Two Tier Pricing

[pauljones]

We looked at a condo project last week. On nice unit had a price of 21 million or the agent said we can put it in a Thai name for 14 million.

Is that common?

[steelepulse]

Probably due to the 51/49 rule. Only 49% of units can be sold freehold to foreigners, so they need to offload the 51% to Thais. I'm sure most of the profit is gained by the sale to foreigners, while the sale to Thais covers costs plus a bit.

Edited April 9, 2011 by steelepulse

[Delight]

Why pay 21 M when you can get it for 14m

For certain you should NEVER allow the developer to organise the Thai Company -This company being set up to buy the condo.

This happened in the condo where I live and the developer had given 51% of both the ownership and the voting rights to his (the developer) wife.

The downside to the company route is approx. 12000 Baht p.a. in audit fees.

Caveat Emptor -Buyer Beware

[chachachacha]

why anybody would pay that amount for a flat in a third world country

Edited April 9, 2011 by chachachacha

[Delight]

why anybody would pay that amount for a flat in a third world country

At the risk of going 'Off Topic '

why anybody would pay that amount for a flat-I would presume because he/she is happy to do so.

third world country( Thailand)

According to Wikipedia-The economy of Thailand is an emerging economy

Edited April 9, 2011 by Delight

[johnnyk]

Want to see the 3rd world? Cambodia is next door, basically a rice and sewing-machine economy at this time.

Thailand is not a 3rd world country anymore its a NIC - Newly Industrialized Country. Great transportation infrastructure, good medical/dental services available, rapid transit lines, mostly clean water, plenty of food etc.

Edited April 9, 2011 by johnnyk

[chachachacha]

Want to see the 3rd world? Cambodia is next door, basically a rice and sewing-machine economy at this time.

Thailand is not a 3rd world country anymore its a NIC - Newly Industrialized Country. Great transportation infrastructure, good medical/dental services available, rapid transit lines, mostly clean water, plenty of food etc.

Do you have a white stick? Have you ever looked round the corner to see the slums ? Do you not see the poverty of the vast majority of Thais .

I'll tell you what don't answer about the stick I already know you have 1 because nobody can be that blind. Dear me. Prob never been away from BKK. But most of BKK is a slum. Mostly clean water ? There is allot of places that haven't got water . They have got dentist . Yes they will pull a tooth for the equivalent of 3 days wages. Rapid transit lines ? it takes 14hrs to go from BKK to Laos by train dear me. Have you ever seen the trains ? or are you on about the Sky train . Well BKK again.

Now stop being foolish

[chachachacha]

why anybody would pay that amount for a flat in a third world country

At the risk of going 'Off Topic '

why anybody would pay that amount for a flat-I would presume because he/she is happy to do so.

third world country( Thailand)

According to Wikipedia-The economy of Thailand is an emerging economy

Just google Bangkok slums pics if you cant be bothered going out to see for yourself . There is worse than that . I can assure you

Edited April 9, 2011 by chachachacha

[Jingthing]

The premium for foreigner owned condos is real and rather justified in condo buildings with heavy foreign demand. However if you can find a nice condo with little foreigner demand, I don't think there should be a premium and I personally wouldn't pay it.

[Delight]

why anybody would pay that amount for a flat in a third world country

At the risk of going 'Off Topic '

why anybody would pay that amount for a flat-I would presume because he/she is happy to do so.

third world country( Thailand)

According to Wikipedia-The economy of Thailand is an emerging economy

Just google Bangkok slums pics if you cant be bothered going out to see for yourself . There is worse than that . I can assure you

Perhaps you could advise Jimmy Wales of this startling discovery which in your view completely contradicts all other global thinking about Thailand -if you can be bothered.

[trogers]

Why do some people only consider the purchase price and not also how difficult it may be to sell off the same property in the future, at whatever the discounted price?

[Delight]

Why do some people only consider the purchase price and not also how difficult it may be to sell off the same property in the future, at whatever the discounted price?

'I want it-I want it-I want it-that's it I want it- Screw the future-life is for now'

Are typical considered arguments when purchasing property.

That said certainly not by all

[haveaniceday]

Want to see the 3rd world? Cambodia is next door, basically a rice and sewing-machine economy at this time.

