Rapid Land Price Increase

[tim armstrong]

Is it just our area or is there a rapid land price increase happening in

rural Thailand. In the last 2yrs land around us has increased by 30-40% and there is massive commercial property, shopping mall and housing development not just in Nakhon Sawan but also surrounding villages. We don't know why, but maybe its connected to the

almost unlimited credit available. I've never seen so many new cars or Kubotas around.

It's a worry as the same phenomena in Oz some 15 years ago didn't work there either.

[Mosha]

My sister-in-law has already returned her Toyota. Less than a year old, but unable to get her priorities right. So it was reclaimed by the finance company.

[hansnl]

It is very well possible Thailand wil have something like the US & Europe are having now.

A building and Credit (read banking) Crises.

The signs are there.

Property prices in Bangkok are stalling.

[Gary A]

It's very possible that farm land in Issan is becoming a bubble. We (I) bought two ten rai plots for my wife. That was about seven or eight years ago. That land price has about tripled. No way can the increases continue. At this point, the 30,000 baht per price per rai is long gone.

[jbrain]

It's a worry as the same phenomena in Oz some 15 years ago didn't work there either.

It's actually also 15 years ago that it din't work out here in Thailand.

Keep in mind that the Thai mentality is that if they run out of money they will have to sell, and they will always ask a higher price as their neighbour, because their plot is superior of course, so the next one in the village will put his price higher then the othjer one for the same reason.

As their is a lot of land for sale, they will all follow suit, while in the mean time nothing is sold of course and the debts get bigger, hence the reason to raise the price agaian.

[Banzai99]

It's very possible that farm land in Issan is becoming a bubble. We (I) bought two ten rai plots for my wife. That was about seven or eight years ago. That land price has about tripled. No way can the increases continue. At this point, the 30,000 baht per price per rai is long gone.

I bought ( paid for ) 7 rai with Chanote probably 7 years ago, they wanted 180,000, ended up getting it for 120,000, turned down a cash offer of 350,000 for it 6 months ago.

God ain't making any more land.

[loong]

It is very well possible Thailand wil have something like the US & Europe are having now.

A building and Credit (read banking) Crises.

The signs are there.

Property prices in Bangkok are stalling.

Basic economics is quite simple. Supply and demand. Property and land prices in other countries find their own level depending on whether Demand is higher than supply or vice versa.

Thai economics seem to work the opposite way, when demand falls, prices rise. Of course, this doesn't necessarily mean that selling prices increase, just the asking price.

From what I have seen, banks in Thailand are reluctant to foreclose on a loan that is secured on property, and if they do, they are reluctant to sell.

Just a theory of mine.....

Eg.

Bank lends 1 million Baht secured on 10 rai of farm land.

This will appear in the bank's book-keeping as an asset worth 1 million, actually maybe more, but keep things simple.

Borrower defaults.

All the while the loan stays on the bank's books, it remains an asset.

Eventually the bank takes possession of the land and it then appears in their books as an unrealised asset worth 1 million plus, so books still balance nicely.

The bank puts the land up for sale at 1 million, but there are no takers, maybe an offer or 2 around 400K

The bank won't sell at 400K, because as soon as they do, the books will show a loss of 600K.

Multiply this by the 1000's of loans in default, if the banks were to take possesion and sell the properties at what the market will offer, there would be a crash.

[Ystradyfodwg]

Girlfriend bought 15 rai of farmland in Sri Saket with Chanote title for BT375,000(BT25,000 per rai)six years ago to plant rubber trees. Recent article BKK Post quoted prices for 1 rai with rubber aged up to 3 years @ BT80,000 per rai and 1 rai with ready to harvest rubber(7years) @ BT150,000!Interesting.

[jbrain]

Girlfriend bought 15 rai of farmland in Sri Saket with Chanote title for BT375,000(BT25,000 per rai)six years ago to plant rubber trees. Recent article BKK Post quoted prices for 1 rai with rubber aged up to 3 years @ BT80,000 per rai and 1 rai with ready to harvest rubber(7years) @ BT150,000!Interesting.

