Building 'Bubble' In Chiang Mai!

ARISTIDE · June 12, 2012

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

Baht will plummet = more Farang move here?

ARISTIDE · June 12, 2012

Still nothing compare to China, almost half of the fancy house and condo are empty (built by gov)

" 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.

xylophone · June 12, 2012

Are we in a bubble? How high is high?

A year ago a mate told me I was crazy to buy a condo. That condo has increased in value, and I see no reason why it should not continue to. As far as I am concerned, Chiang Mai has a long ways to go to "catch up" to the development of Phuket, Ko Samui, Pattay and BKK.

This is where the money is flowing right now. Are you going to stand on the side yelling its a bubble, or jump in and enjoy it? I am not saying to speculate, but buying to own a home is not a bad idea in my opinion. Bubble or no bubble.

I know people paying 30K per month for a rental. You pay that for 10 years and its 3.6M baht that is gone. You buy a chunk of real-estate now thats 3.6M and I bet ya in 10 years it will be worth a lot more than 3.6M. Inflation here will make sure of that. And inflation there will be, as where will all the baht come from for the flooding infrastructure and tablets in every school? Print they will.

I don't know your particular circumstances, so cannot comment upon your particular case, however there would be many a farang who has bought a house/condo and now measures it's worth based on something similar which has sold nearby. Just because one purchaser or two decides to pay over the odds, it doesn't necessarily mean that others nearby will sell for the same. In addition as has been pointed out on many occasions, Thais in particular do not like buying anything second-hand so that immediately limits the second-hand market.

Your comment as regards paying rent is very valid and for those folks that rent, they offset the validity of your argument against being able to "up roots" when they want to, flexibility, freedom and the fact that they don't have to have a vast sum of money tied up in real estate which they may or may not be able to sell when they want to. Add to that the fact that Thailand is not particularly "farang friendly" when it comes to things like owning land, staying in the country, 90 day reporting for retirees and so on and you have another good reason to want to be able to move somewhere else when and if you want.

In my opinion, any Thai government is potentially stupid enough to further limit the right of farangs to be here or to tax them out of existence in the hope of getting some easy money, because that's the way they are. The ability to move at the stroke of a pen, in my opinion, is thereby of paramount importance to me................ as for others, I couldn't comment, however it is not without foundation that you will see the oft repeated quote, "don't invest any money in Thailand that you cannot afford to walk away from/lose".

hellodolly · June 12, 2012

Are we in a bubble? How high is high?

A year ago a mate told me I was crazy to buy a condo. That condo has increased in value, and I see no reason why it should not continue to. As far as I am concerned, Chiang Mai has a long ways to go to "catch up" to the development of Phuket, Ko Samui, Pattay and BKK.

This is where the money is flowing right now. Are you going to stand on the side yelling its a bubble, or jump in and enjoy it? I am not saying to speculate, but buying to own a home is not a bad idea in my opinion. Bubble or no bubble.

I know people paying 30K per month for a rental. You pay that for 10 years and its 3.6M baht that is gone. You buy a chunk of real-estate now thats 3.6M and I bet ya in 10 years it will be worth a lot more than 3.6M. Inflation here will make sure of that. And inflation there will be, as where will all the baht come from for the flooding infrastructure and tablets in every school? Print they will.

I don't know your particular circumstances, so cannot comment upon your particular case, however there would be many a farang who has bought a house/condo and now measures it's worth based on something similar which has sold nearby. Just because one purchaser or two decides to pay over the odds, it doesn't necessarily mean that others nearby will sell for the same. In addition as has been pointed out on many occasions, Thais in particular do not like buying anything second-hand so that immediately limits the second-hand market.

Your comment as regards paying rent is very valid and for those folks that rent, they offset the validity of your argument against being able to "up roots" when they want to, flexibility, freedom and the fact that they don't have to have a vast sum of money tied up in real estate which they may or may not be able to sell when they want to. Add to that the fact that Thailand is not particularly "farang friendly" when it comes to things like owning land, staying in the country, 90 day reporting for retirees and so on and you have another good reason to want to be able to move somewhere else when and if you want.

