Cm Real Estate Status

[chiang mai]

I'm trying to understand the current state of the property market in CM, some people tell me it's become quite active in the past two months whilst others, and my intuition, tells me that it's very very quiet with few properties changing hands. The reason I'm trying to understand this better is because my cousin is still bound and determined to move there and since I live in the South of Thailand and he lives in London, I'm closer to where he wants to be and am obliged to play a role in his hunt for a home. The market sector he's interested in is standalone houses within twenty minutes or so of the centre (Hang Dong((ish)) area), priced around Baht 5 to 6 mill.

Any tips or pointers as to current market conditions, greatly appreciated.

[gotlost]

If he is planning on dieing in the house sure go ahead and invest that 5 or 6 million, but if he has any idea of moving on do not do it. Rent. There are over 5,000 houses on the market in Chiang Mai and that is what is listed with the top 5 realtor's in the area. If you were to add in all the other realtor's and those that are private, oh boy. I can show you 12 beautiful homes, 2 story on a lake empty. You tell me.

Edited October 6, 2010 by gotlost

[chiang mai]

If he is planning on dieing in the house sure go ahead and invest that 5 or 6 million, but if he has any idea of moving on do not do it. Rent. There are over 5,000 houses on the market in Chiang Mai and that is what is listed with the top 5 realtor's in the area. If you were to add in all the other realtor's and those that are private, oh boy. I can show you 12 beautiful homes, 2 story on a lake empty. You tell me.

That's useful but let's face it, builders will always build so I would guess there's going to be an oversupply of unsold new units around the place. Question is, what's the state of the used homes market and does the existence of 5k plus homes for rent mean that nobody wants to sell or there's a shortage of renters, I guess that if I owned property in CM right now I'd rather hang on to it than sell, unless I absolutely had to.

[ThaiPauly]

In the last 5 years Land and House have built and sold 500 houses in Mae Hia, which had prices starting at 3.5m, near the airport...sold them all and are now building another 500 with prices starting at 10m B (so my Wife says)...about the prie, but I can testify that the first 500 have been sold as I look at them every day out of my window !!

Someone's buying

[chiang mai]

In the last 5 years Land and House have built and sold 500 houses in Mae Hia, which had prices starting at 3.5m, near the airport...sold them all and are now building another 500 with prices starting at 10m B (so my Wife says)...about the prie, but I can testify that the first 500 have been sold as I look at them every day out of my window !!

Someone's buying

Hmmm, that's worrying. But ta anyway.

[ThaiPauly]

In the last 5 years Land and House have built and sold 500 houses in Mae Hia, which had prices starting at 3.5m, near the airport...sold them all and are now building another 500 with prices starting at 10m B (so my Wife says)...about the prie, but I can testify that the first 500 have been sold as I look at them every day out of my window !!

Someone's buying

Hmmm, that's worrying. But ta anyway.

Why's that?

[sarahsbloke]

Thais like new houses, they don't want to buy secondhand.

So

Generally new houses sell, secondhand don't and go on the rental market.

[ThaiPauly]

^agreed, I know this is true...but if I had 100 baht for every ghost in my house I would be pretty rich....but we brought NEW....so what difference does it really make?

[chiang mai]

In the last 5 years Land and House have built and sold 500 houses in Mae Hia, which had prices starting at 3.5m, near the airport...sold them all and are now building another 500 with prices starting at 10m B (so my Wife says)...about the prie, but I can testify that the first 500 have been sold as I look at them every day out of my window !!

Someone's buying

Hmmm, that's worrying. But ta anyway.

Why's that?

Because it contradicts the trend that I thought existed, aka low sales on all fronts. Also, L & H in Phuket is simply not selling at all, their prices were static for a year then they raised them, three months ago they announced a sale and lowered their prices back to what they were previously. Throughout all of that the number of properties for sale has remained broadly the same, prices around 6.5 mill!

[chiang mai]

Thais like new houses, they don't want to buy secondhand.

So

Generally new houses sell, secondhand don't and go on the rental market.

True, a good point.

[gotlost]

Thais like new houses, they don't want to buy secondhand.

So

Generally new houses sell, secondhand don't and go on the rental market.

So as SB says and its true, second hand houses do not sell well. If your cousin planes on dying in the house and not moving on go for it because selling a secondhand home even in a prime location at rock bottom price is all most impossible.

[chiang mai]

Thais like new houses, they don't want to buy secondhand.

So

Generally new houses sell, secondhand don't and go on the rental market.

So as SB says and its true, second hand houses do not sell well. If your cousin planes on dying in the house and not moving on go for it because selling a secondhand home even in a prime location at rock bottom price is all most impossible.