I don't know the price of rubber trees, but note that the latter includes grown trees where the former is an empty undeveloped piece of land.

[jbrain]

It's very possible that farm land in Issan is becoming a bubble. We (I) bought two ten rai plots for my wife. That was about seven or eight years ago. That land price has about tripled. No way can the increases continue. At this point, the 30,000 baht per price per rai is long gone.

I bought ( paid for ) 7 rai with Chanote probably 7 years ago, they wanted 180,000, ended up getting it for 120,000, turned down a cash offer of 350,000 for it 6 months ago.

God ain't making any more land.

That is a really cheap price for chanote land, but I guess some people get all the luck, not ?

Strange enough from your posting history it shows that at the time of your purchase you hadn't been in Thailand yet.

You bought the land from Ebay ?

[jamescollister]

Girlfriend bought 15 rai of farmland in Sri Saket with Chanote title for BT375,000(BT25,000 per rai)six years ago to plant rubber trees. Recent article BKK Post quoted prices for 1 rai with rubber aged up to 3 years @ BT80,000 per rai and 1 rai with ready to harvest rubber(7years) @ BT150,000!Interesting.

That area is too dry for rubber unless you irrigate, round here good rubber land no charnote over 100,000 Baht a rai. Land with good producing trees, not Thai stuck in the ground and left to grow, but properly taken care of from day one, 300,000 Baht if you could find anyone willing to sell. Jim

[Livinginexile]

Same as where I live in Kanchanaburi.

We bought 11.5 rai chanote land connecting with the river about 2.5 years ago for 220,000 bht per rai.

Exact same land next door sold last month for 350,000 bht per rai.

That's a 60% increase in just over 2 years!!

[Ystradyfodwg]

I agree that Sri Saket Province is a pretty arid region but have seen quite a few areas near Kantaralak/Cambodian border changing from rice to rubber production in recent years.Fortunately girlfriends land has a river running next to it which stops the land from getting too arid and the rubber trees seem to be developing quite nicely.

[jamescollister]

I agree that Sri Saket Province is a pretty arid region but have seen quite a few areas near Kantaralak/Cambodian border changing from rice to rubber production in recent years.Fortunately girlfriends land has a river running next to it which stops the land from getting too arid and the rubber trees seem to be developing quite nicely.

If you are near the mountains and jungle, different story, you have a mini climate. Jungle and mountaians cool the air and you get more rain, plus the run off from the hill raises the water table allowing the trees to have a longer production time. Same same for me Lao land border, good rubber country. Petty about the bandits here and the shelling there. Jim

[Ystradyfodwg]

The land is far enough away from the border not to worry about any shelling-thanks for your concern.Yes girlfriends land is more hilly and does get a little more rain than the flatter areas of Sri Saket.Along with the river the rubber seems to be maturing very nicely.

[jcw]

It's a worry as the same phenomena in Oz some 15 years ago didn't work there either.

It's actually also 15 years ago that it din't work out here in Thailand.

Keep in mind that the Thai mentality is that if they run out of money they will have to sell, and they will always ask a higher price as their neighbour, because their plot is superior of course, so the next one in the village will put his price higher then the othjer one for the same reason.

As their is a lot of land for sale, they will all follow suit, while in the mean time nothing is sold of course and the debts get bigger, hence the reason to raise the price agaian.

Across the road, they are asking 8.3 million a Rai. Now the neighbors think their place is worth 8.3m a rai.

Reality is, they could move it for 1.5 - 2.0 million a rai max. I value our land at 1.3mill a Rai, what a block recently sold for near us. (I am not in Issan)

Although a sale did settle recently for 63 million for 1.8 Rai block of land total, 4km from us, I feel it is nuts but it is a unique bit of land, on the beach in a tourist place. That same land down there was selling for 1/5 of that 3 years ago.