In my opinion, any Thai government is potentially stupid enough to further limit the right of farangs to be here or to tax them out of existence in the hope of getting some easy money, because that's the way they are. The ability to move at the stroke of a pen, in my opinion, is thereby of paramount importance to me................ as for others, I couldn't comment, however it is not without foundation that you will see the oft repeated quote, "don't invest any money in Thailand that you cannot afford to walk away from/lose".

Every one has different needs and they change with age.

for myself I absolutely refuse to buy any thing I can not walk away from.

At my age I enjoy the freedom that I never had when owning things dictated to me what I had to do.

Then again their are the younger people who are still needing money to get to the point where it is not a priority and many of them have made a lot of money in speculating and many lost a lot of money in speculating.

There is not one physical reason for staying in Chiang Mai. I can move else where and have nothing holding me back.

It is indeed a building bubble and when it does burst there will be a lot of sad people. But as has been pointed out they will own their own residence. Even if it stops going up in value.

Edited June 12, 2012 by hellodolly

letitbe · June 12, 2012

Are we in a bubble? How high is high?

A year ago a mate told me I was crazy to buy a condo. That condo has increased in value, and I see no reason why it should not continue to. As far as I am concerned, Chiang Mai has a long ways to go to "catch up" to the development of Phuket, Ko Samui, Pattay and BKK.

This is where the money is flowing right now. Are you going to stand on the side yelling its a bubble, or jump in and enjoy it? I am not saying to speculate, but buying to own a home is not a bad idea in my opinion. Bubble or no bubble.

I know people paying 30K per month for a rental. You pay that for 10 years and its 3.6M baht that is gone. You buy a chunk of real-estate now thats 3.6M and I bet ya in 10 years it will be worth a lot more than 3.6M. Inflation here will make sure of that. And inflation there will be, as where will all the baht come from for the flooding infrastructure and tablets in every school? Print they will.

condos in Bangkok which were 4-5 million 10 years ago are now going for 2-3 million. I know we bought 5 in Bangkok between 2000-2002 at an average price of around 4.5 million and sold them between 2009-2010 for about same we paid for them and now they would be 30-40% + less

letitbe · June 12, 2012

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?

is Burma or Laos part of that deal. If it is great my Thai wife can then buy in Burma and Laos.

pipo1000 · June 12, 2012

Not so difficult to understand.

Look at the situation in your homecountry 50 years ago, doesn't matter which western country you're from, and you will notice that exactly the same scenario was going.

You realise that Thailand is the western world 50 years ago,don't you?

letitbe · June 12, 2012

Are we in a bubble? How high is high?

A year ago a mate told me I was crazy to buy a condo. That condo has increased in value, and I see no reason why it should not continue to. As far as I am concerned, Chiang Mai has a long ways to go to "catch up" to the development of Phuket, Ko Samui, Pattay and BKK.

This is where the money is flowing right now. Are you going to stand on the side yelling its a bubble, or jump in and enjoy it? I am not saying to speculate, but buying to own a home is not a bad idea in my opinion. Bubble or no bubble.

I know people paying 30K per month for a rental. You pay that for 10 years and its 3.6M baht that is gone. You buy a chunk of real-estate now thats 3.6M and I bet ya in 10 years it will be worth a lot more than 3.6M. Inflation here will make sure of that. And inflation there will be, as where will all the baht come from for the flooding infrastructure and tablets in every school? Print they will.

I don't know your particular circumstances, so cannot comment upon your particular case, however there would be many a farang who has bought a house/condo and now measures it's worth based on something similar which has sold nearby. Just because one purchaser or two decides to pay over the odds, it doesn't necessarily mean that others nearby will sell for the same. In addition as has been pointed out on many occasions, Thais in particular do not like buying anything second-hand so that immediately limits the second-hand market.

Your comment as regards paying rent is very valid and for those folks that rent, they offset the validity of your argument against being able to "up roots" when they want to, flexibility, freedom and the fact that they don't have to have a vast sum of money tied up in real estate which they may or may not be able to sell when they want to. Add to that the fact that Thailand is not particularly "farang friendly" when it comes to things like owning land, staying in the country, 90 day reporting for retirees and so on and you have another good reason to want to be able to move somewhere else when and if you want.