Logically and over time, the value of second hand houses must surely increase by virtue of their location and price, when compared to the cost of new property that is located further away from the centre, buy, demolish and build again is what I see down in the neck of the woods all the time. But we're moving away from the theme of this post....

[jayinoz]

To buy new or second hand makes very little difference in our world. But in Thailand it makes a world of difference... For example they have a ceremony for new houses, not old from what I have seen. A Thai man has more pressure to buy a NEW home for him and his bride to live in. 2nd just does not cut it. Thus the reason we can get rentals on 2nd houses that look spectacular for some of the lowest yields I have ever seen.

For example someone who bought a house for 5 mil 5 years ago cannot afford sell for half the price. As they probably still owe the bank 4.5 Mil. So they need to get more than 4.5Mio, plus they want a profit. So advert for 5.5Mio... nearly every place I been to see for rent the owner asks would I like to buy. So it never sells- as you can buy new for 5.5.

On an approx 5 Mio house you only get rental income of approx. 100K Bt pa, thus u only pay 2% yield to the owner- BARGAIN. Why buy- rent and invest elsewhere in the world.

If you plan dying in it then go for it and add to it, etc, etc...

Edited October 6, 2010 by jayinoz

[jayinoz]

Also the best deals could be on those near new 500 houses built in the last 5 years, that was mentioned, where the banks need to forclose on some failing to pay. The bank simply wants its money back, so in affect the biggest agents in Thailand are the banks. Just go into a bank and you can flick through a huge book of 2nd hand houses, factories, shop houses, land, all you can imagine at forcloser prices. Often Agents get these on their books then try make a commission. Thus why 5000 2nd homes listed on the agents books, a large percentage will have already been forclosed on. It is not the owner ringing them to say- please sell my house. The agents chase the banks. Agents triple up and more on selling these places.

An X worked in a bank and said the only real people they had who inquired about the homes, etc where agents trying to make a deal with the bank. Yet the bank sees many of them regularly, so they always say, send us a real buyer and we will give you a commission- no problem.

Save money and go straight to the bank if you intend to buy. Many over commit themselves buying new and can only keep paying for a few short years. My X parents n law lost a 4 storey mansion on huge land and lake, when their Karoke business went down. Due to the 12PM cut off Taksin introduced some years ago. Then supposedly their business partner took off with the 300K in the biz account and then they were broke. 6 months later the bank took the property away from them. It was on the market for years and I never saw a buyer as a lot was still owing on it. Banks do hold out.

So it makes sense that you SHOULD get a 2nd house for a dead cheap rock bottom price- problem is the money needs to be paid back to the bank. Thus why they are not extraordinarily cheap.

Landlords often complain that they pay their bank back more than the renters pay- very common here. In affect trying to make you feel guilty or they trying to up the rent. A couple have even shown me their repayment slips as proof- but what am I meant to do.

Thus why Landlord always want you to purchase from them- saying they need XYZ to pay the bank and would like a little extra. But in reality they know they a lot better off just to get the money back to pay the bank, so they are not losing money every single month. Yet some hold onto the hope that a rich Farang or Thai will come along and be their savior from debt.

One thing about buying the houses that banks forclose on, sometimes the Thai families have refused to move on and I have been told that the bank makes it your responsibility to throw the family out onto the street. As they do not want this hassle. Thus agents try to sneak potential buyers into the property for a look. I have been told some very stories in relation to agents trying to get into houses that are locked up like a fortress.

My 2 cents.

:jap:

[macsurf]

By all means scour the bank listings. Just know that the best properties never hit the listings. They are snapped up by bank employees and their 'friends/agents' to either own themselves or cut a deal.

[jackr]

On an approx 5 Mio house you only get rental income of approx. 100K Bt pa

You'd need to double that for a 5 mil place in a decent gated/guarded moobahn. Don't know where you live but you would get that on a 2mil place in Land & House, Mae Jo. The neighbour across the road rents his out at 19k a month, about 4 mil, and they go upward from there. The run of the mill ones (where Thais also rent), 3 bed, 2.5/3mil, around 12/15k. In a tatty area, perhaps you could get a 5 mil place for 8k a month, but it'd probably be unfurnished and underwater.

Agree with looking at the banks though, or drive around an area you like and look for the bank placards on the gates. They can be negotiated with and can often do a mortgage.

[justmaybe]

If he doesn't expect a baronial estate, for 5-6 mil baht cash (which he is careful to declare) your brother will have a number of options in Chiang Mai, save for actually owning the property or getting some sort of bank loan to float it. The logic that property values should increase in time given increasing scarcity makes perfect sense to me, but it doesn't seem to work that way in practice for dwellings in northern Thailand, at least in my experience. Is it different elsewhere in the Kingdom?

