Cost Of Housing In Phuket

[Will1]

Like I said a long term property investment will reward more than a bank .

dam_n well should too.. The risk factor and lack of liquidity.

We also take risks with banks, they are only doing the same with our money.

Try making your own Investment and you will find equity .

[petercallen]

Of course everyone would like to invest in Phuket, But simply don't have the money to play with.

Thats a false statement.

I am part of everybody. And wouldnt like to invest in Phuket.. and have the assets to do so.

I am the same as you, except i love living here.

I would never invest here the way things are, and there is no way i would speculate in the current real estate market.

[thaiwanderer]

We bought two places in Patong in 1987, they have been a total headache and if we'd sunk that money into something in Australia we'd have made a fortune. We now can't get rid of them

But is that because they in particular were a bad buy - which you could have equally have made in Austrailia?

[petercallen]

We bought two places in Patong in 1987, they have been a total headache and if we'd sunk that money into something in Australia we'd have made a fortune. We now can't get rid of them

But is that because they in particular were a bad buy - which you could have equally have made in Australia?

Logbags is right, if he had invested money in real estate in Australia he would have made a lot of money.

Investing long term with the right property even with the ups and downs in the market you always come out well in front

There are two ways of investing in real estate, long term where you buy property in the right area after you have done your

homework and just keep it.

The other way is when property is gaining in value very rapidly because of a shortage of supply, you buy property and sell

it before the market peaks.

Phukets economy relies on tourists, not only did it reach a peak here about 3/4 years ago where you no longer had to wait

for a house/apartment to be built or buy of a spec builder the recession hit and took the buyers away

The recession is not over yet in a lot of countries where the previous buyers came from.

[LivinLOS]

Phukets economy relies on tourists, not only did it reach a peak here about 3/4 years ago where you no longer had to wait

for a house/apartment to be built or buy of a spec builder the recession hit and took the buyers away

The recession is not over yet in a lot of countries where the previous buyers came from.

I personally dont think Phukets any where close to a peak, I also think the acceleration of forces will actually get stronger and stronger.. But I balance that with the fact that I think its now bordering on (or at, or past ?) over developed and for me personally represents a lowering of desirability rather than increasing. But I would bet London to a brick there will be more farang residents in 2015, even more in 2020, etc..

At the same time as that tho, I agree that there is massive oversupply in the lower end crappy quality kind of homes, and that a large amount of what people call premium, is essentially painting over and adding a tin layer of veneer or nice tiles to low, or what should be low priced builds (or looked at another way builds costing a lot on Phuket for quality that would be far cheaper elsewhere).

What is hard to replicate is the truly top end, clifftop type mansions.. Sure they may have (even multi year) price swings, but those kind of places, with those kind of amenities, climate, and access to a international airport. Those are rare things and will continue to hold appeal to wealthy people.

[LivinLOS]

We bought two places in Patong in 1987, they have been a total headache and if we'd sunk that money into something in Australia we'd have made a fortune. We now can't get rid of them

But is that because they in particular were a bad buy - which you could have equally have made in Austrailia?

It would have to be.. But I would say theres a lot more risk of a 'bad buy' as theres so little zoning and so much luck in what happens around you. Certainly many people bought and sold and made decent enough returns, but I also see many who have held during the exact same period and due to one or another factor, lost out or made zero.

Yes some people saw great 300 400 % returns.. But balanced out with some who made zero, lost the lot, ended up with unlucky high legal fees, or had other issues. Well on balance the returns come down to a much more normal rate of return IMO.

[logbags]

But is that because they in particular were a bad buy - which you could have equally have made in Australia?

Well my story has been told here so many times I thought most would know it. I had the choice of Paradise complex which were going for 1.3 million baht. They wanted big upfront deposits so I said no. I bought two places of the plan for 600,000 each and put down 60,000 baht. Two storey shophouse style places.

The Chinese dude was named Paisarn and he didn't have the funds to finish the project so sold it to a Chinese Haw from Phuket who was the shithouse rat. This guy just says f### you they are all now my properties and land.

We fought him in court for over 10 years and he tried to pay off the judge then pay of the appeals judge etc but nobody liked him as he had cheated many people. He got poisoned and died a painful death in hospital.

