Pattaya Used Home Market

[englishinsiam]

The house I've liked most so far is in a quiet village off Soi Regional Land. The owner wants 5.3 million. The estate agent told me that he has already turned down an offer of 4.7 million. OK, so maybe I should offer him 5 million? The fly in the ointment is that he has another couple who are interested, and who are not going through an agent so he would not have to pay an agency fee if he sold it to them. That's a 3%-5% saving, say 150K to 250 K Baht, for him. So it seems to me that I am unlikely to get it for very much less than his asking price. For a good quality house in a nice location there's still enough demand to get what you ask, it appears. Supply and demand, I guess. There's no shortage of 32 sqm View Talay style condos, so you can get a cheap deal on them if that's what you want. But a nice bungalow with a beautiful garden close to the centre of town is a different matter, it seems. I think, like you, I will just have to keep on looking.

I agree with the reply above to your post here, that will almost certainly be a sales tactic.

How much do you consider the house to be worth based on your research?

If it's 4 Million Baht don't pay a penny or setang above.

Say to them I really like your house and if the other couple fall through and it's still for sale in 3 months contact me I have 3.8 Million waiting. Say I can't afford the asking price but can push to 3.8 Million. This gives you room to move to your 4 million should you need.

The agent will want a commission and as such if the owner is prepared to move on price then you'll get your home.

There is nothing to stop you trying this with 5 or more owners eventually one will drop.

Your the buyer you have the control in the current marketplace. I speak from experience as I had a property company in the Canaries during the last 2 years of the boom and the next two years of the crash so I've seen both sides of the market.

SCB sometimes have a sale too for homes that owe them money and they effectively just want back what they are owed I didn't have the available cash last time they came round which was a pity they had some serious bargains.

We are looking at a new home on a nice new development in East Pattaya and the developers have already dropped over 200K on a corner plot once we are back in Thailand they are scheduled to call us again and we will surely be offered a further 300K off.

So for under 3 Million Baht we will have a beautiful brand new 3 Bedroom detached home with a nice large lounge (Many of these new developments have small narrow lounges) this one has a nice big wide airy lounge. For us that represents great Value but then it will be a family home for many years.

[SGD]

I've had agents tell me to my face that they wouldn't pass on all offers to the vendor when the same vendor would have loved to receive offers. That either smacks of an agent wanting to maximise commissions rather than achieve a sale but also offers the potential for the agent to persuade the vendor to significantly reduce the price and then have it snaffled off the market by their cronies.

[OlafStapleton]

" . . . 6 years. If I add up the amount of rent I have dished out, I could have bought a modest condo or villa"

are Pattaya rental returns that high for investors? Over 15% pa?

We lease a new house (Chanthaburi) the owner gets a 4.2% gross return per year, six years at those rates would be a deposit, not a purchase in our situation.

Paying rent is money lost for ever . :jap:

Buying a house is money lost forever

1 If house in gf name

2 if rent is 4% house value and other investment return 5% (currently cash in Australian bank returns 6.5%, managed portfolio returns 9%)

[craigt3365]

Buying a house is money lost forever

1 If house in gf name

2 if rent is 4% house value and other investment return 5% (currently cash in Australian bank returns 6.5%, managed portfolio returns 9%)

9% portfolio is never a guaranteed thing....and sometimes, can be negative.

[fredob43]

I dont live in Pattaya but did for several year's. But it's the same where ever you are, have a friend where I live brought a nice House 3/4 bed 3 loo's granite every ware +++, cost 2.25 mil:bt last year they a built a Makro's over the road now cant give it away POSITION POSITION POSITION.

[OlafStapleton]

Buying a house is money lost forever

1 If house in gf name

2 if rent is 4% house value and other investment return 5% (currently cash in Australian bank returns 6.5%, managed portfolio returns 9%)

9% portfolio is never a guaranteed thing....and sometimes, can be negative.

House value can drop too, but at least with a portfolio you can cash out easily.

Even if hold on house (not a given Thailand) can become worthless (failed estate, fall down), you could lose your VISA, etc.

