Price Goes Up As Townhouses Get Built

[lovelomsak]

There are some townhouses being built in my neighbourhood ,by a small time speculator.He is a young man who is using his mothers money to hopefully make some money off property. He started building 7 townhouses 2 years ago in an area that gets deep flooding every year. The townhouses still arenot finished ,about half done. The workers come everyday but progress is very slow. I ask why it was taking so long to finish. I was told none have sold and if they get finished and sit they age quickly.So he is waiting for some buyers before he finishs the townhouses. The part I liked and found humorous was that he has raised the price per townhouse during this time by 30% . The price increase is to offset the labour costs which are growing because he has the workers there everyday but doesnot complete the job. It is quite the position he got himself into. This helped me understand why in Thailand prices go up when things donot sell. Or rooms go up in hotels when no one stays there.

[giddyup]

It seem like the Thais would rather not sell at all rather than reduce their price, even if it means those townhouses will crumble into dust unoccupied. A friend wanted to rent a shophouse, he thought the rent being asked was a bit too high so he offered 10% less and was refused. Three years later the same shophouse still hadn't been rented. Go figure.

[Kilgore Trout]

It seem like the Thais would rather not sell at all rather than reduce their price, even if it means those townhouses will crumble into dust unoccupied. A friend wanted to rent a shophouse, he thought the rent being asked was a bit too high so he offered 10% less and was refused. Three years later the same shophouse still hadn't been rented. Go figure.

I think it all comes down to the so called "face" issue; they simply won't deal with failure and not making a huge profit is considered failing. If you don't sell you can't fail, hence you don't lose face.

The very idea defies every bit of reason I can muster

[tfc]

When I was in Phuket I couldn't understand why some of these condos would just sit there for years unsold, then that odd quirk of refusing to lower the price even if going bankrupt was explained to me.

[bobobo]

Was in a bar outside Jomtien, bought my usual beer. He said 80 baht. I said last week it was 60 baht. He said no costumer come You must pay more..same,same but no same...

[giddyup]

Was in a bar outside Jomtien, bought my usual beer. He said 80 baht. I said last week it was 60 baht. He said no costumer come You must pay more..same,same but no same...

Crazy, but true. I have seen side by side bars, one selling Leo for 50 baht, one for 70. When I asked why the 20 baht difference, the Thai lady owner said, not enough customer, have to put price up. Yet the bar selling Leo for 50 baht was packed. Thai logic, or lack of.

[Mosha]

A large building in Ranong has been under construction for at least 11 years. A big crane and 2 or 3 guys on site. It hasn't altered a bit in all that time.

[thenervoussurgeon]

There is no reason for thai logic ,a house on my sister in laws estate had been bought and never lived in and became a real mess ,after about 12 years my sister in law was asked if she knew the owners and would they sell ,she spoke to them and a price of 3 mill was mentioned (they are worth about 12 mill in good condition this one nearly deralict) anyway the couple agreed on 3 mill ,when my sister in law spoke to the owner ,he put the price up to 6 mill ,they walked away ,go figure its still there still deralict

[breadbin]

same all over, buy off plan, cheaper than when built. But again, TIT!

[jackr]

The very idea defies every bit of reason I can muster

The concept of Buddhism on these shores is equally unfathomable... it should be renamed anti-Buddhism or perhaps desirism, greedism, or, more apt, daftism.

[naboo]

My girlfriend signed a contract on a shophouse in June for 1 year, with 2 months deposit down. The business has been quite successful, but personal circumstances changed and she needs to break the contract. The terms say she should inform the landlady 7 days in advance and she loses her deposit. Fair enough.

My gf called her and suggested that if she found somebody to take over my business, would it be possible for to come to an agreement on the deposit. No. As my gf is breaking the contract, she loses all. Now the landlady is going to be left with an empty property in a row of properties 60% occupied for several months, with new shop houses being built all around. As my girlfriend's business has been quite successful, I'd imagine she'd find someone to take it over quite easily. But the ladlady made it more favorable for my gf to take the business assets out, sell them and leave.

