Condo Asking Prices In Chiang Mai

[JomtienEats]

Generally, how reasonable are the asking prices on the various property websites for condos in Chiang Mai? Having come from Jomtien/Pattaya, some of the prices being asked there were in the realm of fantasy. Chiang Mai looks to have more realistic sellers to me. I'm sure there will be edge cases of properties marked at market value, and others at double . . . but what is a good rule of thumb for determining a fair market value from an asking price?

[delanoalvis]

Try chiang mai properties. They have reasonable prices. I have used them and had no problems

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[FrisoPee]

True that. BuyinChiangMai is also good. Good prices, but heavy in the upper class... But can give you an idea

[mamborobert]

Try chiang mai properties. They have reasonable prices. I have used them and had no problems

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chiang mai properties is an agent, and does not set the prices of the condos that they have listed, but instead take a commission on the sales of them. I think the OP was more after what the costs of condos are in CM compared to other places. All I can say is that I have been shocked at just what some condos are being listed for....one off of Nimenhamin area is asking 80,000 baht per sqm. And someone in Mountain Front condo is asking 60,000 per sqm. Not sure if finding anything in the 30K - 40K range is possible anymore....

There are some one bedroom places now at the Supalai (that only just closed for pre-sales) that are reselling at 60 to 90k per sqm...and a two bedroom at 150k!

They have not even broke ground yet....and a few years away from finish.

Just to illustrate the discrepancy in prices on the same floor...facing same direction, and one at 60k per sqm for 52sqm and one at 70k per sqm for 46sqm.

Back to the OP, the absence of any regulated industry standards and that anyone can basically get a commission means that places are multiple listed through various avenues (signs, web, notices, word of mouth) often at different prices ....dealing direct with owner if possible is therefore a saving (for you and often owner).

Its is, as many have mentioned, a buyers market.

The only caution I would place is ensuring that any condo has correct Thai/Farang ratio (and that's hard with the turnover) and (God help me) be very mindful of Farang prices. They might be easier to deal with language/understanding wise but a lot want to get back money they paid (and perhaps more) rather than the true value of the condo. Particular to US/UK where there have been massive devaluations in exchange rate over 5 years, often they want to bug out and recoup for their nest egg what they paid in Pounds/Dollars not Baht.

There are lots and lots of places...a lot of Farang sellers do not remember the financial guru, Cat Stevens for the great never invest what you cannot walk away from (in Thailand)

But take your time, think a lot,

Why, think of everything you've got.

For you will still be here tomorrow, but your dreams may not.

Take your time.....there are oodles and oodles to look at.

Oh...and talk to as many owners as possible about the committee/maintenance etc.....and how stable it is, how it has been in teh past, any changes forseen

[cheeryble]

Chiangmai:

Rule 1:

The power structure in a building is all-important to it's future.

Properly set fees and maintenance management is essential.

A few of the older buildings have established committees (some don't) or "dictatorships" which work. Lower fees.

With new buildings you must look at how the developer behaved in his previous condo projects to show transparency and allow a transition to a democratic committee. Fees initially set by developer IMO high to very high (unnecessarily so).

Older buildings generally have the more central locations though there are some quite nice residential/rural new building locations on the edge of town.

Older buildings:

Unrenovsted unit in popular established building 25,000 to 33,000 per sqm. Add 3-4,000 to improve or 5 to 10,000 for a very high quality reno indeed.

New buildings:

35,000 per sqm low "economy" end not many.

40,000-45,000 average price

These are for a bog standard finish....laminate floors, economy doors and trim, tiling etc.....which doesn't come near what you get with the 5 to 10k per sqm renos I mention above.

50,000-55,000 a few better located or better finished buildings. They may still need improving if you like quality.

Even this upper end would not be of the standard.......marble/granite/stainless/parquet/equipment.....that you'd get from the high quality reno I mention for the older buildings, if you want that, add a bit. If you order off plan developer will usually allow for upgrades if you pay, so you may be able to buy a bare or unfinished unit.

I'll add....the more central of the new buildings are often locked in between or close to other buildings eg one plus nr university.

Edge f town ones can be OK with nice views if you don't mind that location. Older buildings you tend to know what you're getting and despite what people tell you properly maintained buildings do not "wear out".