[lovetotravel]

Buying a house is money lost forever

1 If house in gf name

2 if rent is 4% house value and other investment return 5% (currently cash in Australian bank returns 6.5%, managed portfolio returns 9%)

9% portfolio is never a guaranteed thing....and sometimes, can be negative.

House value can drop too, but at least with a portfolio you can cash out easily.

Even if hold on house (not a given Thailand) can become worthless (failed estate, fall down), you could lose your VISA, etc.

If you bought a house that fell down, or in a failed estate, or lost your visa over real estate, you had probably better not be investing either.

[gk10002000]

" . . . 6 years. If I add up the amount of rent I have dished out, I could have bought a modest condo or villa"

are Pattaya rental returns that high for investors? Over 15% pa?

We lease a new house (Chanthaburi) the owner gets a 4.2% gross return per year, six years at those rates would be a deposit, not a purchase in our situation.

Paying rent is money lost for ever . :jap:

Paying rent is "subscription economics". If you rent, you don't have to put out the cash that could otherwise be invested and making you money. If you buy with a Mortgage, you did not "buy". You took out a loan and are now paying interest. I am not trying to compare all the benefits of renting versus buying, but just wanted to point out these points.

[toenail]

Buying a house is money lost forever

1 If house in gf name

2 if rent is 4% house value and other investment return 5% (currently cash in Australian bank returns 6.5%, managed portfolio returns 9%)

9% portfolio is never a guaranteed thing....and sometimes, can be negative.

************************

(I am the one who submitted this post) Reply to above comment: That is why I am not interested buyinga 4-12 million home, I stated about 1.5 million for purchasing a used villa...it adds up to what I have spent on rent the past 6 years. Next, I have money invested and basically I would have been better having it in the bank at a low interest rate or under the mattress.

[BB1950]

The market may be depressed, but your desire is a bit too optimistic. 1.5 million baht for a used villa in Pattaya???

Get real!

It's been over 5 years ago since I saw prices for a 1.5 million baht Thai houses over in the Dark-side, not villas! The price for land has gone up, not down. Even over in the Dark-side. Anymore, I often see old Thai houses torn down to make way for new development because the land is worth more than the houses.

You might be able to find and old Thai house in an old run down community over in the dark-side such as Chok Gaew 9, but it would need a lot or work. It wouldn't be worth it because those houses sit on very small plots, with the houses very close together. You can hear your neighbors in their house. The roads are a disaster! It would be very difficult to get any improvement or repair money back. Any improvements or repairs would raise the cost up. That's why they are in such bad condition. If I recall, they originally sold for about 1.5 million baht 10 years ago!

However if you change you goal for a 2 million baht used Thai house in a Thai community over in the Dark-side, I'm pretty sure it would be obtainable.

But definitely, no villas!

Good luck!

[englishinsiam]

I've had agents tell me to my face that they wouldn't pass on all offers to the vendor when the same vendor would have loved to receive offers. That either smacks of an agent wanting to maximise commissions rather than achieve a sale but also offers the potential for the agent to persuade the vendor to significantly reduce the price and then have it snaffled off the market by their cronies.

Simple then you tell the agent yo won't buy a property with them and providing you've had a viewing and hopefully seen the owner go and see the owner directly.

An agents responsibility is to put all offers to the owner, the agent can still advise them not to accept. And if the agent flatly refuses this is not acting in their clients best interest and you are well within your rights to ignore them and deal with the Vendor directly.

A lot of places has the phone numbers of the owners up as well as the agents no even if the place is empty or speak to the neighbours for their contact details, someone invariably has a number.

When we went looking it was amazing the difference in price people wanted for the same property on the same street. And if they wanted us to go inside without telling us the price we walked straight away.

[englishinsiam]

The market may be depressed, but your desire is a bit too optimistic. 1.5 million baht for a used villa in Pattaya???

Get real!

It's been over 5 years ago since I saw prices for a 1.5 million baht Thai houses over in the Dark-side, not villas! The price for land has gone up, not down. Even over in the Dark-side. Anymore, I often see old Thai houses torn down to make way for new development because the land is worth more than the houses.