Thai business logic.

[giddyup]

My girlfriend signed a contract on a shophouse in June for 1 year, with 2 months deposit down. The business has been quite successful, but personal circumstances changed and she needs to break the contract. The terms say she should inform the landlady 7 days in advance and she loses her deposit. Fair enough.

My gf called her and suggested that if she found somebody to take over my business, would it be possible for to come to an agreement on the deposit. No. As my gf is breaking the contract, she loses all. Now the landlady is going to be left with an empty property in a row of properties 60% occupied for several months, with new shop houses being built all around. As my girlfriend's business has been quite successful, I'd imagine she'd find someone to take it over quite easily. But the ladlady made it more favorable for my gf to take the business assets out, sell them and leave.

Thai business logic.

The concept of "seeing the big picture" seems alien to Thais, they only seem interested in short term gain,

[lovelomsak]

My girlfriend signed a contract on a shophouse in June for 1 year, with 2 months deposit down. The business has been quite successful, but personal circumstances changed and she needs to break the contract. The terms say she should inform the landlady 7 days in advance and she loses her deposit. Fair enough.

My gf called her and suggested that if she found somebody to take over my business, would it be possible for to come to an agreement on the deposit. No. As my gf is breaking the contract, she loses all. Now the landlady is going to be left with an empty property in a row of properties 60% occupied for several months, with new shop houses being built all around. As my girlfriend's business has been quite successful, I'd imagine she'd find someone to take it over quite easily. But the ladlady made it more favorable for my gf to take the business assets out, sell them and leave.

Thai business logic.

Yes logic is certainly different here to what I am accustom too. I would have approached this situation a little different. I would have let the other person take over the business without telling the landlady.And arranged a deal with the person who took over to pay me the deposit.Giving the new person sole responsibility and ownership.

[canopy]

The part I liked and found humorous was that he has raised the price per townhouse during this time by 30%

Expect this trend to continue. Property prices are up 10:1 in the last several years in my area. Every time someone speaks, they gloat newer, higher prices and absolutely everyone immediately jumps to the new number pulled out of the air. There was no market for the land when it was cheaper and raising the prices has put a frozen market in deep freeze. The sellers think they are really striking it rich and look froward to jacking up the prices again. In reality the sellers are dirt poor, live in shacks and are hardly able to afford their whiskey.

[CharlieH]

They do the same with cars, there are sellers around me that have had some cars sitting there for years, still the same price 4 years later and some the price is rising.

But then I could never understand why a 15 yr old basic Merc that had been to the Moon and back was worth 500k either.

Edited September 21, 2012 by CharlieH

[VintageTQ]

I agree on the car issue, i looked at used cars and the prices were absolutely ridiculous, i cannot imagine anyone paying the sorts of prices people were asking.

[giddyup]

I agree on the car issue, i looked at used cars and the prices were absolutely ridiculous, i cannot imagine anyone paying the sorts of prices people were asking.

True, you do pay high prices for used cars, but on the plus side you can get your money back when you sell, or in some cases get more than you paid. Buy a new car in Australia (probably the same in the UK, US etc) and it depreciates about 25% as soon as you leave the showroom.

[Bung]

A lot of the building is done to use up money made from "alternative" sources and not put in a bank. It doesn't matter if it is sold or not, eventually they will make a return on their investment.

[giddyup]

A lot of the building is done to use up money made from "alternative" sources and not put in a bank. It doesn't matter if it is sold or not, eventually they will make a return on their investment.

How do they make a return if it's never sold?

[thaipod]

This has always had me wondering seeing all these construction sites with cranes and no progress .

My wife recently told me companies do this to get bank loans . They have land and put up a crane dump building materials and put workers on and then approach a bank for a loan and then make an appointment for the bank manager to look at the site and usually is approved and then use the money for another business venture.