But generally it's a great place to live!

[Rancid]

Sound slike the Flippers are into the new condos with prices inflating like that. The mere fact that Flippers can buy out a place that fast indicates the bubble will burst in due course, we are definitely in the real estate mania phase, none last forever but timing the end is not easy but sound suspicious already.

As previously posted I am out of condos and just looking at low end properties as renters. Think though the real bargains will come later, again as to when...

[cheeryble]

Sound slike the Flippers are into the new condos with prices inflating like that..

Inflating like what?

There has generally been a very modest rise in existing condo prices.

As for new, I added the figures up and seems to me 40,000 is what you need to put a development together if you want a fair profit.

[NeverSure]

Sound slike the Flippers are into the new condos with prices inflating like that..

Inflating like what?

There has generally been a very modest rise in existing condo prices.

As for new, I added the figures up and seems to me 40,000 is what you need to put a development together if you want a fair profit.

And, this was exactly the thinking and the story just before the US housing crash. Costs of land, labor and materials were up, so the cost of new construction "justified" the prices. But then look at what happened to the value of that land, the cost of (unemployed) labor, and materials right after the crash. People were paying $250 US per square meter just for framing labor at the very top. Historically it had been more like $40 per sm. Today I can get it done for $35 per sm, or about $3 per square foot and the workers are hungry for the work. They still make a decent middle class income at $3 per square foot on a basic house.

Until you've seen a market where "everyone" believes that prices "always" go up, and then seen prices crash almost overnight to just more than 1/2 what they were the week before and still no buyers, it's hard to believe it can happen.

The irony is that it's the false belief that prices always go up that causes the bubble followed by the burst. Ironically, it seems that no one including lenders can see all of the over building, all of the vacancies, and all of the unsold properties until it's too late. Crashes, including 1929 happen so fast that they have people jumping out of windows. Yesterday's wealthy are either on the street begging food, or they have been a jumper if their wealth was in that bubble.

[cheeryble]

So we may analyse this intelligently could I ask again what you mean by condo inflation here?

I don't see any connection to flippers, so perhaps you could tell us what you mean.

We have to remember that CM is a growing city with certain elements of genuine, hopefully sustainable, demand growth......Bangkok exodus etc.

Remember too that these new buildings are not aimed at farang, they're aimed at Thais. I'm not sure that I can judge the

Thai market as well as a Thai can.

I do have a concern about the many new condos being built. But so far they seem to be filling up, and I have several friends with off plan orders for units in, genuine buys, no flippers. If buildings start failing to sell well, banks will withhold loans for further development until the slack is taken up.

On comparison with Singapore, Bali, even Southern Thailand things are of course very cheap.

[WinnieTheKhwai]

Try chiang mai properties. They have reasonable prices. I have used them and had no problems

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chiang mai properties is an agent, and does not set the prices of the condos that they have listed, but instead take a commission on the sales of them.

Yes, they get one month rent from the renter. This commission should not impact the rental price too much. Its the owner that you can negotiate with.

[CMweb]

Try chiang mai properties. They have reasonable prices. I have used them and had no problems

Sent from my GT-N7100 using Thaivisa Connect App

chiang mai properties is an agent, and does not set the prices of the condos that they have listed, but instead take a commission on the sales of them.

Yes, they get one month rent from the renter. This commission should not impact the rental price too much. Its the owner that you can negotiate with.

Right, 1 month for 1 year contract or less if the renting time is less, 3% for a sale and this pays only the owner not the tenant or buyer.

There are properties you cannot get without an agent, some owners are not here and ask the agency for help. We also have some nice properties if you like to have a look http://www.buyrentchiangmai.com

[JomtienEats]

Just wanted to say thank you for the detailed responses to my question. It shows an amazing generosity of the forum members. In particular, thanks to cheeryble and mamborobert - some real information gold there in helping to value a condo in CM at the moment. Thank you.

[chiangmaikelly]

Sound slike the Flippers are into the new condos with prices inflating like that..

Inflating like what?

There has generally been a very modest rise in existing condo prices.

As for new, I added the figures up and seems to me 40,000 is what you need to put a development together if you want a fair profit.