His brother flew back from America but was shot dead soon after he arrived. His son was at Uni in London and also got shot dead after he came back so the whole male side of the family was wiped out. The wife and daughter gave everything back and even paid court costs.

We had only paid a deposit so had to finish the building ourselves. Did we lose anything? Not really, but if we had of bought in the Paradise we would have made a fortune. However if my granny had balls she would have been my grandfather.

That's probably why I know so much about the system etc and how it all functions. We locked our lawyer into a contract of 150,000 baht so he worked for 10 years for that. We all felt sorry for him so all gave him a sling as he was so determined to not let this Kaew guy win.

I did little as my late brother in law from Phang-nga was our front man at court. Paisarn turned up after hiding out in Bangkok, he was terrified and trembling. All he did was blame the other guy.

I won't do businees with Chinese people because you cannot cannot trust them, if you turn your back or forget to check something they will burn you. Seen if for 25 years now.

This is why you just don't buy into these projects you see as you are effectively a renter even if your name is on some 30 year lease. What happens if the project gets sold like Villa Santi which has been sold countless times. You gotta trust the new owner aint gunna ramp up all the charges etc.

Half these places are owned by shelf companies set up in Hong Kong or Singapore anyway and your on a hiding to nothing if it all turns pear shaped.

The Chinese are the masters of the "switch the materials game" as it is an old strategy of theirs. You set up a show room or condo built to really high specs but when take all the deposits you build with a lower grade of tiles, wood, fittings etc. Many people are clueless to this until a few months after moving in when tiles fall off walls and cracks appear in the mortar in hot season etc. Then in rainy season wood rot sets in in your brand new fascia on the roof etc etc.

Personally I'd rather buy here in Oz where you get a 7 years H.I.A guarantee and actually own the land your home sits on. My nephew is a high ranking official in the Or Bor Tor in Phuket as is his wife, his daughter studies in Australia and live at my house here. I could do business with him but it aint worth getting involved in all the dramas and bullshit doing business in Thailand requires.

People on here think it is only Farangs who have to deal with all the crap. Thais have exactly the same problems with officials, police and crime. They have to deal with exactly the same things about Phuket as we all do.

I'll try to attach a picture of Soi Paradise as it was getting built.

[logbags]

It would have to be.. But I would say theres a lot more risk of a 'bad buy' as theres so little zoning and so much luck in what happens around you.

Exactly. My places are near Jung Ceylon but they built the Otop market in front and the bloody water treatment place at the side and back. Trying to offload them for 13 million for both. I'd take 10 and run if an offer came.

Just on land position I'll get an earn out of it sooner or later. Buy something in Bang Jo or up around Cherng Talay perhaps.

I'm still dirty on the wife as we could of swapped one for a nice house up on the hill beside the temple. In those days it was considered a bit out of town so the ball and chain said no. A few years ago I went past my places and some guy from Isarn was raising chickens in the place

They have been rented for 20 years but the missus wisely keeps the rent money out of my grasp.....

[petercallen]

Phukets economy relies on tourists, not only did it reach a peak here about 3/4 years ago where you no longer had to wait

for a house/apartment to be built or buy of a spec builder the recession hit and took the buyers away

The recession is not over yet in a lot of countries where the previous buyers came from.

I personally dont think Phukets any where close to a peak, I also think the acceleration of forces will actually get stronger and stronger.. But I balance that with the fact that I think its now bordering on (or at, or past ?) over developed and for me personally represents a lowering of desirability rather than increasing. But I would bet London to a brick there will be more farang residents in 2015, even more in 2020, etc..

At the same time as that tho, I agree that there is massive oversupply in the lower end crappy quality kind of homes, and that a large amount of what people call premium, is essentially painting over and adding a tin layer of veneer or nice tiles to low, or what should be low priced builds (or looked at another way builds costing a lot on Phuket for quality that would be far cheaper elsewhere).

What is hard to replicate is the truly top end, clifftop type mansions.. Sure they may have (even multi year) price swings, but those kind of places, with those kind of amenities, climate, and access to a international airport. Those are rare things and will continue to hold appeal to wealthy people.

