Land Prices Double In Songkhla, Phuket Since 2010

[Lite Beer]

REAL ESTATE
Land prices double in Songkhla, Phuket since 2010
SOMLUCK SRIMALEE,
SUCHAWADEE SURAKUN
THE NATION

Land prices in Phuket and Songkhla more than doubled last year from 2010 on booming demand for residences.

Issara Boonyoung, president of the Housing Business Association, said land in Phuket cost Bt4 million per rai (Bt25 million per hectare) last year compared with the average of Bt2 million per rai in 2010. More property firms have come to the resort province from Bangkok and local developers have expanded their investment there.

"We launched our first townhouse project with 175 units in Thalang district of Phuket worth Bt400 million early this year and now it has already sold out," said Issara, who is also the owner and chief executive officer of Kanda Group.

Atip Bichanond, managing director of Supalai, which develops residential projects in Phuket and Songkhla, said land prices in Phuket and Hat Yai, the commercial centre of Songkhla province, had been on an uptrend since 2010.

In Phuket, both low- and high-rises are in demand, but in Hat Yai, low-rises are more popular than high-rise residences.

The two factors driving demand for land and housing in both provinces are their strong economies, which boost local purchasing power, and buyers from outside, such as Bangkok, who are looking for a vacation home. Foreigners are also increasing, he added.

Thanosak Puengdej, president of the Phuket Real Estate Associa-tion, said demand for homes in his province was strong from both locals and foreigners. This drives land and residential prices in Phuket up. Foreigners buying residences in Phuket are now from Asian markets such as Singapore, Hong Kong and mainland China, as well as from Europe, such as Russia and Scandinavia.

Thanawat Poolsil, president of the Songkhla Real Estate Associa-tion, said residential demand was focused on two districts, Hat Yai and Sadao, and was pushing up land values in both districts by 10 per cent a year. Land sales in Hat Yai are now recorded at about Bt50 million per rai and in Sadao at Bt10 million per rai.

The main residential type in Songkhla is still detached houses. However, condominiums are in greater demand from foreigners especially Malaysians who want to buy a second home.

A survey by the Real Estate Information Centre (REIC) shows that residential projects with 27,950 units were launched in Phuket through the third quarter of last year. They were worth Bt101.9 billion, of which Bt50.8 billion was for detached houses and townhouses, and Bt51.1 billion for condominiums. Up to 76 per cent of detached houses and townhouses succeeded in finding a buyer. They were worth Bt37.6 billion. The remaining 3,200 units worth Bt13.2 billion have already opened for sale.

"If no new projects are introduced, the 3,200 units will take about nine months to move," said Samma Kitsin, director-general of the REIC.

The condo market had succeeded in selling 68 per cent or 8,900 units worth Bt30.7 billion by the third quarter of last year. The remaining 4,200 units worth Bt20.4 billion have gone into inventory in the market.

They will take about seven months to sell if no new residential projects enter this market.

-- The Nation 2013-03-14

[jbrain]

Foreigners buying residences in Phuket are now from Asian markets such as Singapore, Hong Kong and mainland China, as well as from Europe, such as Russia and Scandinavia.

But, but those foreigners are not allowed to buy residences in Thailand. All they can do is form a company on which the property is registered, and then later be threated that it is all illegal.

[Jimi007]

Foreigners buying residences in Phuket are now from Asian markets such as Singapore, Hong Kong and mainland China, as well as from Europe, such as Russia and Scandinavia.

But, but those foreigners are not allowed to buy residences in Thailand. All they can do is form a company on which the property is registered, and then later be threated that it is all illegal.

They can buy a residence, they just can't own the land it's on...

[jbrain]

Foreigners buying residences in Phuket are now from Asian markets such as Singapore, Hong Kong and mainland China, as well as from Europe, such as Russia and Scandinavia.

But, but those foreigners are not allowed to buy residences in Thailand. All they can do is form a company on which the property is registered, and then later be threated that it is all illegal.

They can buy a residence, they just can't own the land it's on...

Isn't that the same. You can't hang a house up in the air isn't it ?

[Jimi007]

Foreigners buying residences in Phuket are now from Asian markets such as Singapore, Hong Kong and mainland China, as well as from Europe, such as Russia and Scandinavia.

But, but those foreigners are not allowed to buy residences in Thailand. All they can do is form a company on which the property is registered, and then later be threated that it is all illegal.

