Property Pricing Rising ?

[think_too_mut]

If farangs are irrelevant in local markets how do you explain the discrepancy in property values in such places as Pattaya. All open markets are driven by cash availability and demand. Supply is enormous in Thailand, but not where the people with the incoming cash wish to live. Prices increases in tourist areas are based more on property values in UK, Oz, USA, etc than Thailand.

On my way to BKK early December I red in the Economist that properties in Australia and UK are 50% (even 52%) overvalued and it may take 10 years of so to correct themselves (by not rising or rising very slow).

In Pattaya and Bangkok, I checked "second hand market" - there are thousands of condos for sale many with little chance of ever being inspected wih their price tags.

A Pattaya resident (an owner of a small building with 20 apartments) told me all the hype started with Euro being adopted in continental Europe and everything in the UK outrageously expensive anyway.

Then farang real estate agents poured into Pattaya and blew it all up.

In Pattaya's View Talay 5 or six or whatever (next to Pattaya Park) there are units for 12 million now. According to the state of works at some construction sites, there may be thousands (if not more than ten thousand) "View Talay" type condos released within same 6 months span. Will be interesting to see how quickly they get absorbed.

Edited January 9, 2006 by think_too_mut

[SamuiRes]

I can only speak for Samui of which I have first hand knowledge.

The market here is almost exclusively foreign driven - there are a few Thais investing but mostly it is foreigners. They are investing for a variety of reasons. We have seen many expats living in the Far East - Hong Kong, Japan, Korea etc who are on good salaries with good annual bonuses. They do not want to repatriate their money to their homeland and see the ownership of a property on Samui as somewhere they can visit easily for a vacation - even a weekend with direct Hong Kong flights but also rent out to cover their costs.

We are seeing retirees who are looking for an alternative to Spain and Portugal, which has a cheap cost of living and available health care. Samui now has four International Hospitals plus the Government Hospital.

From an investment point of view Samui has a very strong rental market and not just from Europeans. More and more Koreans, Chinese and Japanese are coming here on vacation now.

Land prices have increased dramatically and it is difficult to see how that is sustainable. However, I thought that three years ago and it still continues. One reason is that there are some poeple who have come here and found a piece of land they like and paid whatever is necessary to get it, even if it flies in the face of the local market. Comparisons are made with what can be bought in their home country which is not the correct way to do it, but it happens all the time.

I believe that in the short term, supply now exceeds demand here - especially with all the off-plan developments and I am not sure all of those will be built. Longer term I think everything will sell, but the developer has to have sufficient weight to last out.

[cclub75]

there may be thousands (if not more than ten thousand) "View Talay" type condos released within same 6 months span. Will be interesting to see how quickly they get absorbed.

They probably will...

Thai people might be fool on numerous points, but they have the -good- ancestral belief that "real assets" are always better than paper money.

The rich people here are loaded with cash... They invest everything they can... To possess a few condos, even if you can't rent them or resell.... well it's just "mai pen rai".

Better to have bricks and mortar than bricks of THB in paper.

I saw many condos, empty since the completion of the building... never decorated, never rented... for more than 10 years for some. But of course still available for sale at a crazy price.

Of course there is a bubble (simply compare the price with the yield when rented...)... But once again the market here is really different compared to western countries, even if we see the same effects (price rising etc.).

[steveromagnino]

there may be thousands (if not more than ten thousand) "View Talay" type condos released within same 6 months span. Will be interesting to see how quickly they get absorbed.

Thai people might be fool on numerous points, but they have the -good- ancestral belief that "real assets" are always better than paper money.

The rich people here are loaded with cash... They invest everything they can... To possess a few condos, even if you can't rent them or resell.... well it's just "mai pen rai".

Better to have bricks and mortar than bricks of THB in paper.

Perhaps true, but I doubt Thai people are buying in View Talay much; this is the one back on the hill next to the main road?

I'd say this has all the makings of another farang expat 'ghetto'/slum rather than Thai style; could not see a BKK family buying something like that. Although I have been wrong many times, and could be wrong with this one as well?

[The Skipper]

When terrorism reaches Bangkok, prices will start tumbling.

[Heng]

Why would developers want to lower prices? Maybe, and just maybe if there was a disease or war that wiped out a substantial portion of the population.

[Thaipwriter]

I still dont get why anyone would want to invest in property or land in Thailand if repatriating money (getting their money out of Thailand and back to their homeland) is so difficult. This limiting factor will therefore always restrict the profitability of investments and until I get an answer Im not putting any of my money into Thailand until someone tells me a clear and easy way of how to get it back out again should I need to.

Provided you brought the funds into Thailand correctly, ie throught the banking system and obtained a Tor Dor Sam certificate from the bank, you can repatriate those funds without any difficulty. The funds must come in in foreign currency and be converted to Thai Baht here and you must state that the funds are for investment in Thailand. As and when you wish to send the funds back you simply go to the bank with the Tor Dor Sam and make the transfer. I have done this for clients on more than one occassion and know it works.

Now, assuming your investment has been wise and you have actually made a profit, you would expect to pay tax on that profit and if you provide the Tax Certificate from the Revenue Department you can freely repatriate those funds as well.

A very positive recent experience with repatrating Baht to England

I recently sold my house and car and put 2.9 million baht in my SCB account.