Anyone with half a brain would know property values will be increasing by 2015/ 2020

And of coarse there will be more farangs living here

Unless a major depression hits or there is a war

What do you mean quality buildings cost more in Phuket than elsewhere.

Quality buildings are built by qualified trades men and qualified builders using quality materials, how many do you know in Phuket.

Land in developed areas with ocean views is expensive anywhere in the world.

Similar climate an amenities can be found in a lot of places

People who invest long term in developing areas will always come out well in front financially

Short term investors who come into the market at the wrong time will not

[LivinLOS]

Anyone with half a brain would know property values will be increasing by 2015/ 2020

And of coarse there will be more farangs living here

Unless a major depression hits or there is a war

Well I actually think we will have a double dip, and the hardship that this entials, but was mostly the 'at a peak' which I was responding to..

What do you mean quality buildings cost more in Phuket than elsewhere.

Quality buildings are built by qualified trades men and qualified builders using quality materials, how many do you know in Phuket.

ha ha.. Well I have to believe some of them are well built.. But rare I admit.

But yes quality (of whatever standard) is much more expensive on Phuket than other parts of the country. That changes when it comes to fitments like bathrooms I guess as those seem more standardized pricing these days. But the 'build' aspect is what I mean.

People who invest long term in developing areas will always come out well in front financially

Short term investors who come into the market at the wrong time will not

Not the case with 2 of my last 3 landlords.

In fact the 3rd one is probably break even or maybe 20% return since about 04 (something like that anyway).

Edited January 2, 2011 by LivinLOS

[LivinLOS]

People on here think it is only Farangs who have to deal with all the crap. Thais have exactly the same problems with officials, police and crime. They have to deal with exactly the same things about Phuket as we all do.

This I totally agree with, and doubly so if they are not 'phuket people'..

We tend to think its happening because we are farang and being ripped off or miss treated, but the fact is they screw each other just as much.

[logbags]

Quality buildings are built by qualified trades men and qualified builders using quality materials, how many do you know in Phuket.

A Thai mate is an electrician, he says the standard of building at half the villas he works at is <deleted>. He works around Surin, Bang Tao and Cherng Talay.

Most of the workers are Burmese and somebody at the labour department must be grifting a fortune off these illegal workers.

I mean you price a job quoting Thai labour costs then employ illegals at half the price. I think it's called....oh yeah racketeering

All the beach paving in Patong was done by Burmese. No wonder the Mayor can afford to build a 700 room resort.

Attached photo of C and N bungalows in 1980's.

[barka]

Logbags...i think you have opened a lot of the T V posters eyes here...this is what PHUKET Is and has been like...even if you think you KNOW ALL...it can come back and haunt you.....

[petercallen]

Anyone with half a brain would know property values will be increasing by 2015/ 2020

And of coarse there will be more farangs living here

Unless a major depression hits or there is a war

Well I actually think we will have a double dip, and the hardship that this entials, but was mostly the 'at a peak' which I was responding to..

What do you mean quality buildings cost more in Phuket than elsewhere.

Quality buildings are built by qualified trades men and qualified builders using quality materials, how many do you know in Phuket.

ha ha.. Well I have to believe some of them are well built.. But rare I admit.

But yes quality (of whatever standard) is much more expensive on Phuket than other parts of the country. That changes when it comes to fitments like bathrooms I guess as those seem more standardized pricing these days. But the 'build' aspect is what I mean.

People who invest long term in developing areas will always come out well in front financially

Short term investors who come into the market at the wrong time will not

Not the case with 2 of my last 3 landlords.

In fact the 3rd one is probably break even or maybe 20% return since about 04 (something like that anyway).

6 years is not long term

Up to 3/4 years ago property here was increasing in value 20% a year for the previous 6/7 years

The market has changed short term investors will not except the market has changed and live in hope.

Long term is a different matter, i personally am not interested in investing properties here.

[logbags]

Let me tell you 2 quick stories just to show you what Thais have to put up with and how bent it is.

My niece just came home after studying hairdressing for 3 months in Phang Nga. The owner of the beauty school came back with her to study English. We were talking about how the cops were so shameless in Thailand.