You might be able to find and old Thai house in an old run down community over in the dark-side such as Chok Gaew 9, but it would need a lot or work. It wouldn't be worth it because those houses sit on very small plots, with the houses very close together. You can hear your neighbors in their house. The roads are a disaster! It would be very difficult to get any improvement or repair money back. Any improvements or repairs would raise the cost up. That's why they are in such bad condition. If I recall, they originally sold for about 1.5 million baht 10 years ago!

However if you change you goal for a 2 million baht used Thai house in a Thai community over in the Dark-side, I'm pretty sure it would be obtainable.

But definitely, no villas!

Good luck!

I've just sold a half share in a 2 bedroom house just off Soi Muslim on the Darkside total house price 800K it has tenants in place who have been there for years and will probably die there, a lovely Thai family looking after the place.

It brings in 9% rent a year my mate bought my half off me and has a passive income.

The deals are out there

[BB1950]

The market may be depressed, but your desire is a bit too optimistic. 1.5 million baht for a used villa in Pattaya???

Get real!

It's been over 5 years ago since I saw prices for a 1.5 million baht Thai houses over in the Dark-side, not villas! The price for land has gone up, not down. Even over in the Dark-side. Anymore, I often see old Thai houses torn down to make way for new development because the land is worth more than the houses.

You might be able to find and old Thai house in an old run down community over in the dark-side such as Chok Gaew 9, but it would need a lot or work. It wouldn't be worth it because those houses sit on very small plots, with the houses very close together. You can hear your neighbors in their house. The roads are a disaster! It would be very difficult to get any improvement or repair money back. Any improvements or repairs would raise the cost up. That's why they are in such bad condition. If I recall, they originally sold for about 1.5 million baht 10 years ago!

However if you change you goal for a 2 million baht used Thai house in a Thai community over in the Dark-side, I'm pretty sure it would be obtainable.

But definitely, no villas!

Good luck!

I've just sold a half share in a 2 bedroom house just off Soi Muslim on the Darkside total house price 800K it has tenants in place who have been there for years and will probably die there, a lovely Thai family looking after the place.

It brings in 9% rent a year my mate bought my half off me and has a passive income.

The deals are out there

Hmm... I wonder if this is a free standing house or townhouse? The Brits I know, often refer to a townhouse as being a house.

There are many townhouses in that area that originally sold for about 400,000 baht to 700,000 baht. Again because of the poor maintenance in the area, they wouldn't have appreciated much.

Due to a shortage of low cost housing in Pattaya, these kind of dwellings often do offer a good rate of return.

Edited August 5, 2011 by BB1950

[dandare11]

The Property Owner s Observation; ( POO for short) will be the guy coming round to view will be an utter nutcase,however get a few business cards printed and leave it with him. He will think that this is his get out of jail free card. Leave it for a few weeks or months ,you are bound to get a call. Second viewing will be a beer or two with half an hour free with his TGF.;

There is no better feeling than getting shut and passing the problem off to some poor sucker or country bumpkin People who bought houses years ago here have not got a pot to piss in basically ,all they have is the house, they burnt their bridges back 'ome.

Edited August 5, 2011 by dandare11

[TommyDee]

The Property Owner s Observation; ( POO for short) will be the guy coming round to view will be an utter nutcase,however get a few business cards printed and leave it with him. He will think that this is his get out of jail free card. Leave it for a few weeks or months ,you are bound to get a call. Second viewing will be a beer or two with half an hour free with his TGF.;

There is no better feeling than getting shut and passing the problem off to some poor sucker or country bumpkin People who bought houses years ago here have not got a pot to piss in basically ,all they have is the house, they burnt their bridges back 'ome.

people who bought a few years ago, bought at a far better exchange rate than today. essentially they are far better off !

I have 5, all but one is occupied, as to a pot to piss in,, well you may be right but you're not

[Darrel]

Agents here say and do some of the most ridiculous things that I have seen anywhere on the planet.