In my opinion, any Thai government is potentially stupid enough to further limit the right of farangs to be here or to tax them out of existence in the hope of getting some easy money, because that's the way they are. The ability to move at the stroke of a pen, in my opinion, is thereby of paramount importance to me................ as for others, I couldn't comment, however it is not without foundation that you will see the oft repeated quote, "don't invest any money in Thailand that you cannot afford to walk away from/lose".

if you consider 2-3 million a vast amount of money then unless your young you wont be able to live here to long at least with

a decent lifestyle. You can buy perfectly good 3 bedroom 2 bathroom homes here in most parts of thailand for 1.5-2 million. In fact you can buy quite nice homes 30 kmt outside of BKK for less than 1 million baht. Of course most forang with want to be

hiso wifes pay many times more. I always find it amusing that the wifes of those forang consider us poor because we have a modest 5 million baht home but many times more million baht in investments when I know their husbands have put every penny into their houses and are shit scared they will loose it all while watching their incomes fall more and more. all the time their

wifes are still spending on guchi handbags Prada shoes the new car (in debt) and the rest while their wimpy husbands despair

about the rapidly deteriorating finances. When I say we I mean my thai wife. I gave her 90% of our money many many years ago once I was convinced she understood about money management. No she's not Thai chinese, not rich came from slums

and as far as I know never worked in a bar but ive never asked since its irrelevant.

If you intend staying here buy what you can comfortably afford and if you dont trust your partner dont marry her and buy a condo in your name.

thaimiller · June 12, 2012

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?

sorry I dont, my wife read it on the daily news website about 2 weeks ago but we were unable to find the link last night when we looked for it.

richard10365 · June 13, 2012

My wife and I just bought a new house in Chiang Mai. It's very nice. It's better than any place I ever lived in the United States. The quality of the house was a major reason to buy. The location is great for us.

Chiang Mai is a great city in an awesome location situated at a time right before (2015) the AEC comes into existence. There is a lot of growth happening all over the city and this region. Lots will change in 2015 and many new opportunities will appear with the FTA. This growth people are calling a bubble is the actions of people who are aware of this coming change. The change is not something people are thinking about doing, it is something that is done already and signed into law.

If you want to understand the changes, then study up about ASEAN and the AEC. Or you can wait and try to catch up later.

dionys · June 13, 2012

For some reason bubbles in Thailand do not burst, do not fade away, and do not disappear. They hang on, get older and become part of the permanent landscape. Could never understand this.

JeffreyMcCollum · June 13, 2012

Not so difficult to understand.

Look at the situation in your homecountry 50 years ago, doesn't matter which western country you're from, and you will notice that exactly the same scenario was going.

You realise that Thailand is the western world 50 years ago,don't you?

I'll call it a building boom. And with good reason, just wait and see.

One more than to remember that is not the same as in the west. I paid huge property tax on my home back there, 60,000 Bt a month. Here on a larger home I pay no tax to speak of so I can let it sit as others do, it really cost nothing

pipo1000 · June 13, 2012

Not so difficult to understand.

Look at the situation in your homecountry 50 years ago, doesn't matter which western country you're from, and you will notice that exactly the same scenario was going.

You realise that Thailand is the western world 50 years ago,don't you?

I'll call it a building boom. And with good reason, just wait and see.

One more than to remember that is not the same as in the west. I paid huge property tax on my home back there, 60,000 Bt a month. Here on a larger home I pay no tax to speak of so I can let it sit as others do, it really cost nothing

But that doesn't make it a bubble.

Currently the wages go up in Thailand and a lot of young people move from the farming sector to a job in the city or industry.They all get to earn some money and they all ahve to live somewhere, hence the building boom.

TommoPhysicist · June 13, 2012

Not so difficult to understand.

Look at the situation in your homecountry 50 years ago, doesn't matter which western country you're from, and you will notice that exactly the same scenario was going.