Bubble alright.

Edited November 8, 2012 by jcw

[jamescollister]

It's a worry as the same phenomena in Oz some 15 years ago didn't work there either.

It's actually also 15 years ago that it din't work out here in Thailand.

Keep in mind that the Thai mentality is that if they run out of money they will have to sell, and they will always ask a higher price as their neighbour, because their plot is superior of course, so the next one in the village will put his price higher then the othjer one for the same reason.

As their is a lot of land for sale, they will all follow suit, while in the mean time nothing is sold of course and the debts get bigger, hence the reason to raise the price agaian.

Across the road, they are asking 8.3 million a Rai. Now the neighbors think their place is worth 8.3m a rai.

Reality is, they could move it for 1.5 - 2.0 million a rai max. I value our land at 1.3mill a Rai, what a block recently sold for near us. (I am not in Issan)

Although a sale did settle recently for 63 million for 1.8 Rai block of land total, 4km from us, I feel it is nuts but it is a unique bit of land, on the beach in a tourist place. That same land down there was selling for 1/5 of that 3 years ago.

Bubble alright.

Bubble maybe not, a nation getting richer and land prices reflecting that. Many years ago when a young lad was offered an apartment in Singapore $5,000, that bubble seems to have kept growing, up and down over the years, but never collapsed to $5,000 again. Think those apartments are now over 5 mil Singapore dollars. Asia is growing and I doubt it will ever go back to what I was years ago. Once development starts and the money flows, little chance of turning the clock back. Jim

[IsaanAussie]

Fifteen years ago was 1997, the Asian financial crisis. I think winding the clock back was exactly what happened. I lived in Indonesia at the time not here but the effect was the same, with a worthless currency and no buyers, nothing had a value. I came here to Thailand in 1999 and the "bargains" on offer were the same. Prices have been engineered for most of those years and now the lid has been taken off and prices are exploding. Can't happen again? I think not, just timing!

[RedBullHorn]

I build a second house on newly bought property (Chanote title,1 ngan 58 talang Wah, near to the main road)... She quoted me 1455 Thb/sq talang Wah, the same price she advertised 10 years ago, so i paid 230'000 Thb. I paid the transfer fee 5% at the land office base on the valuation of 2000 Thb/sq talang Wah... What a steal, things do happened i guess.

[fezzy]

Bought 20 Rai north of Sukhothai at 22,500 per Rai 3 years ago, next to the road and full of unkept neglected Agar trees , so I cleared it and planted corn and now get regular offers for 100,000 a Rai. Easy money.

[Tanaka]

I build a second house on newly bought property (Chanote title,1 ngan 58 talang Wah, near to the main road)... She quoted me 1455 Thb/sq talang Wah, the same price she advertised 10 years ago, so i paid 230'000 Thb. I paid the transfer fee 5% at the land office base on the valuation of 2000 Thb/sq talang Wah... What a steal, things do happened i guess.

Over 580.000B/rai a steal? Well, as you do not say where it is, there is no telling if you are right.

[jbrain]

I build a second house on newly bought property (Chanote title,1 ngan 58 talang Wah, near to the main road)... She quoted me 1455 Thb/sq talang Wah, the same price she advertised 10 years ago, so i paid 230'000 Thb. I paid the transfer fee 5% at the land office base on the valuation of 2000 Thb/sq talang Wah... What a steal, things do happened i guess.

Over 580.000B/rai a steal? Well, as you do not say where it is, there is no telling if you are right.

I'm also waiting for RedBullHorn to disclose the location as it must be in a prime location to be valued 800.000 Thb / Rai at the land office.

[Canada]

We bought a few parcels about 2 years ago. We figure prices have almost doubled since then, based on asking and selling prices in the area.