My niece said her sister cut down a tree on her land in Krabi and used the wood on her house in Phang Nga. They had some left over so rented a truck to send it back to Krabi.

The cops stopped her truck and said it was illegally cut timber and they wanted 8,000 baht to let it pass. My niece explained it was her wood and said she would show him the tree if he wanted. He said no, his commanding officer wanted 8,000 baht or the wood was his.

Now here's the thing, my nieces father runs the illegal 3 digit lottery in his area in Krabi. He pays this very group of coppers a monthly commision. The very copper who picks up the money was the same guy who stopped them for the 8,000 baht. She said everytime the cops need money for something they come knocking on her fathers door.

He either pays up or they won't let him sell his lottery tickets. Then there is my other nephew, he used to sell drugs to all the fishermen in Phang-Nga. They were provided by the police themselves. The cops were his silent partners. You think it is any different in Patong?

I laugh when I hear people wanting to move to Phang-Nga and Krabi, they are WORSE than Phuket by a long way. My wife bought a parcel of land on a mountain top in Phang-Nga for peanuts. Her friend is a high ranking official and she also bought some land. She then organised for a brand new road to be built to the land increasing it's value ten times.

The whole country runs on kick backs and bribery and if you get involved with the coppers they'll milk you dry. If a farang they'll just organise to set you up like they do in Pattaya. Then you have to pay them to let you go like the guy making the stick movies in Pattaya.

He got caught with a loaded roscoe, opium and his collection of porn- yet still walked.

[NamKangMan]

Many in this thread have posted that property is a good long term investment. In general, I agree with this statement, however, we are talking about Phuket in Thailand. Basically, the house you buy sits upon a plot of land that you do not own. You lease the land for 30 years. So, let's say the property market goes well and in 15 years you want to sell. Who will buy a house with 15 years lease left?

So, the perspective purchaser contacts the Thai land owner to negotiate a new 30 year lease. When the Thai land owner names his price, your sale may fall over. In affect, this Thai land owner controls the sale value of what you think is YOUR house to sell. Who knows what these land owners will demand when these land leases start to come up for renewal. We will see in the next few years as the place boomed in the mid 80's. Another question is, what if they refuse to renew the lease? You are within your rights to bulldoze the house, but then you have nothing to sell.

Many farang have put the land in their Thai girlfirend's/wife's name which poses other risks, but each to their own.

Now, there will be a lot of posts with people stating "I have a 30 x 30." I would remind you that the "x 30" has not been tested at law, to my knowledge, and therefore should not be relied upon.

As I mentioned in a pevious post, there are some loop holes still available that strengthens your claim over the land, but, as mentioned, that could change at anytime. For me, there are just too many variables, all against the farang, for what I call "property possession" as opposed to "property ownership" in Thailand.

Many expats are here to live out their twilight years with no intention of turning a profit or having a need for their property to make a captial gain and that is fine with me.

However, if you purchase property here as part of a business plan or a property/investment portfolio - I would think very carefully about it and practice extreme caution. It is high risk, the contract is not properly enforcable at a Thai Court due to corruption, property zoning can change anytime due to who pays who a bribe and the land your house sits on is not yours.

All this, and much more to consider, before you even try to predict what the market will do in the short and/or long term due to supply and demand.

Edited January 2, 2011 by NamKangMan

[BangTaoBoy]

RE: 'Logbags'

Which is why it cracks me up when so many people, refuse to stop comparing this place to the West. You need to go with the flow, adapt, accept this is not your country and things will never be the same here. That's the very reason this forum is full to the brim with whining and whinging. An inability to accept how things are done in a developing country, on the other side of the world to your own.

Edited January 2, 2011 by BangTaoBoy

[logbags]

RE: 'Logbags'

Which is why it cracks me up when so many people, refuse to stop comparing this place to the West. You need to go with the flow, adapt, accept this is not your country and things will never be the same here. That's the very reason this forum is full to the brim with whining and whinging. An inability to accept how things are done in a developing country, on the other side of the world to your own.