And, this was exactly the thinking and the story just before the US housing crash. Costs of land, labor and materials were up, so the cost of new construction "justified" the prices. But then look at what happened to the value of that land, the cost of (unemployed) labor, and materials right after the crash. People were paying $250 US per square meter just for framing labor at the very top. Historically it had been more like $40 per sm. Today I can get it done for $35 per sm, or about $3 per square foot and the workers are hungry for the work. They still make a decent middle class income at $3 per square foot on a basic house.

Until you've seen a market where "everyone" believes that prices "always" go up, and then seen prices crash almost overnight to just more than 1/2 what they were the week before and still no buyers, it's hard to believe it can happen.

The irony is that it's the false belief that prices always go up that causes the bubble followed by the burst. Ironically, it seems that no one including lenders can see all of the over building, all of the vacancies, and all of the unsold properties until it's too late. Crashes, including 1929 happen so fast that they have people jumping out of windows. Yesterday's wealthy are either on the street begging food, or they have been a jumper if their wealth was in that bubble.

I don't think the situation is the same at all, BANGKOK, Dec 13 – Standard & Poor’s Rating Services has affirmed Thailand’s stable outlook on long-term foreign and local currency ratings, citing a favourable external position, light government indebtedness and the credibility of the country’s monetary policy as the main rating supports.

On the other hand Standard & Poor’s announced Friday (Aug 2011) night that it has downgraded the U.S. credit rating for the first time, dealing a symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.

[cheeryble]

Just wanted to say thank you for the detailed responses to my question. It shows an amazing generosity of the forum members. In particular, thanks to cheeryble and mamborobert - some real information gold there in helping to value a condo in CM at the moment. Thank you.

Nice thankyou........thankyou.

[NeverSure]

I don't think the situation is the same at all, BANGKOK, Dec 13 – Standard & Poor’s Rating Services has affirmed Thailand’s stable outlook on long-term foreign and local currency ratings, citing a favourable external position, light government indebtedness and the credibility of the country’s monetary policy as the main rating supports.

On the other hand Standard & Poor’s announced Friday (Aug 2011) night that it has downgraded the U.S. credit rating for the first time, dealing a symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.

And just exactly what does a government's credit rating have to do with whether a housing market is overbuilt or overpriced? At the time of the 1929 crash and Great Depression, the US was on the gold standard with every dollar backed by real gold. That didn't stop the private sector from going crazy into a bubble on Wall Street or in housing and then taking a decade long crash into depression.

[cheeryble]

I don't think the situation is the same at all, BANGKOK, Dec 13 – Standard & Poor’s Rating Services has affirmed Thailand’s stable outlook on long-term foreign and local currency ratings, citing a favourable external position, light government indebtedness and the credibility of the country’s monetary policy as the main rating supports.

On the other hand Standard & Poor’s announced Friday (Aug 2011) night that it has downgraded the U.S. credit rating for the first time, dealing a symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.

And just exactly what does a government's credit rating have to do with whether a housing market is overbuilt or overpriced?

I'd say pointing out Thailand's healthy economy compared to the US which you were for some reason citing prices from as relevant to Chiangmai is pretty relevant.

Perhaps you or Rancid can cite some data which supports the notion that there is more than reasonable condo price inflation/prices are going up irrationally/people are thinking they can only go up.............which you both seem to be saying.

Hey it may be true.......but I'm sure you won't want others to rely on unsupported notions you may have.

So inspecting the beef would be good.

(I ask might add about 6 years ago I was shown the original prices in a condo block from I think 1993 and they hadn't gone up much at all, maybe 20%. It was a bit run down and has come up a lot since, now the prices are perhaps double the original or so. USing the rule of 72 this would equate to price inflation of about 3.5%. The new blocks are more, adding about 25-50%, but even a 5%pa rise over the last couple of decades doesn't sound to me all that much in a fast-growing city in a fast growing country in a fast growing region. Or is it?)

[LawrenceChee]

I would caution against buying as well unless you have a heavy vested interest to stay in CM for the long term. Rental market has reasonably price range that seems to suit every taste and makes it much more viable financially without the worries

For the heavy investors, Bangkok and Singapore, Hong Kong & China seems to be better for fixed capital gains. Chiang Mai has some price gains but again the heavy buying comes from Thai and they would not be paying silly prices anytime soon....

