Rates Of Increase In House Prices Uk Vs. Thailand.

[markg]

I am thinking of buying a house in Thailand. Anyone know what problems/payments i would have to make if i were to sell the house in say 10 years and want to take all the money back to UK? Is there a limit to how much money i can take out of Thailand? etc

Second question is more complicated.

I have a house in UK worth about 130k with about 60k mortgage left - so roughly 70k equity.( i know stamp duty and exchange rates are going to eat into that) I currenly rent the house through an agent but am having a nightmare with the agency. Its difficult to manage the house when i live in Thailand. If i "swapped" my house in UK for one in Thailand, (i.e. sell up in UK then get a house in Thailand for exactly the same price and mortgage amount and rental income) would i be any better or worse off? In 5, 10 or 15 years etc would i be able to sell the house in Thailand and buy my original house in the UK back? In the 3 years i have been away from the UK my house has increased in value by something like 10k per year. Would i see the same increase in Thailand? 10k sterling is about 700k Baht. I guess i always want the option of returning to the UK sometime in future. If a house in Thailand is going to perform the similarly to the one in UK then it is easier for me to manage a rental property out here and then sell up when i want to return and can at least enjoy the same lifestyle as when i left. I dont want to sell my 3 bed semi, buy out here, then in the future, find that i can i can only afford to buy a 2 bed mid terrace when i go back.

Thanks in advance.

M

[Thaiquila]

How could anyone possibly know for certain the rate of return on real estate in any country?

If they did, they would be so rich they certainly wouldn't answer your question.

While we are at it, oh oracles, what will be the price of gold a year from now?

[markg]

How could anyone possibly know for certain the rate of return on real estate in any country?

If they did, they would be so rich they certainly wouldn't answer your question.

While we are at it, oh oracles, what will be the price of gold a year from now?

Sorta knew i would get some dumb replies. Shame really. What exactly is the point of your post above? Anyone with a brain can easily grasp the concept of the original question.

I am not asking for predictions of the future, i am just asking, broadly speaking, if anyone was in the same situation, what would they do?

Or to put it another way, posters can give their opinions on what they think the investment prospects are based on past performances in both countries.

[Thaiquila]

Sorry, you are correct, it was a rude reply.

So I will give you me my gut feeling opinion about Thailand.

I think over the next ten years, there is a fair chance the real estate returns will be something like 5 to 7 percent for well located properties.

I don't think it will crash and I don't think it will boom either.

[BKK90210]

The second question is very difficult without knowing

1) how much are you getting a month on the rental...and how much are you paying the mortgage a month?

2) how old is your house?

2) where is the location this house - urban or in the wood somewhere?....Is this location have a strong enough local economy to support the rental market at your price?... or the housing price is so cheap that most people would rather just buy them out right espectially in the current interest rate?...

The different is in UK - the house and the land are yours - more secure investment - guarantee equal or better in the future for the rental.

While in Thailand - only the house is yours, land lease, - no guarantee the same rental income. The value in Thailand is mostly in the land not the house, coz the construction cost is quite cheap. Also the realestate market in UK is pretty fair in value, while in Thailand the realestate market for farangs is always just about 30%-40% higher than normal thai.

Edited January 29, 2006 by BKK90210

[monty]

I would say you're not going to gain much...

In my opinion both the UK and the Thai real estate markets are priced very high.

I don't see the markets "crash" anytime soon, but a price adjustment seems to be necessary!

In the UK because hardly anybody can afford to buy at these high prices.

In Thailand the reason would be just simply oversupply. Everybody wants to sell, and although lots of people coming over here are in the market to buy, the balance is way of scale at the moment.

Anyway, I think buying a place in Thailand should be a place where you just want to live. Forget the investment part. If you like a house and can afford it, just buy it...

And as said a gazillion times already on this forum, don't bring any funds into Thailand you can't stand to lose!

[Thaipwriter]

I am thinking of buying a house in Thailand. Anyone know what problems/payments i would have to make if i were to sell the house in say 10 years and want to take all the money back to UK? Is there a limit to how much money i can take out of Thailand? etc

Second question is more complicated.

