Does Anyone Find Home Prices In Bkk

[flowerman134]

perhaps i am just looking at websites that list very inflated prices hoping to reel in a fish but... for example...

Chonladda Housing Estate

Ladkrabang/Near to Suwannabumi Airport

102 sq.wa

3 bed/3 bath

9,500,000 Baht

I don't know if living by the airport is some kind of selling point --- "Deafening Loud Aircraft Flying Over Your Head 16 Hours a day!"

but seriously? ...

that location is out in the middle of the boondocks.

is bangkok running out of space? um, no, it is not.... everyway you look there are a row of decrepit shacks and shop houses that need to demolished.

so... this house is 48,000 baht per m2

and another

Pattanakarn Road/East Bangkok

119 sq. wa

4 bed/4 bath

19,500,000 Baht

82,000 baht per m2

rental yields in bangkok appear around 5% annually of the value of the property however a large % of the rental properties are empty

i have a hard time trying to understand the bangkok housing and condo market.

these home builders must be making an absolute killing.

[Heng]

Some do. See Land and House, AP, Golden Land, etc. etc. Plenty of developers (esp. the cash strapped ones) don't make a killing though.

There's gov't housing estates with homes and condos in the 300,000 to 800,000 Baht range for those on a budget. A home is a home right? Especially true for first time buyers and those who don't want a fat mortgage. Something for everyone.

Edited September 12, 2010 by Heng

[GuestHouse]

By coincidence, directly before I logged into ThaiVisa I was just comparing the price of 17 Rai of agricultural land for sale in the North of Thailand with a similar sized plot for sale in one of the most productive parts of rural England.

The Thai land, for sale from a bank (ie they've loaned money on it and the debt has not been paid) is three times the price!

It sheds a light on where all the Mercs, Rolex's, Designer Homes and Private Education is coming from.

[flowerman134]

so buy a condo as an investment property. you can rent it out at 5% half of the time, so a 2.5% annual return of the property's value before maintenance costs, before potential legal costs, before insurance... and of course there are always doomsday scenarios like structural problems, etc.

So the key to the investment is that the condo will go up in value.

at some point though, the price of your condo will stop appreciating. so either it is the classical music chairs investment strategy where you are planning to get out before everyone gets out or

apparently Thais don't carry much debt so these prices can really just keep going higher and higher and higher as long as everyone agrees to keep playing the music.

it is a clear bubble though imho

Edited September 12, 2010 by flowerman134

[wintermute]

Paying the equivalent of $300,000-$500,000 U.S. dollars for a house in Thailand is a poor value. You're getting a house built with substandard materials in one of those fake property developer generated "neighborhoods."

At least with the equivalent you can get a much nicer house, larger real estate, and a peace of mind in the U.S. Not to mention the neighborhoods will most likely have decent schools to boot.

[Heng]

so buy a condo as an investment property. you can rent it out at 5% half of the time, so a 2.5% annual return of the property's value before maintenance costs, before potential legal costs, before insurance... and of course there are always doomsday scenarios like structural problems, etc.

So the key to the investment is that the condo will go up in value.

at some point though, the price of your condo will stop appreciating. so either it is the classical music chairs investment strategy where you are planning to get out before everyone gets out or

apparently Thais don't carry much debt so these prices can really just keep going higher and higher and higher as long as everyone agrees to keep playing the music.

it is a clear bubble though imho

It's all relative. Some people are leveraged to the neck, some people aren't. The ROI (and return in general for whatever investments, forex accounts, fixed accounts, and yes, rental income) doesn't matter that much to these folks, at least not in the sense that they don't have to hang on to every single tenth of a point in 'return' the way folks in the former group need to do (not saying they don't know exactly what it is though).

It's a favorite investment bank cold call 'play'... they ask you about your other investments, rental property, etc., oh, I guess 2-3-4% return, depends, I don't exactly...

"You know, you're not even beating inflation!"

"Well, perhaps you aren't but how relevant is inflation, say at even 5% a year for those who only consume 5% of their total net income? Perhaps you could explain that to me?"

-silence on the other end, sometimes the sound of them asking someone next to them, then they switch to trying to pitch insurance type 'investments.' (basically the 'I give up' of banking center cold calls)

[Heng]

Paying the equivalent of $300,000-$500,000 U.S. dollars for a house in Thailand is a poor value. You're getting a house built with substandard materials in one of those fake property developer generated "neighborhoods."

