Building 'Bubble' In Chiang Mai!

[KeyserSoze01]

jaidee sounds more like jaded to me.

what bubble? There is a boom in building why does it need to be a bubble. Developers are trying to build and accomadate for growth.

There is a need for housing and many housing developments are booked in advance.

I am pleased to see new growth, I wonder why when you see development you think of the worst.

Because history has a tendency to repeat itself.

[hellodolly]

One thing for sure they never learn from the past,and it seems like

its happening all over again, but thats OK ,even with over supply,

repossessions,the prices of property never seems to fall,its another

fact in mysterious Thailand

regards Worgeordie

What is that "they" haven't learned from the past, please share.

That the buyers are not there. Look at all the houses just sitting unoccupied. There is condo's that have stopped building because they ran out of money. People who buy before the buildings are done are complaining because all of a sudden the time table is two years behind. After living here for 6 years I have learned one thing about buying a condo. Make sure it is built and check as much (munch to you) as you can to see that it will be maintained. Remember you are a forigner and the paper work even if prepaired with the help of a lawyer can mean very little.

[uptheos]

Maybe this "bubble" will burst and the Baht will plummet.

Against what........other plummeting currencies?

[hellodolly]

Maybe this "bubble" will burst and the Baht will plummet.

One can always hope.

[chiang mai]

One thing for sure they never learn from the past,and it seems like

its happening all over again, but thats OK ,even with over supply,

repossessions,the prices of property never seems to fall,its another

fact in mysterious Thailand

regards Worgeordie

What is that "they" haven't learned from the past, please share.

That the buyers are not there. Look at all the houses just sitting unoccupied. There is condo's that have stopped building because they ran out of money. People who buy before the buildings are done are complaining because all of a sudden the time table is two years behind. After living here for 6 years I have learned one thing about buying a condo. Make sure it is built and check as much (munch to you) as you can to see that it will be maintained. Remember you are a forigner and the paper work even if prepaired with the help of a lawyer can mean very little.

I agree, but not much of that has anything to do with the 1997 collapse, that was my only point.

[jaideeguy]

" Build it and THEY will come!!" is the Thai way of speculating, but all you have to do is look at the half finished projects of the last bubble to see what can and does happen. It's sad that the simple fact is that most of these 'crackerbox'

houses that actually do get completed are only good for 5-7 yrs becuse of cheap materials, cheap labor and lack of planning. Hard to find a house over 5 yrs old without 'settlement' cracks and tiles falling off, roofing sagging, drains clogged, just to mention a few flaws.

A smart buyer would buy a 5 yr old house that has settled and most of the problems will have revealed themselves and some can be renovated at half of the price of a new house

We own and live in one of the failed developments [built in the big bubble] that will never recover their losses and I find that to my personal advantage that less than 5% of the lots are occupied and it's a peaceful and quiet place to live, but the developers are loosing big time.

I see more of these ghost developments in the future.....time will tell.

[Jobo]

How unfortunate. The place was a hell hole when all those Bangkokians moved here during the floods and now we have the prospect of them moving here permanently.

From conversations I have had with Thai's from Bangkok it seems that since the flooding down there many of the rich folk are choosing to buy a second home up here. That could certainly explain a lot of the new developments - that do indeed seem to be selling...

[Johpa]

Residential real estate seems an odd choice for money laundering. It is better to build a commercial enterprise, a cash generating enterprise, a resort for example, which you then rent out the rooms to non-existent customers on a recuring basis. But the residential ghost towns with the abandoned or never occupied houses, these are usually investment scams. The first one I was privy to was back in the late 1980s and targeted teachers in Chiang Mai who bought useless real estate out towards Sankampeng. My brother in-law, his girl friend, and many of their friends, all lcoal teachers at the time, fell for that one.

[letitbe]

I believe it is something to do with talk of anti money laundering laws that might be introduced.

Means some people are trying their best to plough it into building just in case.