I have a house in UK worth about 130k with about 60k mortgage left - so roughly 70k equity.( i know stamp duty and exchange rates are going to eat into that) I currenly rent the house through an agent but am having a nightmare with the agency. Its difficult to manage the house when i live in Thailand. If i "swapped" my house in UK for one in Thailand, (i.e. sell up in UK then get a house in Thailand for exactly the same price and mortgage amount and rental income) would i be any better or worse off? In 5, 10 or 15 years etc would i be able to sell the house in Thailand and buy my original house in the UK back? In the 3 years i have been away from the UK my house has increased in value by something like 10k per year. Would i see the same increase in Thailand? 10k sterling is about 700k Baht. I guess i always want the option of returning to the UK sometime in future. If a house in Thailand is going to perform the similarly to the one in UK then it is easier for me to manage a rental property out here and then sell up when i want to return and can at least enjoy the same lifestyle as when i left. I dont want to sell my 3 bed semi, buy out here, then in the future, find that i can i can only afford to buy a 2 bed mid terrace when i go back.

Thanks in advance.

M

Here's my couple of Baht's worth

There are no limits when taking money out of Thailand, you can only transfer a maximum of 20,000 USD per transaction but you can do as many transactions in on day as you like. I recently did 3 in one day via internet banking to the uk...no problems at all.

With regards long term investment:

In England you have really strict local councils who have planning laws and who tend to limit the production of new housing to brown belt land. This keeps supply below demand and thus property is considered a great long term investment.

Admittedly there were folks in the crash in the late eighties that found themselves with negative equity and were evicted when they could not afford to make mortgage payments when interest rates were about 15%.

Apart from occasional blips like the one above property in the uK has always been a sound investment. I feel UK house prices will remain in thier current bracket for the next 3 years, they have risen too far and the market is knackered because first time buyers cannot get mortages for starter homes. without first time buyers there is no market.

Now to Thailand

This is a developing country, there are very few planning laws and nothing in the way of limitaion of what you can and cannot do with your property.

You can secure a bit of land here and build what you like.

Land is available to anyone and it tends to be cheap.

SUPPLY OUTSTRIPS DEMAND: this is the single factor that makes me think that property investment stinks with very few exceptions. Those exceptions would be condos in prime locations in major cities and exclusive all farang developemnts in the major tourist resorts.

I think that virtually all of these moo baans that are appearing all over the place will look absolutley horrific in a few years, if you buy into one of these places, in 10 years your "investment" will be worthless. most will disentrgrate into awful thai ghettos.

Why? : Who will buy your house when all the neighbours have crap piled up outside their homes, nobody has repainted their houses or if they have it is bright purple and yellow.

Dogs freely roam around and noise is a problem. Thais dont like buying second hand homes and no farang will toss up any money so you can move on.

Buying in locations like this is for lifers...those that want to stay in the same place until they pop their clogs.

I honestly think that investing in property in thailand is ok for folks who want to stay put.

If you are relying on a property increasing in value and then being able to resell it later you are entering very dangerous ground. Especially as you only have about 5 million baht to spend.

Some guys will tell you different, and there are exceptions but the vast majority of folks i have met here who have built homes or who have used homes that they are trying to sell, seem to be stuck with them. Unless they are in locations described above. I have worked in the real estate business here for about a year, a very short time in the grander scheme of things but long enough to see beyond the farang bar experts knowledge and to see how it really is.

sorry for pi55ing on your chips!

[markg]

Thaiqilla - I am humbled by your apology and in return apologise for being short with you earlier on in this thread.

If you are relying on a property increasing in value and then being able to resell it later you are entering very dangerous ground. Especially as you only have about 5 million baht to spend.

Some guys will tell you different, and there are exceptions but the vast majority of folks i have met here who have built homes or who have used homes that they are trying to sell, seem to be stuck with them. Unless they are in locations described above. I have worked in the real estate business here for about a year, a very short time in the grander scheme of things but long enough to see beyond the farang bar experts knowledge and to see how it really is.

sorry for pi55ing on your chips!

Dont be sorry for pi55ing on my chips. I very much apppreciate everybodies replies. I cant say hand on heart that i am a lifer in Thailand - i love it here and could stay, but i always want the option of returning to UK in the future, be that in 5 years or 50 years.

I live in Phuket and would be looking at buying here.