At least with the equivalent you can get a much nicer house, larger real estate, and a peace of mind in the U.S. Not to mention the neighborhoods will most likely have decent schools to boot.

Or just get both. I heartily recommend the Austin Texas hill country. Rob Roy, Barton Creek West, etc... Go Chaps.

Edited September 12, 2010 by Heng

[wintermute]

Paying the equivalent of $300,000-$500,000 U.S. dollars for a house in Thailand is a poor value. You're getting a house built with substandard materials in one of those fake property developer generated "neighborhoods."

At least with the equivalent you can get a much nicer house, larger real estate, and a peace of mind in the U.S. Not to mention the neighborhoods will most likely have decent schools to boot.

Or just get both.

The Thai-American retirees i've met seem to have the right idea. They rent out their home in the U.S., collect social security, and move back into the family plots in Thailand and build houses on it. Free land and a continuing source of retirement income from the U.S.

Usually the kids are all grown up too so they are totally debt free.

Edited September 12, 2010 by wintermute

[Heng]

I do agree with you thought WM, to put 300 to 500 USD into one of the local versions of McMansions is an extreme waste of material (just IMO). Not including price of land, that's roughly the amount that goes into 50-60 million Baht homes. In terms of after service (*rimshot*) though, especially here, I could appreciate the benefits of gated community vs. gated private 'castle' built to specs.

[dave111223]

It all depends where you look. I recently purchased some land in Bangkok for 15K THB per sqwah.

Around 1km down the road there's a new Land&House project. Based on the price differential using the same house plan on different size plots i was able to calculate the cost of their land...70,000 per sqwah!

If you buy into a project you are going to pay a big premium. My wife was big in to buying into a housing development (for safety, neighbors etc...) but after seeing these figures she changed her tune pretty quick.

[powderpuff]

If you buy new you are gonna pay a big premium.

For the last 20 years I would have said Thai property was more expensive than Waikiki Beach.

But since 2005 Condos have become relatively affordable. Say about $90,000 for a 2 bedroomed place.

But why would you want to buy?

Headline for some of the above posters - the 30% per year gains are gone forever.

Greed is good as Gordon Gecko said but the price to be paid for insane greed & wildass speculation will always end badly.

Which it did.

Pay cash. Buy something to live in.

& Leave the Vegas gambling to the Chinese.

[travelmann]

Surely if someone will pay it then "that's the market price"

[Heng]

It is what it is, although it's easier on the ego for some people to imagine that the market is about to collapse (it has to once in awhile, right?) and that everyone has a fat mortgage, everyone should be renting, um, but no one has tenants....

[IanForbes]

Why buy when renting is usually a better investment? Foreigners can't own the land the house is standing on, and land is really only the true value. Who actually NEEDS a palace to live in? You can only occupy one room at a time. Essentially, you only need one bedroom for every occupant in the house, and a kitchen, living room and bathroom. Anything more is excess.

[bermondburi]

I think that property in Bangkok is quite cheap, or where I live in Nonthaburi it is anyway . A two bedroom townhouse starts at about 7-800,000 and you can pick up a three bedroom single house starting from 2 million. At the exchange rate today that means that a three bedroom house with a big garden out in the suburbs in a nice area is about 40,000 pounds. If I compare this with London (similar property lcoation 400,000 pounds up ), then it is EXTREMELY CHEAP, and you don't get graffiti everywhere and little wanke_rs with baseball caps running round smoking skunk trying to sound Jamaican !

[flowerman134]

i bought a house in the usa march this year and i am renting it out now at 15% but i do have to pay property tax at 2.5% and HOA 1%

Definition: An asset bubble is formed when the prices of assets are over-inflated due to excess demand. It usually occurs when investors all flock to a particular asset class, such as real estate or commodities such as oil. This happened in 2005-2006 with real estate, and in the summer of 2008 with oil prices. It is a form of inflation that is not always accurately captured in the Consumer Price Index (CPI). For that reason, asset bubbles can be aggravated by low interest rates.

would u say that bangkokians tend to over invest disproportionate percentages of their wealth in real estate?

Edited September 13, 2010 by flowerman134

[flowerman134]

Why buy when renting is usually a better investment? Foreigners can't own the land the house is standing on, and land is really only the true value. Who actually NEEDS a palace to live in? You can only occupy one room at a time. Essentially, you only need one bedroom for every occupant in the house, and a kitchen, living room and bathroom. Anything more is excess.

convenience mostly. you don't have to worry about the landlord wanting the home back. you also have greater control over choices about the home (paint/design/the various DIY aspects of home ownership). there are psychological benefits that shouldn't be discounted for most people in home ownership.