Thailand is not a 3rd world country anymore its a NIC - Newly Industrialized Country. Great transportation infrastructure, good medical/dental services available, rapid transit lines, mostly clean water, plenty of food etc.

And using carrier pigeons for 3G !!!!

[haveaniceday]

Want to see the 3rd world? Cambodia is next door, basically a rice and sewing-machine economy at this time.

Thailand is not a 3rd world country anymore its a NIC - Newly Industrialized Country. Great transportation infrastructure, good medical/dental services available, rapid transit lines, mostly clean water, plenty of food etc.

And using carrier pigeons for 3G !!!!

[chachachacha]

Perhaps you could advise Jimmy Wales of this startling discovery which in your view completely contradicts all other global thinking about Thailand -if you can be bothered.

I don't need some idiot to tell me what my eyes see . Now did you look at the Bangkok slums ?

[chachachacha]

Perhaps you could advise Jimmy Wales of this startling discovery which in your view completely contradicts all other global thinking about Thailand -if you can be bothered.

I don't need some idiot to tell me what my eyes see . Now did you look at the Bangkok slums ?

[lannarebirth]

I'm not sure I would call Thailand 3rd World. Internationaly it ranks 30th in GDP, just ahead of Greece and Denmark and just behind Iran and Argentina.

[chachachacha]

I'm not sure I would call Thailand 3rd World. Internationaly it ranks 30th in GDP, just ahead of Greece and Denmark and just behind Iran and Argentina.

Do you not believe what your eyes see ? Or do you just not understand that in Third world countrys there is a elite that make vast sums but that don't make it not third world .

Edited April 10, 2011 by chachachacha

[janverbeem]

Thailand is not a 3rd world country anymore its a NIC - Newly Industrialized Country. Great transportation infrastructure, good medical/dental services available, rapid transit lines, mostly clean water, plenty of food etc.

Well that's how it is written in the books,and that is because it has a big export market,but in real life it looks a bit different.

Edit to add : Since it is called a NIC now because of it's export market,does also mean that it loses it's subsidies for commodities ,which makes the population even more poor.

Edited April 10, 2011 by janverbeem

[Delight]

Gentleman .

Can we return to the topic instigated by the O/P ie Two Tier Pricing

Thanks

[Darrel]

The premium for foreigner owned condos is real and rather justified in condo buildings with heavy foreign demand.

In Pattaya, at least, not all new builds have a premium for farang units. VT don't, for example, nor does the place doing the 66 condo to name just two. Those that do have a premium often put it at 10% or less. So 50% seems extreme.

I have not worked out whether the missing premium here is just an unmentioned discount on the list price that is available for non-farang units, or whether there are plenty of Thais (or Thai-farang couples) buying at full price, or whether it is just that many non-farang units end up getting sold in company name anyway. Or a combination of all three.

For resale, the spread between farang name and company/Thai name on the asking price often seems to be around 10-20% though it is very variable. The selling price spread may well be higher.

[Delight]

I am convinced that 2 Tier pricing as a policy does not exist.

What does exist is market forces.

The farang wishes to buy at the lowest price that he can

The developer wishes to sell at the highest price that he can

The developer capitalizes on the 49%/51% rule and attempts to work it in his favor.

Only the developer knows how much of the 49% is available. The farang buyer is not privy to that data..

That gives the developer an advantage in this game.

In the specific case detailed by the O/P , based on what he stated-a condo in the 49% is available.

It is simply now down to his buying skills to purchase in the 49% allocation -but at the lower price quoted i.e. The 51% price

If he really knows his stuff he could probably buy in the 49% at a price even lower than that quoted to him in the 51%... That is the best deal for tO/P

If the O/P feels that he lacks experience then employing the serves of a skilled buyer will be appropriate.

The skilled external consultant will ,for a fee, secure the best deal .

He will know how to play one developer off against another(the 'another' will in all probability not exist)

Edited April 11, 2011 by Delight

[PattayaParent]

In Pattaya, at least, not all new builds have a premium for farang units. VT don't, for example, nor does the place doing the 66 condo to name just two. Those that do have a premium often put it at 10% or less. So 50% seems extreme.