You realise that Thailand is the western world 50 years ago,don't you?

I'll call it a building boom. And with good reason, just wait and see.

One more than to remember that is not the same as in the west. I paid huge property tax on my home back there, 60,000 Bt a month. Here on a larger home I pay no tax to speak of so I can let it sit as others do, it really cost nothing

But that doesn't make it a bubble.
Currently the wages go up in Thailand and a lot of young people move from the farming sector to a job in the city or industry.They all get to earn some money and they all ahve to live somewhere, hence the building boom.

With house prices and wages in Thailand it would seem like a sub-prime disaster in the making.

Wages 10k/month ........ Small homes 1Mbht+ ....... it just doesn't work.

pipo1000 · June 13, 2012

Not so difficult to understand.

Look at the situation in your homecountry 50 years ago, doesn't matter which western country you're from, and you will notice that exactly the same scenario was going.

You realise that Thailand is the western world 50 years ago,don't you?

I'll call it a building boom. And with good reason, just wait and see.

One more than to remember that is not the same as in the west. I paid huge property tax on my home back there, 60,000 Bt a month. Here on a larger home I pay no tax to speak of so I can let it sit as others do, it really cost nothing

But that doesn't make it a bubble.
Currently the wages go up in Thailand and a lot of young people move from the farming sector to a job in the city or industry.They all get to earn some money and they all ahve to live somewhere, hence the building boom.

With house prices and wages in Thailand it would seem like a sub-prime disaster in the making.

Wages 10k/month ........ Small homes 1Mbht+ ....... it just doesn't work.

I think there are a lot of Thai people earning more than 10.000 Baht currently,but to use your figures.

At 1 Million Baht and 10.000 Baht/month salary that translates to 8 years and 4 months salary to pay off a house.

Can you in your home country and at an average job, buy a house for 8 years and 4 months salary?

TommoPhysicist · June 13, 2012

I think there are a lot of Thai people earning more than 10.000 Baht currently,but to use your figures.

Not in CM, even less in the sticks where I live (Nan Province)

10k is the Thai national average .... the mean, not even the median, so about 80% of the population will be getting less than that.

Edited June 13, 2012 by TommoPhysicist

elektrified · June 13, 2012

With house prices and wages in Thailand it would seem like a sub-prime disaster in the making.

Wages 10k/month ........ Small homes 1Mbht+ ....... it just doesn't work.

I think there are a lot of Thai people earning more than 10.000 Baht currently,but to use your figures.
At 1 Million Baht and 10.000 Baht/month salary that translates to 8 years and 4 months salary to pay off a house.

Can you in your home country and at an average job, buy a house for 8 years and 4 months salary?

I would say the average these days is more like 30K per month in wages.

elektrified · June 13, 2012

I think there are a lot of Thai people earning more than 10.000 Baht currently,but to use your figures.

Not in CM, even less in the sticks where I live (Nan Province)

10k is the Thai national average .... the mean, not even the median, so about 80% of the population will be getting less than that.

I disagree with that figure. About 4-5 years ago, yes. But people are making a whole lot more than that these days. Housekeepers, gardeners, etc.

JeffreyMcCollum · June 14, 2012

"With house prices and wages in Thailand it would seem like a sub-prime disaster in the making.

Wages 10k/month ........ Small homes 1Mbht+ ....... it just doesn't work."

"10k is the Thai national average .... the mean, not even the median, so about 80% of the population will be getting less than that."

As I understand it, "Mean" is the middle with half above and half under. Larger cities like BKK, CM, and others it is more, Countryside like Nan where you say your are from it is less.

My neighbors home is about 1m baht. He works as a cook for a Tourist restaurant. He makes 10,000 a month and say it will go up the first of the year 2000 Bt.. Wife works part time at a beauty salon and goes to school part time. and a brother lives there some of the time. With their income of just about 18,000 Bt a month, They easily pay their just over 3000 Bt monthly payment. Lots of government home loan programs around for Thai's

JeffreyMcCollum · June 14, 2012

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

I too have a friend in town who is trying to sell, but he is not realistic in his pricing. Others selling for 700,000 and he want 2.5m He says he did this and that, a bachelor pad, and want to make a profit. Well the market most anywhere is not like that any more, With new builidng next door at fair prices and more amenities, why would someone pay 2.5 when they can get a place next door that has a pool, weight room, better parking, and 50% more space for a lower price new ? He should be happy he lived there 7 years and can make a little profit or break even.