I believe it is something to do with talk of anti money laundering laws that might be introduced.

Means some people are trying their best to plough it into building just in case.

Thailand's main income im sure is not tourism or rice or industry but black money or money laundering IF youve got millions due to whatever illegal trade where best to put it but in a country run by crooks

[SausageKing]

Maybe we are all wrong? Maybe as Myanmar is to open up the their country that Burmese builders in here will want to go home and there are 7.000.000 in Thai? just food for thought. So lets build quick.

Edited June 10, 2012 by SausageKing

[chiang mai]

There's no doubt that the loss of construction workers back to Myanmar will impact the building trade at some stage, particularly in the South in places such as Phuket, doubtless there will be overall impact at some point. But I would find it very odd for CM builders to undertake a rash of building projects in advance of that event although nothing should really surprise me here any more!

[Berkshire]

Home builders are in business to make money. If they are building, it certainly means that there are buyers. If there's any sort of "bubble" brewing, it's going to be the speculators who lose. These are people buying to rent or hoping that their investment goes up in value. But as we all know, Thais prefer to buy new homes as opposed to used ones. Used homes can sell, but only if the price is far below market value. I should say that about the only people willing to overpay for used homes and condos are newbie farangs. So there may be a market there afterall.

Quote: " I should say that about the only people willing to overpay for used homes and condos are newbie farangs."

+1 I know farangs in the 2nd hand condo flipping business who hard sell (like lying used car salesmen) to any available ignorant off shore contacts interested in getting on the Chiang Mai express. The availability of non bar girl university coeds is frequently used as a topic of social discussion. This acts as a primary motivator / selling point to avoid or completely ignore the inflated asking prices.

Funny....and so true.

[xylophone]

I think that both Worgeordie and chiang mai are right in their own ways. Foreign money was invested in Thailand, as well as Thai banks borrowing from overseas sources, and lent out in part to finance the property boom. Foreign debt includes money borrowed from many sources, including commercial banks, other financial institutions as well as investment funds and so on.

There certainly was a property boom then, and it went bust in a big way and you can still see the results of this in many derelict developments around the country.

I live in Phuket and I fear that there is a property boom in place, which will only result in a bust. There have been shophouses, apartments and the like empty for many years here and still more are being built. One poster suggested that because builders are in business to make a profit they must know what they are doing, however here they are building hotels and apartment blocks "on spec" i.e. building them where there is no specific buyer and then putting them up for sale.

Sometimes they sell and sometimes they don't, but it is alarming at the rate in which they are now going up, some beside developments which were abandoned only 2 or 3 years ago and have now become overgrown with weeds.

There appears to be no sense in what is going on in Patong, for example, and it will only be a matter of time before it all comes crashing down because someone has to lose.

Off on a tangent I admit, however I wonder how much of this is going on in other areas in Thailand?

[kaptainrob]

I think that both Worgeordie and chiang mai are right in their own ways. Foreign money was invested in Thailand, as well as Thai banks borrowing from overseas sources, and lent out in part to finance the property boom. Foreign debt includes money borrowed from many sources, including commercial banks, other financial institutions as well as investment funds and so on.

There certainly was a property boom then, and it went bust in a big way and you can still see the results of this in many derelict developments around the country.

I live in Phuket and I fear that there is a property boom in place, which will only result in a bust. There have been shophouses, apartments and the like empty for many years here and still more are being built. One poster suggested that because builders are in business to make a profit they must know what they are doing, however here they are building hotels and apartment blocks "on spec" i.e. building them where there is no specific buyer and then putting them up for sale.

Sometimes they sell and sometimes they don't, but it is alarming at the rate in which they are now going up, some beside developments which were abandoned only 2 or 3 years ago and have now become overgrown with weeds.

There appears to be no sense in what is going on in Patong, for example, and it will only be a matter of time before it all comes crashing down because someone has to lose.

Off on a tangent I admit, however I wonder how much of this is going on in other areas in Thailand?