[WinnieTheKhwai]

Right, 1 month for 1 year contract or less if the renting time is less, 3% for a sale and this pays only the owner not the tenant or buyer.

There are properties you cannot get without an agent, some owners are not here and ask the agency for help. We also have some nice properties if you like to have a look http://www.buyrentchiangmai.com

Then again, I would prefer to have an owner not too far away (or a person he designates) in case stuff comes up and needs repairs. Doesn't mean the owner has to live next door or anything, but there needs to be some relative or other person who can take care of things when things need taken care of. A real estate agent is not going to fix a drainpipe or roof that needs maintenance.

Typically of course, an owner is not too far away, also when an agent is used.

[KRS1]

I've always wondered whether the prices advertised by real estate agencies in Thailand are raised without the knowledge of the owner, and if they say no... whether to believe them or not.

[CBR250]

It would be helpful to hear from people who have sold condos over the past 2 years to get a clearer picture of the nature of the falang condo market. How long are listings before sales? What features seemed most desirable for buyers? What mark downs on listed price have people accepted? Etc

[NeverSure]

I don't think the situation is the same at all, BANGKOK, Dec 13 – Standard & Poor’s Rating Services has affirmed Thailand’s stable outlook on long-term foreign and local currency ratings, citing a favourable external position, light government indebtedness and the credibility of the country’s monetary policy as the main rating supports.

On the other hand Standard & Poor’s announced Friday (Aug 2011) night that it has downgraded the U.S. credit rating for the first time, dealing a symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.

And just exactly what does a government's credit rating have to do with whether a housing market is overbuilt or overpriced?

I'd say pointing out Thailand's healthy economy compared to the US which you were for some reason citing prices from as relevant to Chiangmai is pretty relevant.

Perhaps you or Rancid can cite some data which supports the notion that there is more than reasonable condo price inflation/prices are going up irrationally/people are thinking they can only go up.............which you both seem to be saying.

Hey it may be true.......but I'm sure you won't want others to rely on unsupported notions you may have.

So inspecting the beef would be good.

(I ask might add about 6 years ago I was shown the original prices in a condo block from I think 1993 and they hadn't gone up much at all, maybe 20%. It was a bit run down and has come up a lot since, now the prices are perhaps double the original or so. USing the rule of 72 this would equate to price inflation of about 3.5%. The new blocks are more, adding about 25-50%, but even a 5%pa rise over the last couple of decades doesn't sound to me all that much in a fast-growing city in a fast growing country in a fast growing region. Or is it?)

The country's economy has nothing to do with it. The questions to ask are: "Has the private sector overbuilt and over speculated the housing market? Is there too much supply in relation to demand? Are the prices really affordable to the target market? If so, how much higher can they go before they aren't affordable? Is the rental rate enough to justify the investment based on ROI? Is it cheaper long term to rent than to buy, and if so, will people continue to buy? How many more homes and condos can the market absorb in a reasonable time? Are sales still brisk, or are properties languishing on the market? If properties are languishing, how would it make sense to still build more? What happens to the value of buildable land, including the land under existing units if building stops and land sales stop?"

Same goes for farm land. Does the income potential justify the price, or instead is the price based on speculation of even higher prices for no good economic farming reason?

Any negative answer to even one of those questions is a warning sign of a speculative bubble.

[TommoPhysicist]

The country's economy has nothing to do with it. The questions to ask are: "Has the private sector overbuilt and over speculated the housing market? Is there too much supply in relation to demand? Are the prices really affordable to the target market? If so, how much higher can they go before they aren't affordable? Is the rental rate enough to justify the investment based on ROI? Is it cheaper long term to rent than to buy, and if so, will people continue to buy? How many more homes and condos can the market absorb in a reasonable time? Are sales still brisk, or are properties languishing on the market? If properties are languishing, how would it make sense to still build more? What happens to the value of buildable land, including the land under existing units if building stops and land sales stop?"

Same goes for farm land. Does the income potential justify the price, or instead is the price based on speculation of even higher prices for no good economic farming reason?

Any negative answer to even one of those questions is a warning sign of a speculative bubble.