I have not had any problem selling my units, But I do price to sell and not mess around

JeffreyMcCollum · June 14, 2012

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.

My wife and I spend part of our time fixing up homes to sell or rent. So I was excited when I noticed this post and went to look for myself..

First one I thought with 1000 homes would be huge, in that area almost 25% of the town, Had trouble finding it, Finally a postal carrier took us out to see it. Not 1000 homes, more like 200 and about 20% sold. Built under a government program for low income that you must qualify. Depsot of 1000 B is not the closing cost or down if you meet the income guidlines. Home size is about 30 sq.m No real land size to do anything more than park a motorbike, No room for a car or yard to grow things and childrem play. These kinds of Housing projects are full in areas like Pattaya and Rayong where there is lots of factories But this one out in the sticks with nothing around and no job, services, or even a town make it a hard sell.

The others too, Not really in Chaing Mai 30+ km out and 30 - 60 minute drive into town. In time the city will grow out this way, like it did in Mae hia (airport area) and is heading toward Hang Dong.

But us who live out this way like it a little more quiet and town within reach if needed.

xylophone · June 14, 2012

For some reason bubbles in Thailand do not burst, do not fade away, and do not disappear. They hang on, get older and become part of the permanent landscape. Could never understand this.

BUBBLE or BOOM?

One definition of 'Housing Bubble':-

"A run-up in housing prices fueled by demand, speculation and the belief that recent history is an infallible forecast of the future. Housing bubbles usually start with an increase in demand in the face of limited supply which takes a relatively long period of time to replenish and increase. Speculators enter the market, believing that profits can be made through short-term buying and selling. This further drives demand. At some point, demand decreases, or stagnates at the same time supply increases, resulting in a sharp drop in prices - and the bubble bursts".

Maybe Thailand has something akin to a hybrid between boom and bubble. Certainly in my area there is a frenzy of building going on, however not driven by demand, as much remains empty and has done for years. I'm sure that there are areas where lower cost housing is in demand especially from those folk moving from the rural areas to cities, however I wonder how much of this type of property is being bought by investors in order to rent out, rather than speculating on making a profit with a resale, although I have no doubt that some of this goes on.

So some of the components of a bubble are evident, but not all. The crunch will come when Thai investors find that home loans are harder to come by (easy at the moment for a Thai), interest rates increase and mortgage repayments are defaulted upon, coupled with a slowdown in the move to urban environs, and a tourism decline due to the ongoing GFC.

Many new developments will therefore remain unsold and "get older and become part of the permanent landscape" (quote, dionys), so someone will have to suffer financially and that will eventually be the banks, quite possibly taking out many small builders and developers with it, not to mention ordinary folk buying "off plan". Quite probably not a bubble that will burst, but a boom which will lead to bust.

chiang mai · June 14, 2012

For some reason bubbles in Thailand do not burst, do not fade away, and do not disappear. They hang on, get older and become part of the permanent landscape. Could never understand this.

BUBBLE or BOOM?

One definition of 'Housing Bubble':-

"A run-up in housing prices fueled by demand, speculation and the belief that recent history is an infallible forecast of the future. Housing bubbles usually start with an increase in demand in the face of limited supply which takes a relatively long period of time to replenish and increase. Speculators enter the market, believing that profits can be made through short-term buying and selling. This further drives demand. At some point, demand decreases, or stagnates at the same time supply increases, resulting in a sharp drop in prices - and the bubble bursts".

Maybe Thailand has something akin to a hybrid between boom and bubble. Certainly in my area there is a frenzy of building going on, however not driven by demand, as much remains empty and has done for years. I'm sure that there are areas where lower cost housing is in demand especially from those folk moving from the rural areas to cities, however I wonder how much of this type of property is being bought by investors in order to rent out, rather than speculating on making a profit with a resale, although I have no doubt that some of this goes on.