I agree with that... Patong through to Kamala is crazy, far too much development. Last few years many of the big resorts, other than those with direct beach access and adjacent nightlife or shops, have put off staff and closed their doors except for Peak season.

Apartment developments on Kamala's Millionaires Mile have stalled yet the ICON high-rise on Naka hill (poor outlook) is still going ahead ... maybe the Absolute touts are flogging that one! 555

[tango]

Not just building but they seem to be selling as well!

So True!

Lots of new housing estates, and they are selling well. The new estate just beyond the Chinese cemetary off Chotana near the Super was sold out. Even as I had just discovered it last month, the last home sold in the 3-4 million baht range. Mostly Thai buyers.

Just purchased a double lot in Siriporn. This company is currently well into developing its 10th estate, a more 'modern' take. Land prices are competitive, but twice the price of their 7 and 9 estates.

Had preferred the area near Lanna Hospital but land prices for a 100 rai have escalated in the last 2 years alone to 3 million. For that amount you can purchase a new house with land, for instance in the smart lanna-style estate currently under construction near Meechok Plaza.

On Chotana past Toyota beside the sharp-looking government treasury, the least expensive house starts at only16 million Baht. They would not divulge who besides the Shinawatres are their potential customers; but they seem very confident.

[xylophone]

Not just building but they seem to be selling as well!

So True!

Lots of new housing estates, and they are selling well. The new estate just beyond the Chinese cemetary off Chotana near the Super was sold out. Even as I had just discovered it last month, the last home sold in the 3-4 million baht range. Mostly Thai buyers.

Just purchased a double lot in Siriporn. This company is currently well into developing its 10th estate, a more 'modern' take. Land prices are competitive, but twice the price of their 7 and 9 estates.

Had preferred the area near Lanna Hospital but land prices for a 100 rai have escalated in the last 2 years alone to 3 million. For that amount you can purchase a new house with land, for instance in the smart lanna-style estate currently under construction near Meechok Plaza.

On Chotana past Toyota beside the sharp-looking government treasury, the least expensive house starts at only16 million Baht. They would not divulge who besides the Shinawatres are their potential customers; but they seem very confident.

Sometimes all is not as it seems when new developments are "sold out" especially at the lower price bracket because they are being bought by Thai speculators, mostly to rent out. A huge development of shophouses and apartments in a nearby town was mooted as being sold out almost immediately they were offered up for sale, and now they have been finished for almost a year, less than 1% are currently inhabited!!

At the time the development started, local real estate agents were pointing to it as proof that the housing market was very buoyant, I wonder what they're saying now.

[JohnGreen]

Not sure if this is related but I was at the Or Bor Tor office in Hangdong a couple of weeks ago and was informed that zoning laws are about to be changed so big developers are rushing projects through.

[anto]

My misses would like me to buy a little 'holiday home' in or around CM.

The number of deserted homes on many moobaans is unbelievable, but the prices are still astronomic.

We looked at some condos a few weeks ago, a brightly coloured 'rebuild on the right, as you drive to Doi Saket (shortly after the 121 lights). Prices from 160k and up ....... they are having trouble selling them. Plenty of places in town starting at 200k.

We also have some friends (foreigners) trying to sell in the CM area, nothing second hand sells unless at 'fire sale' prices.

The brightly cloured Condo block is Spanish place i believe .They just coloured 2 blocks and left the rest .Two blocks have been left as a shell with no windows for as long as the project was built ,maybe 20 years .The place looks decripet with no security at the main gate ,and the gate house falling down.

No wonder they are only looking for small money .

The places you mention in Town for B200,000 are also the very old and falling down kind .One i saw was PP Condo not too far from the Railway station .

A reall creepy place .If you want a half decent Condo you have to pay B1 m at least .

[TommoPhysicist]

The brightly cloured Condo block is Spanish place i believe .They just coloured 2 blocks and left the rest .Two blocks have been left as a shell with no windows for as long as the project was built ,maybe 20 years .The place looks decripet with no security at the main gate ,and the gate house falling down.