I look at a 100k terraced house in manchester and compare that with a 100k 4 bed villa with a pool in Phuket..............the rental values are about the same. But i just wanted to be reasonably confident that both houses would appreciate in value at a similar rate.

Then i read further on this forum and became afraid about the whole rigmarole of buying land.

Ehhh...... maybe i should just stick with what i know in the UK. (Though see my other post about Countrywide Letting Agents)

Edited January 29, 2006 by markg

[marshbags]

The future in Thailand is unsure for any of us until laws are introduced to assist and protect property investment.

Who will own the house when the purchase is completed as farang cannot own it, unless it,s a condo and then only in special circumstances.

I reckon you should hold onto your u.k. property and search for a more reliable agent, even outside your area.

I have invested in Thailand and it didn,t do well.

I kept most of my funds , including my house in the u.k. which is rented out.

After 13 years the property has increased 200 % plus and i,ve had all the income on top from the renting side of things.

Yes it,s a pain using an agent but at the end of the day the difficulties are worth it.

If you sell up you are going to find it hard to get back on the property ladder.

Take a look at all the first time buyers in the u.k. who find it impossible to get a start on it.

If you get a fair rent you can allow for a complete redecoration of the property as and when you want to move back in and still have loads of profit left.

If you sell it and things do not work out you are left with a big problem, possibly even nothing.

This is not being cynical but realist and i think of health and family in the context of things not working out as against knocking Thailand where i for one am happy and content.

( but who knows what the future holds )

Again things are to insecure here for what you are thinking of doing.

You are in a way answering your own questions at the latter end of your post i think so stick with what you have now and just rent in Thailand, my humble opinion

marshbags

[RAZZELL]

No brainer...

Keep the property in the Uk and rent in Thailand.

[Steve2UK]

Aside from consideration of whether the Thai economy may go belly-up again (and what may happen to exchange rates), I'd say that there's a factor that should be at or near the top of your list. It was mentioned above in passing but I see it as major. Thai's, like most Asians, will nearly always choose to buy new rather than second-hand if they have the money. Think of your Thai house the way you think of your car in the west and you get the picture. As with "collector's item" cars, a rare and special (e.g. traditional or what we might call a "period" house) house might appreciate in value; an ordinary house almost certainly won't.

Depending on local circumstances (e.g. expanding development of the area - particularly where farangs are a key factor), the land value may increase - but it's unlikely that the bricks and mortar sitting on that land will keep pace. The evidence is all around: condo blocks and moo baans start off looking great - and steadily decline as they age visibly through poor maintenance etc.

With your capital and situation, I agree with others who say that you should be looking at how to make the renting approach work.

[Heng]

Keep your property in the UK. Pay your way down to 100% equity, and THEN buy a second home in Thailand. From my own experience, having overseas rental income is a nice hedge to have.

[LaoPo]

There are no limits when taking money out of Thailand, you can only transfer a maximum of 20,000 USD per transaction but you can do as many transactions in on day as you like. I recently did 3 in one day via internet banking to the uk...no problems at all.

I'm a bit surprised here... are you talking about business-money or personal/private money?

Also: are you talking you transferred money from your Thai bank to the UK and did you do this 3 times in 1 day with the same bank or did you use different banks?

What about all the stories you CANNOT take the money out of the country (for instance just the money you brought INTO the country?)

Are you saying that anyone can transfer 3 times/day 20.000 US$ = US$ 60.000 PER DAY and do this 5 days, coming to US$ 300.000/WEEK? without any problem?

LaoPo

[madforit]

Keep your property in the UK. Pay your way down to 100% equity, and THEN buy a second home in Thailand. From my own experience, having overseas rental income is a nice hedge to have.

Sounds good to me, that's basically what I'm doing - well, small mortgage on UK property only. Rental income pays mortgage and provides a small surplus for maintenance etc. Buy property in Thailand (Phuket/Bangkok) to live in, if it all goes t*ts-up in a few years then I can return to the property in UK, work over here and afford the mortgage. OK, so it'll hurt, but I can walk away from the property in Thailand if I absolutely have to. The property market in LOS may be uncertain (where isn't it??) and you may have to jump through some legal loopholes in order to own a place there, but one thing is dead certain - rent is dead money - useful for short term but financial madness long-term (unless you move to issan and can pay 6000 baht/month for a palace).