I think the gist of what I am trying to get across is this. In Australia you have the Police and courts which are pretty well run. You have the Ombudsman you can go to if you have any problem with them.

You have your local and federal member of parliament you can go to. I have personally taken on the immigration department and won on a number of occasions with the help of my federal member.

You also have the law reform commision and countless other bodies set up to protect your rights. You have the H.I.A that oversees building insurance and standards etc.

In Thailand you have jack, squat, SFA in terms of getting help unless you have deep pockets and the juice to get something done. Personally, I just act and live like a tourist flying under the radar. Leave the Thais to sort it out as eventually it will have to be sorted.

Nothing corrupted ever changes easily and in Thailand only a major catastrophy will change people's mindset.

[Will1]

Many farang have put the land in their Thai girlfirend's/wife's name which poses other risks, but each to their own.

You have stated some good points, and I do agree with most you have said.

Would you please explain the risks involved.

[wordchild]

Phuket reminds me alot of Barbados 20/30 years ago. I was a regular visitor then (to Barbados) and had friends who bought property there. Many of the problems and issues for the expats there in those days are very similar to those you hear of now in Phuket. And in many ways i think Phuket will develop in a similar way, and for many that will mean it will be a less pleasant place to live esp for those on a tight budget. There has been some serious money made in Asia over the last few years and for HK and Sing based wealthy (incl expats) Phuket , with its good transport links, is an attractive playground. I think you will continue to see significant money coming into Phuket . And it will increasingly diverge in terms of development from other parts of Thailand.

i have a friend who has owned a house on Barbados since about 1985, he rarely goes now and thinks the place has been completely ruined, the people are less friendly , crime has soared ,there are serious water and other enviromental problems, but, the wealthy keep coming and his little house which is 150 metres from the beach and for which he paid next to nothing is now worth a fortune.

Edited January 2, 2011 by wordchild

[madmitch]

Many farang have put the land in their Thai girlfirend's/wife's name which poses other risks, but each to their own.

You have stated some good points, and I do agree with most you have said.

Would you please explain the risks involved.

I also think NamKangMan has made some very good points, particularly with regard to the 30 year lease system. I made a similar comment on a thread some time back. We don't know what will happen. It's not been tested yet, but as a medium term investment surely it's a no-no. The property value must decrease as the lease gets shorter.

And as for the question about the risks involved, I'm surprised it was asked.

May I offer a few answers?

Mysterious disappearance, violent death, unexplained suicide;

Acrimonious split;

Pressure from the Thai family;

Very importantly, if the farang has purchased the land with his money and "given it as a gift" to his teerak, it can easily be construed that the Thai person is holding the land in proxy for the farang and this is illegal in Thailand. The possibility , albeit unlikely, of confiscation is there.

[katabeachbum]

Many farang have put the land in their Thai girlfirend's/wife's name which poses other risks, but each to their own.

You have stated some good points, and I do agree with most you have said.

Would you please explain the risks involved.

I also think NamKangMan has made some very good points, particularly with regard to the 30 year lease system. I made a similar comment on a thread some time back. We don't know what will happen. It's not been tested yet, but as a medium term investment surely it's a no-no. The property value must decrease as the lease gets shorter.

And as for the question about the risks involved, I'm surprised it was asked.

May I offer a few answers?

Mysterious disappearance, violent death, unexplained suicide;

Acrimonious split;

Pressure from the Thai family;

Very importantly, if the farang has purchased the land with his money and "given it as a gift" to his teerak, it can easily be construed that the Thai person is holding the land in proxy for the farang and this is illegal in Thailand. The possibility , albeit unlikely, of confiscation is there.

Confiscation is unlikely, court ordering forced sale within 365 days could happen

Lease is very popular ownership, while registering a loan in land deed makes sure you get your money with "interest" back

and less taxes/fees as long as you dont recieve interest during "ownership"

[stevenl]

I hardly ever agree with the Iceman, it seems we have quite different views, but this time I do agree.

I do wonder though whether we'll see anything happening with the leases in the coming years. I think there are not many people that have leased land from an 'unkown' Thai. Mostly I think it will be in the name of the teerak or a company, either real or started specifically for the land ownership.