Great post there Neversure.

Unfortunately those who have purchased foolishly will continue to talk up the marker for newbies.

[NeverSure]

Those who have purchased foolishly had better get the hell out. If they can. Which I doubt.

[WinnieTheKhwai]

I've always wondered whether the prices advertised by real estate agencies in Thailand are raised without the knowledge of the owner, and if they say no... whether to believe them or not.

Of course they don't.. There is an agreement with the property owner on what the price should be (and sometimes if it can be discounted, and by how much). Raising the prices wouldn't make it harder to get a renter, so the property owner wouldn't be pleased with that.

[KRS1]

I've always wondered whether the prices advertised by real estate agencies in Thailand are raised without the knowledge of the owner, and if they say no... whether to believe them or not.

Of course they don't.. There is an agreement with the property owner on what the price should be (and sometimes if it can be discounted, and by how much). Raising the prices wouldn't make it harder to get a renter, so the property owner wouldn't be pleased with that.

I have ran into atleast two 'real estate' agents during my time in Thailand that have refused fair offers or did not even submit them to owners. On a couple of other occasions agents have tried to rent out properties at a higher price than indicated by the owners and have tried to collect the difference.

Its not western real estate rules here. In thailand pretty much anything goes if you dont get caught.

[cheeryble]

The country's economy has nothing to do with it.

Really?

The questions to ask are: "Has the private sector overbuilt and over speculated the housing market? Is there too much supply in relation to demand? Are the prices really affordable to the target market? If so, how much higher can they go before they aren't affordable? Is the rental rate enough to justify the investment based on ROI? Is it cheaper long term to rent than to buy, and if so, will people continue to buy? How many more homes and condos can the market absorb in a reasonable time? Are sales still brisk, or are properties languishing on the market? If properties are languishing, how would it make sense to still build more?

Valid question.

The question is, on what evidence do you base your answers to your own questions above? (because you obviously have a conclusion, you are taking the very bold position of telling people to sell out their homes fast.)

What happens to the value of buildable land, including the land under existing units if building stops and land sales stop?"

Valid question.....but how relevant?

Happily because of bulk occupancy in condos sharing the cost, the land price per unit comes out very small number of percent in proportional terms.

Labour costs which you previously mention? Well I don't see it and in any case don't begrudge people who work hard getting a fair whack.

Once again I'm not taking a position here, I would merely like to see good evidence from which to form opinions.

Because an unsustainable bubble and crash is not the only conclusion.

There are shades of grey...........sustained boom/steady rises/flatlining/easing off periods/modest pullbacks/busts. Look to other cities in the East and there have been many cases of very strong sustained growth (albeit with pullbacks).....is CM different? Even in a flatlining or modest pullback period it's lovely to avoid rent and have your own place. So our only real concern is timing and avoiding a price bubble. Well right now I have given some evidence of absolutely no bubble in the established buildings, and you will have to tell us why there is one in the new ones.

I have suggested a price inflation rate since 1993 based on limited data.

Do you find it unreasonable (it may be)? If so why?

If the inflation rate is valid, do you think prices always go up in gentle straight lines? I'd say they generally have flat or even negative periods with bursts forward. The bursts may, repeat may, be quite acceptable given positive factors such as BKK floods, increasing internationality, internet revolution, hi-speed train, highways from China.

We've had a long flat period in the 2000s after unacceptably loose lending causing a major bubble and bust in the middle.

Is lending too loose now, or are prices merely playing catch-up to the norm?

So again perhaps you or Rancid could fill us in on your thinking.

If it's just based on "it feels that way", fair enough, just tell us. It feels like a lot of condos suddenly going up to me, but how many units in proportion to those existing?

I only know the ones built so far have filled up, and that was before the BKK floods, the train line etc.

You are suggesting people sell out in what really could be a long boom which seems at least as risky as buying into one with the associated benefits of having a crib and being removed from the vagaries of foreign exchange to pay the rent or buy down the road.

It would behoove us all to analyse as intelligently as we can.

[cheeryble]

I guess an answer ain't coming soon......but I have another question myself.

Anyone know the details of the "no buildings over 5 floors" thing I've heard about for central CM?

