phuket!)

[logbags]

I personally laugh my <deleted> off when I see the marketing hype and blue sky selling you see in Phuket. On the west coast half of the year the beaches are no go areas and the onshore winds make living by the beach a pain. From Surin to the Heroines monument there is little to do at night with only pockets of areas with farang quality restaurants. Laguna is so overrated with very so so beaches and way overpriced hotels. Over to Nai Thon and Nai Yang it is very secluded and a long way to anywhere except the airport. I just can't imagine retired people being comfortable there as there is little for the farang to do.

Most of the old timers I know stick to Patong because they can walk everywhere and there is access to most things a farang wants. Many of them just rent a bungalow for 15,000 a month. They can come and go as they please, have security and maid service. They can go out and get drunk knowing their gear is generally safe in their room. I've been doing it for 26 years and so have many other guys I know.

I was asked by a Sth African guy about buying a property in Phuket, he has a Thai girl who has children of her own. I could not come up with one real good reason for him to buy a property. In most cases it is the farang putting up 100% of the capital for 0% control of the property. Not a good business model. Once the girl gets the house in her name you'll suddenly become far less "handsum" trust me.

Agents never tell you the pitfalls about living right by the beach either. Howling onshore winds in the monsoon, the constant maintainence needed from rain damage, the rust and corrosive sea air on vehicles and your house etc etc. If given a choice between a seaside property and an inland property, I'd take the inland property in Phuket, a few km's back from the beach.

[katabeachbum]

On the west coast half of the year the beaches are no go areas and the onshore winds make living by the beach a pain.

I live by the beach. I love it. No pain. If you dont like the sea or beach, perhaps better somwhere else.

Kata beach sunchairs are120% rented out 150 days a year, 50% 180 days a year.

Before 8am there are 30-50 farang (mostly expats) and tai enjoying the beach 350 days a year, and after 5 pm its 100-500 farang and thai enjoing the beach 350 days a year. Ever been here?

[Abrak]

I live by the beach. I love it. No pain. If you dont like the sea or beach, perhaps better somwhere else.

Kata beach sunchairs are120% rented out 150 days a year, 50% 180 days a year.

Before 8am there are 30-50 farang (mostly expats) and tai enjoying the beach 350 days a year, and after 5 pm its 100-500 farang and thai enjoing the beach 350 days a year. Ever been here?

I sort of agree with you. I tend to think that residents prefer to live by the 'sea' than by the 'beach' though. When I say 'prefer' I mean on a relative cost basis. I assume that is why Rawai/Chalong is so popular and I think that the east coast will do well over time. I dont like the beaches in the high season but I have to admit that a stroll along Kata Yai at 5pm in the low season followed by a cocktail at the Boathouse is great. All these tourists are a bit of a nuisance though.

I agree that if you dont like the sea and the beach you are probably in the wrong place (I dont do 8.00am personally).

Most of the old timers I know stick to Patong because they can walk everywhere and there is access to most things a farang wants. Many of them just rent a bungalow for 15,000 a month. They can come and go as they please, have security and maid service. They can go out and get drunk knowing their gear is generally safe in their room. I've been doing it for 26 years and so have many other guys I know.

Personally I think Patong is a bit of a shit hole and only go there for the occasional dinner. But horses for courses. People like very different things. There are 3 or 4 different types of local communities in Phuket based on very different preferences and lifestyles.

Edited September 5, 2010 by Abrak

[jamesie]

On the west coast half of the year the beaches are no go areas and the onshore winds make living by the beach a pain.

I live by the beach. I love it. No pain. If you dont like the sea or beach, perhaps better somwhere else.

Kata beach sunchairs are120% rented out 150 days a year, 50% 180 days a year.

Before 8am there are 30-50 farang (mostly expats) and tai enjoying the beach 350 days a year, and after 5 pm its 100-500 farang and thai enjoing the beach 350 days a year. Ever been here?

I live also Kata beach on Phuket,south of Karon now 5 years and also love the beach.

The figures you quote above tell me that you must live at another Kata beach somewhere else in the world, or do you you work for TAT?

I thought only they come out with such inflated stats.

Sure a lot of us walk the beach,Am and PM but 100-500 @ 350 days a year, sorry bud, no way in the world [90-120 days high season yes]

And 50% beachchair occupancy for 180 days low season??? Surely you jest/yes!