[chiang mai]

If he doesn't expect a baronial estate, for 5-6 mil baht cash (which he is careful to declare) your brother will have a number of options in Chiang Mai, save for actually owning the property or getting some sort of bank loan to float it. The logic that property values should increase in time given increasing scarcity makes perfect sense to me, but it doesn't seem to work that way in practice for dwellings in northern Thailand, at least in my experience. Is it different elsewhere in the Kingdom?

Yes I agree, the best you can hope for in the North is that you will break even and live rent free for the period that you've owned the property. Slightly different here in Phuket where prices do seem to increase but not across the board, as always it's location location and appearance.

[sarahsbloke]

Like everything in the world, prices only increase where resources are scarce.

Phuket has limited land, hence prices rise.

Chiang Mai edges have unlimited building land, hence prices rise little

Costs do rise within the moat as land is limited.

PS

On KoolpuntVille 9 just beyond Hang Dong you can buy a very nice 4 bed house (all with en suite) and a maid's room for just over 3Million bht.

Price increases

As a small example, I live in a 3 bed house on a nice Moobaan near Doi Saket. When I rented 8 months ago the landlady asked if I would like to buy for 1.7 million bht. She would now like to sell for 1.5 million bht. In 8 months a drop of 200,000bht and in that time nobody has ever come to look at the house.

Rather oddly

She has decided to raise the rent from 7,000bht to 8,000bht a month, so she will soon have an unrented and unsaleable property on her hands. I just looked at another house on the same estate ..... 6,000bht a month.

...... about 1/3 of the properties on the Moobaan are vacant or abandoned.

Edited October 7, 2010 by sarahsbloke

[prism]

5 mil baht will buy a very nice house in the Hang Dong corridor.

Just my 2 cents worth:

Before you buy your house, go to the location a couple of times in the middle of the night and check if there's any Karaoke joints wailing away nearby. They can make your life miserable.

Get the biggest lot you can afford, land prices usually appreciate even if your house doesn't.

You'll appreciate being near a Market, especially a supermarket that sells imported foods like Rimping.

Be realistic, treat the property as a nice place to live and not for it's investment value. Be happy if you break even if you sell it later.

Condominiums that foreigners can own make a much better investment, especially in Phuket, Pattaya or Bangkok but you can do okay in CM.

[cheynewalk]

Why buy? With 5 million baht invested in a term deposit for 5 years in a bank in Australia you could earn over 7% interest per annum. That's 350,000 or nearly 30,000 baht/month. You could rent a nice place with that and still have your money safe. Bloody hel_l, you could almost LIVE in Chiang Mai for that.

[chiang mai]

Can we get back on track, the question posed is "what is the current state of the CM housing market", are properties changing hands and if so, in what sort of volume, my take is that the market is very quiet but others say not.

[gotlost]

New one off single homes are being built but not at a great amount. Track homes as I would call them are being built but also not at a great speed. Any kind of second hand homes are not moving. This is Chiang Mai, not Pattaya, Bangkok or Phuket. Also I do not see any new condo projects.

[chiang mai]

New one off single homes are being built but not at a great amount. Track homes as I would call them are being built but also not at a great speed. Any kind of second hand homes are not moving. This is Chiang Mai, not Pattaya, Bangkok or Phuket. Also I do not see any new condo projects.

That's what I thought, ta!

[Thighlander]

Thais do not want a home owned by a foreigner. They will also have a very difficult time getting a loan right now. The foreign market is slow due to the currency situation. I know of some homes that have been on the market for several years.

Paying 4 million baht to live next door to a barking dog is not a good idea. Every year, Thailand seems to become less investor friendly. It's amazing that they can still walk, after shooting themselves in the foot so many times. I estimate there are 10 million townhomes in Thailand that need renovation. Last hardware store I walked by had four workers sitting down with zero customers. I woud be more than happy to invest, and hire thais, and use thai materials to do the job. Government red tape does not appeal to me. It's plenty bad in my home country, and that's even doing it in English.

[Thaifan2]

I think that its over stated about Thais not buying 2nd hand .As far as Ghosts go they just get the monks in to do a blessing on the house they have bought .They probably tend to buy new because its easier to get a mortgage on a new home .

I have just bought a 4 bedroom detached house myself ( 6 years old ) in a gated community for B1.45 M .Its in the San Sai area and houses seem to sell quickly enough on this estate .

[sarahsbloke]

I went out today to look for a rental place (3 bed for 5000-7000bht a month)

Along the 118, went into a few MooBaans near the Cosmo petrol station.

3 bed house in Thai Moobaan (both rundown) 1.2 million bath for quick sale

5 bedroom palace in abandoned Moobaan (for sale by bank) less than 2 million bht, they phoned me back about 10 times in the next half hour, offering me this place and all sorts of others.

Really classy Moobaan, new 3/4 bedroom house with huge lawn, 2.6 million bht, or secondhand one 2.4 million bath.