So some of the components of a bubble are evident, but not all. The crunch will come when Thai investors find that home loans are harder to come by (easy at the moment for a Thai), interest rates increase and mortgage repayments are defaulted upon, coupled with a slowdown in the move to urban environs, and a tourism decline due to the ongoing GFC.

Many new developments will therefore remain unsold and "get older and become part of the permanent landscape" (quote, dionys), so someone will have to suffer financially and that will eventually be the banks, quite possibly taking out many small builders and developers with it, not to mention ordinary folk buying "off plan". Quite probably not a bubble that will burst, but a boom which will lead to bust.

Good post, I certainly endorse the highlight above as a potential reason.

el jefe · June 14, 2012

"With house prices and wages in Thailand it would seem like a sub-prime disaster in the making.

Wages 10k/month ........ Small homes 1Mbht+ ....... it just doesn't work."

"10k is the Thai national average .... the mean, not even the median, so about 80% of the population will be getting less than that."

As I understand it, "Mean" is the middle with half above and half under. Larger cities like BKK, CM, and others it is more, Countryside like Nan where you say your are from it is less.

My neighbors home is about 1m baht. He works as a cook for a Tourist restaurant. He makes 10,000 a month and say it will go up the first of the year 2000 Bt.. Wife works part time at a beauty salon and goes to school part time. and a brother lives there some of the time. With their income of just about 18,000 Bt a month, They easily pay their just over 3000 Bt monthly payment. Lots of government home loan programs around for Thai's

And people say there's a problem with the Thai education system. (There was more than a hint in post #79.)

TommoPhysicist · June 14, 2012

"With house prices and wages in Thailand it would seem like a sub-prime disaster in the making.

Wages 10k/month ........ Small homes 1Mbht+ ....... it just doesn't work."

"10k is the Thai national average .... the mean, not even the median, so about 80% of the population will be getting less than that."

As I understand it, "Mean" is the middle with half above and half under. Larger cities like BKK, CM, and others it is more, Countryside like Nan where you say your are from it is less.

My neighbors home is about 1m baht. He works as a cook for a Tourist restaurant. He makes 10,000 a month and say it will go up the first of the year 2000 Bt.. Wife works part time at a beauty salon and goes to school part time. and a brother lives there some of the time. With their income of just about 18,000 Bt a month, They easily pay their just over 3000 Bt monthly payment. Lots of government home loan programs around for Thai's

The low rate only lasts 2 years, after that they will have to find about 8k a month (assuming 900k outstanding).

There is a really low rate for government employees, but you haven't stated any of these guys are, so in a while sub-prime problems will occur.

For those that don't understand mean and median.

Median, half the people above, half the people below.

Mean, add together all, divide by number of people.

So for an economy where a few are paid mega-$$$$$$, the mean is way higher than the median.

Example

A (very small) country of 10 people, where 1 person earns 10bht a month, 8 people earn 110bht a month each, 1 person earns 99,100bht a month

Median wage = 100bht a month

Mean wage = 10,000bht a month

Edited June 14, 2012 by TommoPhysicist

xylophone · June 14, 2012

"With house prices and wages in Thailand it would seem like a sub-prime disaster in the making.

Wages 10k/month ........ Small homes 1Mbht+ ....... it just doesn't work."

"10k is the Thai national average .... the mean, not even the median, so about 80% of the population will be getting less than that."

As I understand it, "Mean" is the middle with half above and half under. Larger cities like BKK, CM, and others it is more, Countryside like Nan where you say your are from it is less.

My neighbors home is about 1m baht. He works as a cook for a Tourist restaurant. He makes 10,000 a month and say it will go up the first of the year 2000 Bt.. Wife works part time at a beauty salon and goes to school part time. and a brother lives there some of the time. With their income of just about 18,000 Bt a month, They easily pay their just over 3000 Bt monthly payment. Lots of government home loan programs around for Thai's

The low rate only lasts 2 years, after that they will have to find about 8k a month (assuming 900k outstanding).