It is cited as a reason there will not be a huge building stealing the west side view at Hillside 4, and today a friend was mentioning it as not only only on Huay Kaew.

Could even be the reason for the sudden burst of condos going up which may have got permission before the new rules came in?

[TommoPhysicist]

Please explain what you mean by "purchase foolishly".....

Riverside?

[NeverSure]

The country's economy has nothing to do with it.

Really?

The questions to ask are: "Has the private sector overbuilt and over speculated the housing market? Is there too much supply in relation to demand? Are the prices really affordable to the target market? If so, how much higher can they go before they aren't affordable? Is the rental rate enough to justify the investment based on ROI? Is it cheaper long term to rent than to buy, and if so, will people continue to buy? How many more homes and condos can the market absorb in a reasonable time? Are sales still brisk, or are properties languishing on the market? If properties are languishing, how would it make sense to still build more?

Valid question.

The question is, on what evidence do you base your answers to your own questions above? (because you obviously have a conclusion, you are taking the very bold position of telling people to sell out their homes fast.)

What happens to the value of buildable land, including the land under existing units if building stops and land sales stop?"

Valid question.....but how relevant?

Happily because of bulk occupancy in condos sharing the cost, the land price per unit comes out very small number of percent in proportional terms.

Labour costs which you previously mention? Well I don't see it and in any case don't begrudge people who work hard getting a fair whack.

Once again I'm not taking a position here, I would merely like to see good evidence from which to form opinions.

Because an unsustainable bubble and crash is not the only conclusion.

There are shades of grey...........sustained boom/steady rises/flatlining/easing off periods/modest pullbacks/busts. Look to other cities in the East and there have been many cases of very strong sustained growth (albeit with pullbacks).....is CM different? Even in a flatlining or modest pullback period it's lovely to avoid rent and have your own place. So our only real concern is timing and avoiding a price bubble. Well right now I have given some evidence of absolutely no bubble in the established buildings, and you will have to tell us why there is one in the new ones.

I have suggested a price inflation rate since 1993 based on limited data.

Do you find it unreasonable (it may be)? If so why?

If the inflation rate is valid, do you think prices always go up in gentle straight lines? I'd say they generally have flat or even negative periods with bursts forward. The bursts may, repeat may, be quite acceptable given positive factors such as BKK floods, increasing internationality, internet revolution, hi-speed train, highways from China.

We've had a long flat period in the 2000s after unacceptably loose lending causing a major bubble and bust in the middle.

Is lending too loose now, or are prices merely playing catch-up to the norm?

So again perhaps you or Rancid could fill us in on your thinking.

If it's just based on "it feels that way", fair enough, just tell us. It feels like a lot of condos suddenly going up to me, but how many units in proportion to those existing?

I only know the ones built so far have filled up, and that was before the BKK floods, the train line etc.

You are suggesting people sell out in what really could be a long boom which seems at least as risky as buying into one with the associated benefits of having a crib and being removed from the vagaries of foreign exchange to pay the rent or buy down the road.

It would behoove us all to analyse as intelligently as we can.

I can look only at the number of vacancies and unsold units, and the length of time it takes to sell or rent a unit. If that percentage gets too high, and it is hard to sell or rent at asking prices, then the market surely is overbuilt.

The answers to questions of value always boil down to the same law which hasn't been revoked. Supply and demand. If someone thinks the supply is in line with demand, and there is therefore a ready group of buyers and renters for the supply, then he must conclude it isn't overbuilt and that prices aren't too high. If the opposite is true and sales and rentals are languishing at the asking prices and there are many vacancies, then one might conclude that there is a problem.

I conclude that there is a problem. Someone else may not. It's his money.

[NeverSure]

Those who have purchased foolishly had better get the hell out. If they can. Which I doubt.

"Which I doubt"?? So, the property market in cm has ceased to operate? Come now chicken little, is the sky really falling?

I ask only if there are a lot of vacancies for sales and rentals, and if it might take a long time to fill the unit - too long at the asking price. I ask only if the rapid building is therefore creating an over supply. I ask if the units are therefore selling and renting briskly at the current needed volume and at the current asking prices.

The answer to the sole question of supply vs demand with more units going up rapidly steers my thinking.