I have online banking with SCBeasy.net and did 3 transfers of GBP (for just under the limit of 20,000US$ eqiv) from my laptop here in Thailand. SCB charge 300 baht per transaction. The money arrived in the UK the next working day and Barclays charged me £6.01 GBP "incoming handling fee" for each of the three credits. Even better was the fact that when i brought the money into Thaland the exchange rate I got was 75.7 and I got 70.7 now. A tidy profit of 160,000 Baht.......... which was nice

[LaoPo]

It might be of interest to some of you to read this:

Tuesday January 10, 12:17 AM

Soros says global economy may slow in 2007 due to cooling US housing market

http://www.thaivisa.com/forum/index.php?sh...5&gopid=606994&

Good luck to all of you!

LaoPo

Edited January 9, 2006 by LaoPo

[BlackJack]

i have done a lot of foot work over the past few weeks and now have a condo and the rent return is NET 9%

better than the banks

so do your home work and get rewards

when your finished and want to sell up then where theres a will theres a way

[cclub75]

i have done a lot of foot work over the past few weeks and now have a condo and the rent return is NET 9%

better than the banks

so do your home work and get rewards

when your finished and want to sell up then where theres a will theres a way

When you say "net", you're speaking about taxes, right ?

And what about inflation ?

5 % in Thailand.

So your return is... well... good but not amazing.

Do your math too : same amount of money in a fund in Europe or US. Well after inflation and taxes it should be the same. Less the hassle of repairing the air conditionning from time to time...

[Heng]

No real revenue collection in Thailand for a whole potpouri of businesses. Just about everyone I know has various sorts of rental income. The only folks who actually pay taxes on rental income are those with apartment buildings (and even then, there's all kinds of creative accounting that you can use in these cases) that are incorporated businesses within themselves. That is, if you're just renting out a few dozen units (your mileage may vary, depending on the nature of your holdings), you can keep it "informal." And whatever you want to fix or don't want to fix.... feel free to write it right into the contract. Another LOS benefit... no pesky renter's rights or apartment associations.

And again, people like to say it's better to invest in.... Well, there's no hard and fast rule that says it has to be an either/or decision. Invest in as many things as possible and hold LONG.

Edited January 10, 2006 by Heng

[mbkudu]

No real revenue collection in Thailand for a whole potpouri of businesses. Just about everyone I know has various sorts of rental income. The only folks who actually pay taxes on rental income are those with apartment buildings (and even then, there's all kinds of creative accounting that you can use in these cases) that are incorporated businesses within themselves. That is, if you're just renting out a few dozen units (your mileage may vary, depending on the nature of your holdings), you can keep it "informal." And whatever you want to fix or don't want to fix.... feel free to write it right into the contract. Another LOS benefit... no pesky renter's rights or apartment associations.

And again, people like to say it's better to invest in.... Well, there's no hard and fast rule that says it has to be an either/or decision. Invest in as many things as possible and hold LONG.

Wow, someone who finally says it how it is. Thanks Heng.

[Heng]

No worries, Mbkudu.

[Dragonman]

No real revenue collection in Thailand for a whole potpouri of businesses. Just about everyone I know has various sorts of rental income. The only folks who actually pay taxes on rental income are those with apartment buildings (and even then, there's all kinds of creative accounting that you can use in these cases) that are incorporated businesses within themselves. That is, if you're just renting out a few dozen units (your mileage may vary, depending on the nature of your holdings), you can keep it "informal." And whatever you want to fix or don't want to fix.... feel free to write it right into the contract. Another LOS benefit... no pesky renter's rights or apartment associations.

And again, people like to say it's better to invest in.... Well, there's no hard and fast rule that says it has to be an either/or decision. Invest in as many things as possible and hold LONG.

Wow, someone who finally says it how it is. Thanks Heng.

I hope you 2 guys aren't suggesting us law abiding citizens on the forum break revenue laws?

One thing you should remember, however, be a good landlord, as I know from experience if you upset a tenant you will receive a visit from Revenue

[Heng]

No real revenue collection in Thailand for a whole potpouri of businesses. Just about everyone I know has various sorts of rental income. The only folks who actually pay taxes on rental income are those with apartment buildings (and even then, there's all kinds of creative accounting that you can use in these cases) that are incorporated businesses within themselves. That is, if you're just renting out a few dozen units (your mileage may vary, depending on the nature of your holdings), you can keep it "informal." And whatever you want to fix or don't want to fix.... feel free to write it right into the contract. Another LOS benefit... no pesky renter's rights or apartment associations.

And again, people like to say it's better to invest in.... Well, there's no hard and fast rule that says it has to be an either/or decision. Invest in as many things as possible and hold LONG.

Wow, someone who finally says it how it is. Thanks Heng.

I hope you 2 guys aren't suggesting us law abiding citizens on the forum break revenue laws?

One thing you should remember, however, be a good landlord, as I know from experience if you upset a tenant you will receive a visit from Revenue

By all means, be a good landlord. Revenue visits though, are the last thing that most (not all, depending on the nature of your business) business owners are concerned with. The revenue department here doesn't have teeth. It's not like the IRS back home, which some people feel are more like a police force.

As for paying FULL taxes, I'm talking creative accounting, not breaking the law.

[think_too_mut]

As for paying FULL taxes, I'm talking creative accounting, not breaking the law.

For example - making 20% of the rent look like "furniture renting" that is differently or not taxed at all.

In my apt in BKK, wardrobes and long study desk are bolted in, the bed head also.

On the monthly invoice the rent is one item, "furniture renting" is another line.

Even if I did not want the furniture - it can't be removed but is still so basic fitting that nobody would insist.

So, technically and legally - the landlord is clean but still saving on tax.

[Heng]

Yes. And also just about any business -not all of course- where you get a receipt that is handwritten and says "cash" on top, as opposed to the printed cash register receipts with your biz info on it (and even then, there's two-steppin' that can be done).