There is a really low rate for government employees, but you haven't stated any of these guys are, so in a while sub-prime problems will occur.

For those that don't understand mean and median.

Median, half the people above, half the people below.

Mean, add together all, divide by number of people.

So for an economy where a few are paid mega-$$$$$$, the mean is way higher than the median.

Example

A (very small) country of 10 people, where 1 person earns 10bht a month, 8 people earn 110bht a month each, 1 person earns 99,100bht a month

Median wage = 100bht a month

Mean wage = 10,000bht a month

Maybe I'm missing something (like a few brain cells......too much red wine!!) but isn't the median value in the above example 110??

TommoPhysicist · June 14, 2012

Maybe I'm missing something (like a few brain cells......too much red wine!!) but isn't the median value in the above example 110??

You are right ..... I changed the samples (from 9x 100) but not the answer.

Median = 110

Edited June 14, 2012 by TommoPhysicist

tolstoy · June 14, 2012

"10k is the Thai national average .... the mean, not even the median, so about 80% of the population will be getting less than that."

That is just wrong. In the BKK post it was reported back in 2003 that the national wage was more than 10k.

The problem when doing this is that there are many subsistance farmers in the country that make less than 20k a year. They just live off of their farms. Then there are the labor class making 6-10k a month. Then you have the tech and trade skill workers making 8-15k, then you have the lowe middle class workers making 10-20k a month. Middle to upper middle earning 20-50k a month.

The other problem with your facts tommo is that single people rarely buy houses. It is a family with a combined income. Also for your 2 year introductory loan, you do realize that you can extend the low rate for a nominal fee.

I think that the problem with many of the buildings is that they are copying a model for marketing that doesn't work in CM. They don't fully understand their target audience and don't build what the people want.

hate to break this to you tommow, but 10k a month is a relatively low wage in CM. Even lamphun office workers in the factories make more than that.

TommoPhysicist · June 14, 2012

hate to break this to you tommow, but 10k a month is a relatively low wage in CM. Even lamphun office workers in the factories make more than that.

Factory workers usually earn a high wage compared to other workers.

But then they have to work quite hard for long shifts, which doesn't suit many Thais.

Many of the Thais that I know, that aren't farmers live 2/3/4 families in one house and all contribute to the mortgage payments. It's still sub-prime lending.

67% of Thailand are rural workers, less than 10k

15% of city workers are slum dwellers, less than 10k

That makes 82% using Thai government stats.

I stand by my 80% of Thais earning less than 10k a month.

Edited June 14, 2012 by TommoPhysicist

elektrified · June 14, 2012

hate to break this to you tommow, but 10k a month is a relatively low wage in CM. Even lamphun office workers in the factories make more than that.

Factory workers usually earn a high wage compared to other workers.

But then they have to work quite hard for long shifts, which doesn't suit many Thais.

Many of the Thais that I know, that aren't farmers live 2/3/4 families in one house and all contribute to the mortgage payments. It's still sub-prime lending.

67% of Thailand are rural workers, less than 10k

15% of city workers are slum dwellers, less than 10k

That makes 82% using Thai government stats.

I stand by my 80% of Thais earning less than 10k a month.

You trust government stats?

I think your numbers may have been true back in the 1980's-1990's or thereabouts. Thais make more than 10K/month. I would say 12K/month on the absolute low end of the spectrum. Even Thais who earn low salaries make up for it by selling Allianz or something in their spare time. There was a study done on this subject in 2000 by the U.N. and The World Bank. I seem to remember reading the 80% figure of the people living below the poverty line and whom worked in the agricultural sector was in the 1980's-1990's. Thailand has slowly shifted from an agrarian economy to an industrialized economy and wages are higher now. It is fairly common for self-employed laborers here in C.M. to earn 25-40K per month. In Bangkok more. My friend in BKK pays his electrical technicians 1500 per day. They have no problem getting it. The two most uneducated people I know here; my housekeeper and my my gardener, earn 18K and 40K/month respectively.

Edited June 14, 2012 by elektrified

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