"There's another buyer ...... the price is going up next week (yeah, right) ........ we are going to buy it ourselves as an investment", I've heard them all and they all sound like barstool fishing stories to me.

As such it wouldnt bother me in the slightest to go straight to the vendor if I thought that an agent wasnt doing his job of passing offers on.

If the vendor doesnt accept a sensible offer (as opposed to the nonsensical asking prices), I would just move on to the next property on the list. OK, if the place you are looking at really is the only one of its kind then you are just going to have to pay what the vendor wants, but in my experience there are thousands of boringly similar properties on the market here, many of them extremely poor quality and badly maintained, and hardly any unique places at all.

[PattayaParent]

The idea that paying rent is losing money is silly if you understand the situation.

As simply as I can put it, imagine two people have a million baht.

Person one invests the money at 6% per year and rents a condo for 60,000 baht per year (5,000) baht per month. At the end of five years, the person still has 1,000,000 baht in the bank.

Person two invests buys a condo for a million baht. After six years, the person has the condo. If the condo is now worth more than a million baht, person two has done better than person one, if not, the reverse is true.

This is an oversimplification, of course, but the basic idea is true and does not align with the idea "rent is wasted."

Now what you need to do is tell us where we can get a 6% return per year on 1 million Baht?

Plus you have to factor in the rent saved by person 2 into his investment return.

Well, Vodaphone pays roughly a 6% dividend, IAPD (asian high dividend etf, very safe stocks) pays about 7%, SKI (utilities etf pays 10% etc etc.

There are also lots of bonds which pay 6% or more, but equities also give you potential capital appreciation.

so, 6%, the eample numver chosen, is perfectly obtainable. but as rental yiled are less than 6% we actually just need 5% or so so compare to, which would be even easier.

Is that 6% dividend before or after tax?

What if the value of the shares fall, you might still receive your fixed income of 6% (or maybe not) but your asset will not be worth as much should you decide to cash in.

[chops]

Why buy? Seems like real estate is somewhat expensive when I compare it to the US. Condos for 50,000+ sq meter? Ripoff.

[vpi78]

The Property Owner s Observation; ( POO for short) will be the guy coming round to view will be an utter nutcase,however get a few business cards printed and leave it with him. He will think that this is his get out of jail free card. Leave it for a few weeks or months ,you are bound to get a call. Second viewing will be a beer or two with half an hour free with his TGF.;

There is no better feeling than getting shut and passing the problem off to some poor sucker or country bumpkin People who bought houses years ago here have not got a pot to piss in basically ,all they have is the house, they burnt their bridges back 'ome.

people who bought a few years ago, bought at a far better exchange rate than today. essentially they are far better off !

I have 5, all but one is occupied, as to a pot to piss in,, well you may be right but you're not

Yes you are absolutely right. Many of the posts on these real estate threads are from renters who failed to buy at exchange rates much more favorable to them.

They are bitter and they often react by posing other scenarios about the dire consequences about what might happen with Thai real estate. But it does make for amusement in the potherwise low/summer season.

Renters ... Please keep posting about your macro and micro economic theories.

[Thaifan2]

>>Condos for 50,000+ sq meter? Ripoff.<<

Not if they are near the beach with a sea view ,and close to down town . :jap:

[koiwaolao]

>>Condos for 50,000+ sq meter? Ripoff.<<

Not if they are near the beach with a sea view ,and close to down town . :jap:

Rip off Rip off Rip off! Condos in Pattaya are outrageously overpriced. Your example of 1700 USD is still moderate for this town. Still, I just googled ONE property on Miami Beach with views, over 100 sqm, 1500 USD per m! In the heart of civilization, transparent ownership and you can even drink the water!

http://www.miamicondoshop.com/featured-listings/cashflow-opportunity-in-north-bay-village

[Darrel]

Many of the posts on these real estate threads are from renters who failed to buy at exchange rates much more favorable to them.

They are bitter and they often react by posing other scenarios about the dire consequences about what might happen with Thai real estate.