[barka]

The safest way to do this if you dont want to lose out if you die is.....get a relative eg son or daughter to sign the lease with you when you prchase the property and register it as joint buyers..this has to be done asap ..a good idea would be to do it with a reputable lawer.. the lease would still be owned by the surviving partner..maybe the thai partner eg girlfreind probably would not be to happy

Interesting..

Does this mitigate the 'leasing from your wife' problem eg the land is hers and the lease becomes 50% hers.. If you have dual leasees she would have the ownership of the land but only (possibly) 25% of the lease ??

No this is only cocerning leasehold of the building..as you proably know only thais can own land...if you have chanote title and you are leasing.. land and house

......you have to be very care full who you can trust on who is your land owner....the problems that can arise from your thai wife..girlfreind etc... .depends on what agreement you make with them.....my original post only concerns foeign partners..not thais

[logbags]

Before 8am there are 30-50 farang (mostly expats) and tai enjoying the beach 350 days a year, and after 5 pm its 100-500 farang and thai enjoing the beach 350 days a year. Ever been here?

I remember Kata beach before Club Med was built and it was ok then. Totally ruined by Club Med who even tried to claim the beach road as their own private road. Kata Noi ditto, ruined by a big hotel blocking access to the beach. Both were very nice beaches before that. I call that the Southern end of the island, I'm talking about Kamala, Surin, Bang Tao, Layan and Nai Thon. Surin is a ghost town in the monsoon. There used to be bungalows right on the beach at Nai Harn which cost 80 baht a night where I stayed. Also on Samui at Chaweng where I spent monsoon season in 1985. Wet and windy all the time. Most of these beach front Hotels only got built through bribes and influence peddling. Technically speaking half of Phukets hillside developments are illegal. They get "special" permission to build, i.e pay off somebody to sign off on the plans.

[katabeachbum]

I remember Kata beach before Club Med was built and it was ok then. Totally ruined by Club Med who even tried to claim the beach road as their own private road. Kata Noi ditto, ruined by a big hotel blocking access to the beach. Both were very nice beaches before that. I call that the Southern end of the island, I'm talking about Kamala, Surin, Bang Tao, Layan and Nai Thon. Surin is a ghost town in the monsoon. There used to be bungalows right on the beach at Nai Harn which cost 80 baht a night where I stayed. Also on Samui at Chaweng where I spent monsoon season in 1985. Wet and windy all the time. Most of these beach front Hotels only got built through bribes and influence peddling. Technically speaking half of Phukets hillside developments are illegal. They get "special" permission to build, i.e pay off somebody to sign off on the plans.

Club Med did not succeed in claiming the beachroad, and its public. The low density build of Club Med makes Kata Beach very nice in my opinion.

I liked Pattaya when I was there first time 41 years ago, bungalows, coconutrees and monkeys on the beach. Now its ruined by highrises. Kata is not.

[katabeachbum]

I live also Kata beach on Phuket,south of Karon now 5 years and also love the beach.

The figures you quote above tell me that you must live at another Kata beach somewhere else in the world, or do you you work for TAT?

I thought only they come out with such inflated stats.

Sure a lot of us walk the beach,Am and PM but 100-500 @ 350 days a year, sorry bud, no way in the world [90-120 days high season yes]

And 50% beachchair occupancy for 180 days low season??? Surely you jest/yes!

lets count and see 5-6 pm today. even if its been raining all day, I bet its +100:)

[Abrak]

Club Med did not succeed in claiming the beachroad, and its public. The low density build of Club Med makes Kata Beach very nice in my opinion.

I liked Pattaya when I was there first time 41 years ago, bungalows, coconutrees and monkeys on the beach. Now its ruined by highrises. Kata is not.

Mind you I think Phuket made a big mistake many years ago putting the roads right in front of the beaches. I think it works much better in Samui where they are 100m back.

There used to be a school where Club Med is now but it was moved up the road. I think that Club Meds lease is coming up soon. I dont know whether it is still with MLT but at least they wont be able to build high rises there. Hopefully it will stay as it is or something similar. I fear the beach is so nice that someone is going to feel compelled to spoil it.

[katabeachbum]

Mind you I think Phuket made a big mistake many years ago putting the roads right in front of the beaches. I think it works much better in Samui where they are 100m back.

There used to be a school where Club Med is now but it was moved up the road. I think that Club Meds lease is coming up soon. I dont know whether it is still with MLT but at least they wont be able to build high rises there. Hopefully it will stay as it is or something similar. I fear the beach is so nice that someone is going to feel compelled to spoil it.

12 meters/4 storys on 70% of the land is legal.