Very little is moving, some sellers very optomistic on prices, like to sell or rent to foreigners, as they seem to consider foreigners very stupid ....... they will pay double what Thais will pay.

[Cnxforever]

If he doesn't expect a baronial estate, for 5-6 mil baht cash (which he is careful to declare) your brother will have a number of options in Chiang Mai, save for actually owning the property or getting some sort of bank loan to float it. The logic that property values should increase in time given increasing scarcity makes perfect sense to me, but it doesn't seem to work that way in practice for dwellings in northern Thailand, at least in my experience. Is it different elsewhere in the Kingdom?

you are correct - I am currently selling my old house and will more or less be able to get my money back no profit at all even though land prices have risen a good 30-40 % since we bought.

I could have asked more and wait but there is just to much of an oversupply - the new owners will be very happy as they can move into a well maintained house with all the trimmings they don't have to spent a dime for extras - even get a nice mature garden of 200 m2.

What many people forget is that new houses don't come with anything and Thais usually don't mind living in a minimal furnished building, aircons, water pumps, kitchens, fittings and so on add up in the end.

Problem for second hand houses is a certain big developer who has destroyed prices in Chiang Mai and more or less killed the second hand house market - they have developments all over and target first buyers selling two story houses for between 1.2 -1.6 million including 50-55 w2 of land - first buyers usually don't see all the hidden costs.

Also they do not see things like 8 meter wide roads when they check out the land plots it looks quite nice - when all the houses are built 8 meters does suddenly not look so wide anymore and with their tiny land plots of around 50-60 sw2 they all park outside and you can't get your car out of your driveway. You have to pay maintenance fees - often for nothing as maintenance is not exactly a Thai thing and pay for guards who are fast asleep 24/7.

After living in 4 different Moo Baans over the years I have had enough.

That's why I decided not to live in a "Moo Baan" again - I think I must have looked at all of them over the last 2-3 years looking for a larger house.

What I have seen is totally overpriced usually with your neighbor living 4 meters away from you with a great view into your living or bedroom!!

Even the more upmarket ones with their posh entrances sell more or less the same houses with (and I don't know why!!! ) half a car park - have you noticed you can either park your front or back half in there never the entire car - and one bedroom which is big enough to call it a bedroom - the other "bedrooms " one can usually squeeze a bed in and that's it, kitchens usually far to small and land parcels insufficient for a nice garden - but of course you can choose a larger plot for just 20.000 -30.000 Baht extra a w2!

So if you are lucky you get a house in the 300 m2 range for 5 million and you still have no garden in a country where the weather is nice enough to spent 90 % of your time outside!!

[jayinoz]

Why buy? With 5 million baht invested in a term deposit for 5 years in a bank in Australia you could earn over 7% interest per annum. That's 350,000 or nearly 30,000 baht/month. You could rent a nice place with that and still have your money safe. Bloody hel_l, you could almost LIVE in Chiang Mai for that.

100% agree- Online Saver in Aussie making 7%- done and done.... safe and secure.... instant access anytime- it is brilliant.

Rent- well depending on the area it sounds like and whether u get a good deal or not is MAX 4% yield. You should get around 3%...

Money to spare on actually living.

Try out renting for 12 months and then make your choice I suggest.

Anyway you have a lot of options from many different perspectives now.

I do not believe the Maejo rates of near 20K pm, for a 4 mil place- as it over 5% yield---you are being seriously DONE. I think some people did not look around hard enough.

I always hear many have paid far too much and been suckered in by an agent or whatever.

Why do you think these Agents really only advertise for Farangs? Go drive around and see the little signs on the gate- there is a SHOCKING number for rent and sale.

As I said however with a sale the owner cannot sell for less than they owe the bank- better deal to be had on a rental... Over supply.

Supply far outweighs demand- thus around 3% yield, if not less.

My 2 cents.

[clokwise]

After reading this thread I'm wondering now if my home would sell if I put it on the market. We're heading back to Australia for 5 years, after which we may return to CM. We had been thinking to rent out our house while we were away, but we'd definitely sell for the right price.

We built it on a 1200 m2 plot of land just off Kampangdin Rd right off the moat - definitely not in a moobaan, and on a quiet dead-end soi. It's 3-bed, 2 stories, very private compound with a high wall around, a well maintained tropical style garden with large leafy trees around three sides of the house (we have more garden than house) with two salas, a two-car carpark, and a swimming pool. If we sold it, everything inside comes with the house including all the furniture, electronics, and Yamaha grand piano. We'd price it between 15~20m baht. It's definitely not the usual home you see in these parts!

Fortunately we don't need to sell it, but we're also not attached to it. So I wonder if there is a market for this kind of home, especially one this close to the city?