My personal thought on at least our area ( Nong Bua) is that as the Thai farmers scrap rice for sugar, previously worthless land is becoming income producing and therefore worth more. It is hard to find land for sale in this area that is not through the roof priced. We stumbled on a piece of uncleared land at 45,000 per rai and grabbed it this month. Almost planted now.

[thaiguzzi]

Here in Udon;

bought my first 23 rai 8 years ago, paid 9,000 baht per rai. Same year bought another 5 rai next to it for 11,000. Following year bought 10 rai for 20,000 baht per rai. Following year, about 5-6 years ago paid 40,000 baht per rai for a 26 rai plot next to the 10 from the same seller, and more importantly, around my house. All no chanote. people thought i was mad then paying 40k per rai. Now the same sort of land sells for 70k, with nothing on it, land with rubber on it can be anywhere from 90 -140k per rai no chanote, 2-4 year old trees. Trees that are producing, anywhere from 150-200k per rai. As for town prices, locations on the main thru-road, i wo'nt even go there. I thought i lived in the boondocks not Phuket!

Mike.

[Mosha]

Years ago we were holidaying on Samui. We had just seen a sign offering land at a ridiculously expensive price. She told me an uncle, who was a policeman there, told her to buy land when it was 10,000/Rai. She said to him."Why would I want land here? All it has is bananas" He told her because in another 10 years or so it will be a tourist area. She said she thought he was crazy at the time and just laughed.

[jamescollister]

Trouble with all these land price threads, they turn into a pissing contest. I made this much, you where ripped off etc etc.

Can't comment on prices elsewhere, only in my little bit of jungle, here the prices are rising weekly in places. There is no charnote land except on the main 2248.

Now I've been here 10 years and land has gone up and up and does not seem to have a ceiling as of yet. The price boom here is fueled by speculators and buyers from BKK.

!0 years ago you could sleep in the main street of our nearest town [buntharik ] no traffic. Now you can't find a parking spot. 3 years ago 7/11 arrived, next Friday Tesco Lotus opens up, building work everywhere, even a Toyota show room being built.

If this Thailand in a world economy in stagnation, what will Thailand be like in a booming world economy. Jim

[RedBullHorn]

I build a second house on newly bought property (Chanote title,1 ngan 58 talang Wah, near to the main road)... She quoted me 1455 Thb/sq talang Wah, the same price she advertised 10 years ago, so i paid 230'000 Thb. I paid the transfer fee 5% at the land office base on the valuation of 2000 Thb/sq talang Wah... What a steal, things do happened i guess.

Over 580.000B/rai a steal? Well, as you do not say where it is, there is no telling if you are right.

I'm also waiting for RedBullHorn to disclose the location as it must be in a prime location to be valued 800.000 Thb / Rai at the land office.

Sorry it took so long, i have been busy harvesting my catfishes (again )

The newly bought property (for 2nd house) is residential area next to the main road route 1209 in Amphur Muang, Tambon Mae Khaotom, Chiang Rai. My house property (1st house) is also next to the main road too and it is value at 440'000 Thb and a tag price of 680'000 Thb.

The bought proper (2nd house) is 1 Ngan 58 Talang Wah is on the left side of the main road... My 1st house is 2 Ngan 20 Talang Wah is on the right side of the main road... The valuation is different for left and right side of the main road. (Most temples are built on the left side facing sun rise)

Recently, a parcel paddy land of 10 rai plot next to main road was sold for 3.7 mil Thb, 700m away from the center of the residential...

Another plot in the residential area, 1 Ngan 88 Talang Wah opposite my new house also next to the main road was sold at the asking price of 650'000 Thb.

Residential area land and paddy land especially next to the main road have a totally different price valuation...and a increase tag price apart from the evaluation price is due to the landfill and concrete wall fences built.

Edited November 14, 2012 by RedBullHorn

[Gonsalviz]

In my area of Issan, people are buying land on steep hills for low and putting rubber trees on them. Nothing else could realistically be planted there so the price goes up. Prospecting I'd guess but it makes all the prices goes up.