Club Med is on 12-15% of the land and few buildings high, so I still think Club Med is a blessing for Kata Beach:)

[evanson]

Tucker Bishop ?? One of the few I could think of worth noting.

Theres a glut of stuff in almost all sectors, some more some less, but people seem to look at the listing prices when looking for comparable sales not the actual selling prices.

Not quite. I did say Thai. Although not far off. RIP.

Actually I sold I believe for what I think was less than replacement cost. The land had certainly appreciated considerably over the period. I think that a bad assumption that people 'can' make is that the actual building holds its value while I think it tends to depreciate from brand 'spanking new'.

People often look at what the equivalent 'new build' will cost and think that is what their place is worth while I think that older build attracts a discount to new build. This is particularly true of 'condos' that seem to depreciate about 30% as soon as someone moves in. Anyways not true for everyone I am sure but if you can get as much as 50% over replacement cost on a property you are certainly doing well in Phuket.

As you say 'listing prices/selling prices' and half the houses that are listed are not serious about selling. I mean if Evanson halved his price then took it off the market after 3 years - he was clearly hoping that one of the 'more money than sense' guys would turn up in the first place. And that is often true about villas in Phuket - rich guys buy them because it seems like a fun toy at the time, watching it being built, showing it to your friends etc. and then think 'what am I doing with a US$2m villa, costing me US$3,000 a month to maintain and which I visit for 4 weeks a year?' At which point they put it on the market for US$3m. They dont sell but they dont need to it isnt as though they have a mortgage. They happily tell people that prices are going up because the property magazines have villas in them at ridiculous selling prices despite the fact they get one 'I'm on holiday, perhaps I might want to buy a villa here' prospective buyer a month.

I would guess that since I built my place, the land price had trebled over 11 years and building costs are up 80% so that selling with an 80% profit over the time period didnt actually match replacement cost. (And I still own another half dozen properties in Phuket!)

Presumptuous hypothesis on your part 'more money than sense guys'?!

The house is now surrounded by the unimaginitave chav/condo crew and completely in the wrong location. Geddit? And the only reason your pile 'trebled' was that you had the luck, and not necessarily good sense, to offload before the last round of the circus that is Thai 'politics'.

[jamesie]

Mind you I think Phuket made a big mistake many years ago putting the roads right in front of the beaches. I think it works much better in Samui where they are 100m back.

There used to be a school where Club Med is now but it was moved up the road. I think that Club Meds lease is coming up soon. I dont know whether it is still with MLT but at least they wont be able to build high rises there. Hopefully it will stay as it is or something similar. I fear the beach is so nice that someone is going to feel compelled to spoil it.

12 meters/4 storys on 70% of the land is legal.

Club Med is on 12-15% of the land and few buildings high, so I still think Club Med is a blessing for Kata Beach:)

i agree that Club Med is indeed a blessing for Kata beach and i for one hope against hope that the situation stays as it is...but TIT

I bet you what ever you like that many greedy eyes have been ,and still are on the remaining available 55% unbuilt land to bring up to the legal 70%.

Then of course the ''baht under the table'' agreement to use all the remaining land as well and build over the 4 story limit..

Oceanside land such as this can only appreciate immensely over time and sadly the scenario i present is only a matter of when, not if!!

[Abrak]

Presumptuous hypothesis on your part 'more money than sense guys'?!

The house is now surrounded by the unimaginitave chav/condo crew and completely in the wrong location. Geddit? And the only reason your pile 'trebled' was that you had the luck, and not necessarily good sense, to offload before the last round of the circus that is Thai 'politics'.

Sorry to confuse you but I was merely quoting from what you posted rather than making a 'presumptuous hypothesis' (another quote)

And have pulled my property off the 'market', which, as far as I can see, is only for arrogant dickheads thinking they can get a 'deal' over the red shirt/Surayud fiasco, or those with more money than sense flying their private planes onto what was once a tropical paradise, but is fastly and furiously turning into Pattaya II.

Actually I said my 'pile' had made an 80% profit against the original build cost (very much less considering maintenance) over the 11 years I had owned. I was not really questioning why your place had not sold or how well it had done, merely recognizing the fact that you originally put it on the market at double the price that you couldnt sell it for in the end. I also dont really thinkthat prices are or have been rising much over the last 5 years as you implied they had. Sorry about the Chavs but it is a bit of a problem I will agree.

As far as my sale goes, I simply got what I could sell it for. It has nothing to do with luck, it may well prove in time to be not good sense but these things are difficult to tell.