No wonder they are only looking for small money .

The places you mention in Town for B200,000 are also the very old and falling down kind .One i saw was PP Condo not too far from the Railway station .

A reall creepy place .If you want a half decent Condo you have to pay B1 m at least .

You've had a look too.

Security in Thailand is about as much use as a chocolate teapot. Not a worry. for me

The creepy place has a 'fishbowl massage' on the entire first floor, some might see that as a bonus.

[Rinrada]

....and you cant get a plasterer or chippy for love or money...gotta do it myself......thats not the idea?

Wheres my trowel?

[elektrified]

I think there is the possibility of a bubble.

About 3 weeks ago I had to go to an area of C.M. that I had not been before. A series of villages in an area across from the Big C at the far end of the Super Highway. A soi alongside the track where driving schools practice winds around an area of remote villages. They are building condos like crazy around there and some are even asking as high as 2.89 million THB. Who would pay that much to live in such a remote area with chickens running around out front and villagers sitting around drinking lao khao?

The construction that is going on is overkill IMHO. I don't see how they could sell all the properties under construction now. There are failed projects and vacant homes everywhere already. Many of the business/industrial shopfronts that were completed a year ago or more are still vacant.

[TommoPhysicist]

Here is an almost empty housing project, about 1,000 houses built with government funding.

Asking price 390k, move in for a deposit of 1k ....... almost no takers.

http://maps.google.c...33d91b9c31eec01

Just have a 'street View' of the project.

And Another one, only 5 houses built (this was a sell plot you build scheme)

http://maps.google.c...33f509b60bfa08f

And one more, all houses built, all deserted (no doors or windows fitted).

http://maps.google.c...33fad0cd0be85db

These three estates are all just beyond Hang Dong.

Edited June 11, 2012 by TommoPhysicist

[KeyserSoze01]

All I know is what I see on the housing websites for CM. There are literally hundreds of brand new, furnished homes listed on these sites, all with very reasonable prices, even before any negotiations. Not so in other areas of Thailand. This spells bubble to me.

[Thighlander]

you don't see the low down like here in the US. That is a huge factor in the default rates.

It looks like they are going to build a lot of condos in chiang rai.

Edited June 11, 2012 by Thighlander

[Thailand]

Not sure if this is related but I was at the Or Bor Tor office in Hangdong a couple of weeks ago and was informed that zoning laws are about to be changed so big developers are rushing projects through.

I had heard something similar happening in July and that it would result in land prices going up by 20% in some areas. But no confirmation.

[chiang mai]

The right product in the right location will sell quickly and easily and give the impression of great demand, the wrong product in the wrong location (Tommo!) willl sit empty and/or half built and give the impression of no demand at all. So, when you cite the examples, please be clear about what you're looking at.

[thaimiller]

Will the agreement that Asean Countries will get the same buying rights as Thai's in Thailand from 2015 have anything to do with it? May be forward thinking.

[KeyserSoze01]

Will the agreement that Asean Countries will get the same buying rights as Thai's in Thailand from 2015 have anything to do with it? May be forward thinking.

With Thais being as anal as they are about foreigners owning land in their country, I'm sure this will go over like a fart in church.

[worgeordie]

Will the agreement that Asean Countries will get the same buying rights as Thai's in Thailand from 2015 have anything to do with it? May be forward thinking.

With Thais being as anal as they are about foreigners owning land in their country, I'm sure this will go over like a fart in church.

Yes Foreigners been the Usual Suspects, regards Worgeordie

[lannarebirth]

Will the agreement that Asean Countries will get the same buying rights as Thai's in Thailand from 2015 have anything to do with it? May be forward thinking.

Is that true? I'm aware that 2015 ushers in an era that those seeking employment are free to work anywhere in the region but I hadn't heard about any freeing up of land? Got a link to any relevant info by chance?