Dont forget that most farang condo buyers are not buying with Baht at all: they are buying with money originating abroad. As such today's exchange rate is of profound importance but the rate 5 or 7 years ago is of little interest.

At today's exchange rates Thai property is not cheap by any stretch of the imagination. The world economy is in dire straits. Farang pensions are not secure (and many new buyers here are imminent pensioners). Farang jobs are not secure. There is already a lot of resale and new property for sale, with much more coming.

As such I think that Pattaya resale asking prices could potentially fall quite a lot, but I see little that is likely to make those prices increase in the short or medium term.

Just because a vendor has lived here for 50 years and exchanged his farang money at 300B per whatever to buy his condo 7 years ago, doesnt matter one jot to the guy moving here today. And he's the one digging into his wallet: not the vendor.

[Darrel]

Condos in Pattaya are outrageously overpriced.

Asking prices certainly are. I'm not convinced that many vendors sell (if indeed they do sell) at anywhere near the asking price.

[Thaifan2]

Condos in Pattaya are outrageously overpriced.

Asking prices certainly are. I'm not convinced that many vendors sell (if indeed they do sell) at anywhere near the asking price.

I have just sold my Condo for the asking price . ( the buyer has paid a deposit and fingers crossed they complete ).Thank God /Buddha for the Russians . :jap:

..also sold another Condo in Jomtien 6 months ago ,( also for a realistic asking price to an American )so things are not really too bad for sellers . :jap:

Edited August 10, 2011 by Thaifan2

[morphic]

The idea that paying rent is losing money is silly if you understand the situation.

As simply as I can put it, imagine two people have a million baht.

Person one invests the money at 6% per year and rents a condo for 60,000 baht per year (5,000) baht per month. At the end of five years, the person still has 1,000,000 baht in the bank.

Person two invests buys a condo for a million baht. After six years, the person has the condo. If the condo is now worth more than a million baht, person two has done better than person one, if not, the reverse is true.

This is an oversimplification, of course, but the basic idea is true and does not align with the idea "rent is wasted."

Now what you need to do is tell us where we can get a 6% return per year on 1 million Baht?

Plus you have to factor in the rent saved by person 2 into his investment return.

Well, Vodaphone pays roughly a 6% dividend, IAPD (asian high dividend etf, very safe stocks) pays about 7%, SKI (utilities etf pays 10% etc etc.

There are also lots of bonds which pay 6% or more, but equities also give you potential capital appreciation.

so, 6%, the eample numver chosen, is perfectly obtainable. but as rental yiled are less than 6% we actually just need 5% or so so compare to, which would be even easier.

Is that 6% dividend before or after tax?

What if the value of the shares fall, you might still receive your fixed income of 6% (or maybe not) but your asset will not be worth as much should you decide to cash in.

Yes, prices go up and down. So choose a company with a strong business model, or an ETF that comprises of many good companies.

I can guarantee that there will be times when prices fall and many investors then panic and sell, amplifying the falls even more. But for investors with a solid strategy there is no reason to panic. In fact, drops in price offer an opportunity to buy more.

I have for example held Thai stocks since after SARS and my original purchases have more than tripled in price, perhaps more like quadrupled if I factor in the dividend payments. There have been numerous corrections and sell offs. And just like property owners hold on so do I.

There is an equity market correction right now, maybe even a crash. That is good news. The markets panics and thinks the world has come to an end. But I have a long time scale view, years, even decades. I buy good value stocks with good business models that pay good dividends. I have a constant income stream but yes a variable worth in asset terms, marking to market that is.

So, you either have faith or not, you are either the type that panics or not. Same as property really and if i see a place here that I like enough I will buy it. But I am under no illusions, that money would in fact be better spent on the right equity investments, its just that if I find the right place my analysis will go beyond mere yields and returns.

[tropo]

Just look at the USA. Aaron Spelling's old house was on the market at $150m for two years before being sold for around $85m. Why ? because they finally saw sense.

You have no idea how to sell a house. A house in the $150 million range is hard to price but obviously Aaron Spelling wasn't in a hurry to sell and why should he have been. It's called testing the market. If he had started at $85m how much would he have got? That may have been near his expected target.