You can get a fairly nice property on Phuket for around the 4 mill mark, so if I were you I'd give up the dreams of a 4-bed palace with pool & definitely try to keep hold of the UK property. Assuming your property in the UK is worth more than the mortgage on it you could always increase your mortgage to allow you to buy over in LOS, just so long as you can afford the mortgage over here if you come back, and whilst over in LOS your rental income from the UK pays the mortgage.

Just my opinion anyway - good luck with it.

Paul

[englishoak]

keep property in uk at all costs. It's a dead cert that over time bricks & morter will return a good investment. Pay off as soon as possible. Interest rates WILL go up again guaranteed. The average over 10 years is 7.5%

Buy second property in thailand and live off the rent from the uk. It is only going to improve with inflation. Here you will probably have to rebuild your house in 20-30 years but the place in the uk will last your whole life. I can't believe the standard of building here, namely none.

As for the condos route i'd only go there for having a place in bangers, & then it would have to be a reputable block in the silom area.

[johnnyk]

If you don't absolutely have to sell the UK place, DON'T!

Rents can be indexed to inflation and if you keep the place in good nick with preventive maintenance you are on to a good thing.

The major western industrial economies have had housing shortages for generations and will continue to do so, IMO.

Not to mention the high downpayment necessary to enter the housing market means there should be a good supply of renters for a long time.

In addition to providing you with hard currency income your asset will also appreciate over time.

Use fcukyou money to buy in Thailand, not your life savings.

Edited January 30, 2006 by johnnyk

[markg]

well as usual some cracking advice on here. Thaivisa has never let me down.

Will keep the UK house then i guess. May remortgage and take some of the money out to put down on a house here. Like Monty (?) said - dont put any money into Thailand that you cant afford to lose.........i.e my life savings. Sage advice that.

Thanks for the help guys.

Hope some one answers the earlier post querying the legitimacy of transfering unlimited amounts of money between Thailand and UK.

M

[roamer]

If property does'nt appreciate in value in LOS can I buy one at 1980's price please ? A nice little villa on Phuket, Samui or Hua Hin will do.........

[Belfastboy]

the answer is easy...stick with the UK property....

its a sound investment, where as thailand is unstable....just look at The political situation at the minute....all it takes is some nutcase army general to try do a silly coup or something....

easy peasy...i know where my money will be invested. IMO

[Heng]

If property does'nt appreciate in value in LOS can I buy one at 1980's price please ? A nice little villa on Phuket, Samui or Hua Hin will do.........

Yeah, I don't know what the "doesn't appreciate" crowd are talking about. We have pieces of property off Onnuch Rd. and Sukapibal 3 (two very average roads on the outskirts of Bangkok... not near the center of anything) from back when they were both partially paved / partially dirt / partially gravel (and this was only 1975-1980); a few hundred thousand Baht each for 6 and 13 rai. Note, this was in the days when the Baht was about 20 to dollar (as far as I can ascertain from family records... naturally I don't remember exactly as I was 5 years old in 1980).

Try getting a 4 meter wide shophouse streetside on any of those streets nowadays. You'd be lucky to find anything under 7 million. For land a few rai and up, don't even bother unless you want a sad case of "I've missed the boat" blues.

Still, a foreigner would have to be off his/her rocker to keep all of their eggs in the LOS.

[alive555]

question #1 - any gain on the value over the period will be subject to cap gains tax. I you hold over 5 years this will be very low. In terms of taking the money outside Thailand this will be a problem as you are only allowed to take the amount that you have brought in by way of tor tor 3 document isssed by Bank of Thailand issued to you upon inward remittance.(you needt o ask for this document , its not automatic)

quetion #2 - Thai real estate market is pretty volatile, however I would strongly expect the price fo housing to rise approx 3-5% pa over the next 10 years assuming that the house is in an attractive location with good and or improving infrastructure, interest rates remain below 8% and the economy improves. Dont expect to get anything like the returns you have enjoyed in the UK, but bear in mind that the UKs definitely topping out and that its the old adage sell at top and buy at bottom....if u can.. As per high end condos dont touch them they will burn you.