[LivinginKata]

I do wonder though whether we'll see anything happening with the leases in the coming years. I think there are not many people that have leased land from an 'unkown' Thai. Mostly I think it will be in the name of the teerak or a company, either real or started specifically for the land ownership.

Yes, it will for sure be very interesting to see how these '30 year extensions' will work out at the end of the initial 30 years. These 'extensions' are written as a civil contract/agreement and if the land owners refuses to extend or makes problems (like demanding a huge amount of money to register another 30 year lease at the land office) then the leasee will have to take the land owner through civil court and I can tell you that can take a very very long time.

[macahoom]

madmitch said: "Very importantly, if the farang has purchased the land with his money and "given it as a gift" to his teerak, it can easily be construed that the Thai person is holding the land in proxy for the farang and this is illegal in Thailand. The possibility , albeit unlikely, of confiscation is there."

I'm interested to know why you think "it can easily be construed that the Thai person is holding the land in proxy for the farang".

Surely if someone gives another person a gift, that gift becomes that person's property, whether it's a box of chocolates in London, a car in New York or a property in Phuket?

[stevenl]

madmitch said: "Very importantly, if the farang has purchased the land with his money and "given it as a gift" to his teerak, it can easily be construed that the Thai person is holding the land in proxy for the farang and this is illegal in Thailand. The possibility , albeit unlikely, of confiscation is there."

I'm interested to know why you think "it can easily be construed that the Thai person is holding the land in proxy for the farang".

Surely if someone gives another person a gift, that gift becomes that person's property, whether it's a box of chocolates in London, a car in New York or a property in Phuket?

The problem is, if you're married and you give your wife the land, you also give it to yourself. So it has to be proven you gave the land before the marriage officially started.

[LivinLOS]

Long term is a different matter, i personally am not interested in investing properties here.

Bit confused.. Have you thrown in the towel on your house hunt ??

Or do you mean (like I mentioned recently) that you dont see buying your primary dwelling as an investment, more as a home ??

[stevenl]

Long term is a different matter, i personally am not interested in investing properties here.

Bit confused.. Have you thrown in the towel on your house hunt ??

Or do you mean (like I mentioned recently) that you dont see buying your primary dwelling as an investment, more as a home ??

I think Peter is confusing even himself.

[Will1]

I do wonder though whether we'll see anything happening with the leases in the coming years. I think there are not many people that have leased land from an 'unkown' Thai. Mostly I think it will be in the name of the teerak or a company, either real or started specifically for the land ownership.

Yes, it will for sure be very interesting to see how these '30 year extensions' will work out at the end of the initial 30 years. These 'extensions' are written as a civil contract/agreement and if the land owners refuses to extend or makes problems (like demanding a huge amount of money to register another 30 year lease at the land office) then the leasee will have to take the land owner through civil court and I can tell you that can take a very very long time.

Yeah, The land owners will increase the price. That is something you can guarantee.

[logbags]

The myth of Thailand being a peaceful Buddhist country is fantasy. Thailand has always had chronic violence, corruption and feudalism.

You must also remember the Chinese run Thailand and they do business with Chinese in Hong Kong, Singapore, the mainlaind and other Chinese worldwide. Half of Phuket is owned by Singapore money so I think the leases will hold up ok. Too many politicians are involved in partnerships funded by offshore money to rock the boat that hard.

Then there is the fact most politicians in Thailand are also of Chinese decent or funded by large family owned companies. Some have billions stashed offshore and own houses worldwide in some cases. Any blatant attempt to cheat foreigners with a law change could be met with a simliar threat by our own countries. Alternatively they could reveal the extent of Thai corruption as a face destroying measure. It could backfire badly on them if the true extent of their plundering ever got out. I'd love to know how much old Banharn has stashed away somewhere.

No, I doubt it would happen unless a zealot or real clean Thai politician ran on a platform of xenophobia against farangs buying up everything. Clean politicians don't exist in Thailand so they have too many skeletons in their own closets to upset investors.

Wikileaks could be interesting if it turned its attention to Thailand, Thaksin and co. Onething the old Chinese 'Jaaw pors' hate is publicity. They like to keep things quiet and hidden.