One important aspect of selling is making the purchaser feel he is getting a bargain.

Most foreigners owning houses in Thailand own them freehold. They don't have debts to service and can take their time selling. Most likely in many cases they have put a considerable portion of their retirement funds into the purchase. It's no surprise they are slow to reduce prices.

This is why so many people complain that in this current market that prices are still high. Some people think owners should just drop their houses to half price or just take what they can get irrespective of their initial investment.

[craigt3365]

>>Condos for 50,000+ sq meter? Ripoff.<<

Not if they are near the beach with a sea view ,and close to down town . :jap:

Rip off Rip off Rip off! Condos in Pattaya are outrageously overpriced. Your example of 1700 USD is still moderate for this town. Still, I just googled ONE property on Miami Beach with views, over 100 sqm, 1500 USD per m! In the heart of civilization, transparent ownership and you can even drink the water!

http://www.miamicondoshop.com/featured-listings/cashflow-opportunity-in-north-bay-village

With regards to that condo, the area is not that great. Miami has some REALLY bad neighborhoods. You think crime is bad here? Wow...it can be really bad there. Here's a description from someone living near that condo. Not bad, but not great:

http://www.city-data.com/forum/miami/194641-whats-like-north-bay-village-living.html

I did a quick search for Miami also. 155 sqm on the beach:

http://www.miamirealestate.com/listings/392838/Miami-Beach/Seaside-Villas/15811-Fisher-Island-Dr--15811

Only 6.5M USD asking price. And that is about 1/2 of the most expensive ones I saw...though they were much larger.

If you've got money, Miami Beach is nice. If you don't...well...it's not a cheap place to live.

I like realtor.com. Searched for condos and had to go through almost 5000 condos before I got to ones priced at $160k USD.

http://www.realtor.com/realestateandhomes-search/Miami_FL/type-single-family-home,condo-townhome-row-home-co-op,mfd-mobile-home/pg-10#/listingType-condo-townhome-row-home-co-op/pagesize-50/pg-1

[Darrel]

I have just sold my Condo for the asking price ................

..also sold another Condo in Jomtien 6 months ago ,( also for a realistic asking price .........

Congrats.

But I think that "realistic" is the key word here.

Many asking prices are not realistic at all, and any sale is likely to be at a much lower price. Places at realistic prices (which might be 20-50% lower than the unrealistic ones) probably sell for near the asking price and I have tracked a few of these over the last few months.

Of course, on the websites it just says "condo - X MB - sold" but doesnt indicate whether it sold at X or at a much lower Y. And so people erroneously assume that if one unit sold at X then the one next door must be worth X also. Y never appears in print, yet Y is the only meaningful figure.

[TexasRanger]

I see a lot of places in "East Pattaya" 2 bedroom houses fro between 1 & 2 Mil, is it because you need transport to get around or is there something else about that place. I was looking at a condo in Jomtien to stay occasionaly instead of renting but if we could get a nice small cheap house for under 2 Mil that would be cool, we have a car so thats not a problem. Is East Pattaya viable or is there something we should know?

[Darrel]

....... I just googled ONE property on Miami Beach with views, over 100 sqm, 1500 USD per m! In the heart of civilization, transparent ownership and you can even drink the water!

http://www.miamicond...rth-bay-village

On inspection, that unit isnt on a beach, nor does it seem to be anywhere near any shops, banks, restaurants etc.

So basically you need to drive to get anywhere at all. And I'm not sure that even having driven you would necessarily be anywhere very nice. So maybe you would need to compare that with something quite a way out of town here, where prices would be much cheaper.

At least here for that money in Jomtien you would be on a semi-decent beach, only 3km to the centre of one of the country's largest cities, and a 5 minute (safe) walk to shops and services, and less than 2 hours from a very busy international airport.

Farang-name condo ownership here is transparent, and I drink the water (once it has been through a reverse osmosis machine).

From what I have seen there may be some better bargains to be had in Hawaii than in Miami.