Edited September 13, 2010 by flowerman134

[slapout]

In the Chiang Mai area, the gated community price do not appear nearly as expensive as are quoted on this topic for Bangkok area. One of the reasons that the gated community is so sought after and the high prices paid, seems to be the requirement for a pool, exercise facility, club house, golf access, etc. Guess it depends on your life style, and what you perceive as required/desired in a house and the monies you have available to get what you want.

Another topic asks why Thai's carry such large amounts of cash into or out of a bank, on person, etc. Its the way that individual handles his finances, same with a house, boat, and other play toys/possessions, it probably gives them a comfortable feeling.

The prices in a area that are high, compared to surrounding area, are usually accompanied by higher wages. If your not a businessman or a wage earner who can pay the additional monies, your in the same predicament as retirees who came to Thailand to get away from high costs at home.

[bonobo]

In my experience, it is not the cost f the house which is so expensive, but rather the cost of the land.  Lots way out of town past Kachanapisek Road cost more than the same size lot in central San Diego.

The cost of building a house is really quite reasonable.

[Pib]

Location, location, location. When you are in or close to a metropolitan area like Bangkok (which is also the capital), the land cost is high and usually the majority cost of the total land+structure/house cost. Bangkok has a huge population, and land which has a good location and/or infrastructure (i.e., sewer, water, electricity, roads, etc) is becoming more scarce everyday....this is one reason you see more house/townhouse developments springing up away from the central, highrise Bangkok (i.e., the suburbs). Location, location, location.

[123ace]

If you follow the property news you will see a few clear trends, notably that developers are down-sizing unit sizes for houses and condos, seeking the lowest possible constuction and sales prices and ensuring 90 - 100% mortgages remain available for buyers.

We are effectively seeing deflation of the property market indicated by the nature of the supply trend. The higher end of the market has in fact peaked - due to almost no new demand from end users (i.e fewer speculators now at the high end). The foreign buying trend is off sharply due to exchange rates and lack of finacing, lack of end user demand and is not expected to return any time soon.

Be assured that we face a major correction here.

[thaihome]

If you follow the property news you will see a few clear trends, notably that developers are down-sizing unit sizes for houses and condos, seeking the lowest possible constuction and sales prices and ensuring 90 - 100% mortgages remain available for buyers.

We are effectively seeing deflation of the property market indicated by the nature of the supply trend. The higher end of the market has in fact peaked - due to almost no new demand from end users (i.e fewer speculators now at the high end). The foreign buying trend is off sharply due to exchange rates and lack of finacing, lack of end user demand and is not expected to return any time soon.

Be assured that we face a major correction here.

I have been reading about this coming correction in the Thai real estate marker for almost 10 years now.

But that is the great thing about predications in the real estate market, if you keep saying it over a long enough period of time, you will at be right once, eventually.

TH

[w11guy]

Surely if someone will pay it then "that's the market price"

That's not really true. If someone is stupid and pays $200K for an apartment that other people in the same block only paid $100K for, it's not really the market price. It just means someone was incedibley stupid. Sometimes, during bubbles, almost everyone is incredibly stupid. The 'market price' may be $10k this year but it may be $50k next year. What you say is mostly true during normal times, but property and other assets often gets into bubble territory.

[w11guy]

Why buy when renting is usually a better investment? Foreigners can't own the land the house is standing on, and land is really only the true value. Who actually NEEDS a palace to live in? You can only occupy one room at a time. Essentially, you only need one bedroom for every occupant in the house, and a kitchen, living room and bathroom. Anything more is excess.

It depends on individual circumstances. I have always preferred to buy for the simple reason that I can renovate the property to my tatses and I can stay as long as I want. With renting you can't make alterations you may want to it and it is difficult (for me anyway) finding somewhere that suits me perfectly.

In Bangkok you would be much better off buying if you were planning to stay in the same place long-term, provided you have the cash to make the purchase. Suppose you found a property that was $200K to buy of $10k/year to rent (based on 5% yield). If you paid $200K cash that you had sitting in a savings account earning 2% interest, it would be costing you $4k/year in lost interest to buy. Renting would cost you $10k/year. So by buying you would be $6/year better off. Obviously there are other costs involved, but in these circumstances you would be much better off buying.

Everyone has different circumstances thought, so each person has to decide what's right for them.