I have not worked out whether the missing premium here is just an unmentioned discount on the list price that is available for non-farang units, or whether there are plenty of Thais (or Thai-farang couples) buying at full price, or whether it is just that many non-farang units end up getting sold in company name anyway. Or a combination of all three.

For resale, the spread between farang name and company/Thai name on the asking price often seems to be around 10-20% though it is very variable. The selling price spread may well be higher.

Please post the price list in Thai for the 66 Condo.

[Jingthing]

Yes, market forces. Not sure about VT's new unit policy, but for resales, yes there are two levels of pricing, with foreign owned being perceived as more valuable.

[Delight]

Yes, market forces. Not sure about VT's new unit policy, but for resales, yes there are two levels of pricing, with foreign owned being perceived as more valuable.

In this situation the lower price will be the benchmark. Given that I would prefer the foreign condo -I would attempt to convince the seller that Thai owned or foreign owned was absolutely of no interest to me.

I would declare my motive as my having an interest in a particular feature that the foreign owned condo offered, that was not available by the Thai condo -better view -nearer to exit stairs(or further away from the exit stairs as appropriate) -liked the room number etc,

I am prepared to pay a higher price than that asked for Thai owned condo -the extra would reflect the benefit to me for this 'particular feature'

(It can be anything -it only has to be convincing to the seller.)

(If i have to buy in haste -then my position is weakened)

It is still ,in my view, only about buying skills and selling skills -not about perceptions

Edited April 11, 2011 by Delight

[Jingthing]

That's total bull. The foreign owners KNOW they can get more than a comparable Thai owned one from a foreigner. You are more talking about finding desperate sellers, and yes, sure they exist.

[Delight]

That's total bull. The foreign owners KNOW they can get more than a comparable Thai owned one from a foreigner. You are more talking about finding desperate sellers, and yes, sure they exist.

In the buying and selling game the motto is 'Never Assume'

No seller will ever state that he is desperate.

The trick is to is ensure that you as seller or buyer is not desperate

I stand by by earlier post-all of it

[Darrel]

Please post the price list in Thai for the 66 Condo.

Sorry, I dont have it. I wasn't interested enough in the building to keep it.

But when I was in there last week I was specifically told that there was no price differential. I have to assume they were telling the truth as otherwise the entire business becomes totally suspect. Which it may well be, of course.

I have seen the price list for several VT buildings and there is no supplement on that. Of course, there may well be unmentioned discounts available for Thai or company name.

[Darrel]

I am convinced that 2 Tier pricing as a policy does not exist.

You are wrong. It most certainly does exist and is clearly visible on many new build price lists. There are quite simply two columns of prices: one for Thai/company name and one for farang name. Not all buildings do this though.

As to whether the difference extends to resales, and how flexible the list price of new builds or the asking price of resales is, that depends on the bulding and the circumstances of the vendor and cannot be quantified until someone actually pays for a unit.

As far as I'm concerned there are very few fixed prices in Thailand and just because some xeroxed price list says "x million Baht" does not mean very much at all in the end, so it is all down to negotiation. However, buildings that are very popular with farangs are not going to be so easy to negotiate with when it comes to buying a farang-name unit at Thai-name price.

[Delight]

I am convinced that 2 Tier pricing as a policy does not exist.

You are wrong. It most certainly does exist and is clearly visible on many new build price lists. There are quite simply two columns of prices: one for Thai/company name and one for farang name. Not all buildings do this though.

As to whether the difference extends to resales, and how flexible the list price of new builds or the asking price of resales is, that depends on the bulding and the circumstances of the vendor and cannot be quantified until someone actually pays for a unit.

As far as I'm concerned there are very few fixed prices in Thailand and just because some xeroxed price list says "x million Baht" does not mean very much at all in the end, so it is all down to negotiation. However, buildings that are very popular with farangs are not going to be so easy to negotiate with when it comes to buying a farang-name unit at Thai-name price.

I am not suggesting that 2 price lists do not exist.

If it is a new condo, then the building cost is excatly the same be it ground floor or a higher floor.

The asking price will be different on each floor.

Sellers will use every device to get the higher price-That's all

The buyer has to use every device to get the lower price.

The word Policy implies that everything is cast in stone. When it comes to price nothing is cast in stone.