They can buy a residence, they just can't own the land it's on...

Isn't that the same. You can't hang a house up in the air isn't it ?

You can rent the land on a 30 year lease or buy a condo.

[jbrain]

You can rent the land on a 30 year lease or buy a condo.

Leasing you mean.

Not the same as owning a place. By the way the law on leasing say that all buildings built on leased land belong to the land owner at the end of the lease, which can be at ANY point within those 30 years.

I agree with you about condo's but the article mentioned also detached houses being bought by foreigners.

[jbrain]

50 mil per rai in hat yai....10mil in Sadao...?

That makes all the farmers in the adjacent areas dollar millionaires.....

Yeah right...

...and how many units can you squeeze into a rai to make it profitable?...the sums don't add up...

....just bs talk by some developer, no doubt with nefarious intents

Hidden advertising springs to mind.

[NamKangMan]

You wouldn't buy a property that you can never truly own, or have full control of, back in your own country, so why would you do it here? Especially, since the construction methods here are sh*te, and that's all you can own, the bricks and motar.

[belg]

yeah... many years you heard the theory that farang could not buy land because of the speculation it would cause... that was off course thinking to keep the big profits for thai only off course

175 townhouses for 400 millions = 2,28 million per unit (land included) + add 3 - 5 million profits per unit on that ...

all built with cheap labour from neighbouring countries building it @ 300 baht per day

Edited March 14, 2013 by belg

[byrne1916]

Foreigners buying residences in Phuket are now from Asian markets such as Singapore, Hong Kong and mainland China, as well as from Europe, such as Russia and Scandinavia.

But, but those foreigners are not allowed to buy residences in Thailand. All they can do is form a company on which the property is registered, and then later be threated that it is all illegal.

You wouldn't buy a property that you can never truly own, or have full control of, back in your own country, so why would you do it here? Especially, since the construction methods here are sh*te, and that's all you can own, the bricks and motar.

Since 2008 you can buy property using "condiminium freehold"

It can be used for apartments as well as villas. 51% of the developement must be owned by Thais but the piece you own is yours to keep.

Many people are also happy with 3 x 30 year leases, or then again there is the sham corporations.

You can argue all you want about workmanship etc but people are buying... end of story. I'm sure "back in your day" it was different.

[jbrain]

yeah... many years you heard the theory that farang could not buy land because of the speculation it would cause... that was off course thinking to keep the big profits for thai only off course

175 townhouses for 400 millions = 2,28 million per unit (land included) + add 3 - 5 million profits per unit on that ...

all built with cheap labour from neighbouring countries building it @ 300 baht per day

Bit difficult to make 3 milion profit on a 2.3 million house, not?

[jbrain]

Foreigners buying residences in Phuket are now from Asian markets such as Singapore, Hong Kong and mainland China, as well as from Europe, such as Russia and Scandinavia.

But, but those foreigners are not allowed to buy residences in Thailand. All they can do is form a company on which the property is registered, and then later be threated that it is all illegal.

You wouldn't buy a property that you can never truly own, or have full control of, back in your own country, so why would you do it here? Especially, since the construction methods here are sh*te, and that's all you can own, the bricks and motar.

Since 2008 you can buy property using "condiminium freehold"

It can be used for apartments as well as villas. 51% of the developement must be owned by Thais but the piece you own is yours to keep.

Many people are also happy with 3 x 30 year leases, or then again there is the sham corporations.

You can argue all you want about workmanship etc but people are buying... end of story. I'm sure "back in your day" it was different.

3 x 30 years leases don't exist in Thailand. 1 x 30 year is the maximum you can register and the next 30 year is an option that the owner can give, but is impossible to register, and which he can void at any given time.

Could you give just 1 example of condo freehold that has been used in villa developments, or maybe a reference to the law text would also be handy.

[Hecate]

Buy property in Hua Hin. It get less rain and less crime than Phuket, and fewer bombings (none actually) than Songkla. It's close to Bangkok. Boost my property values.

[LivinginKata]

"3 x 30 years leases don't exist in Thailand. 1 x 30 year is the maximum you can register and the next 30 year is an option that the owner can give, but is impossible to register, and which he can void at any given time."

Quite correct,despite what the property and sale people tell you, only the first 30 year lease is legal. The promise of 2 more 30 years is NOT recognised by the Thailand land offices.

[laislica]

50 mil per rai in hat yai....10mil in Sadao...?

That makes all the farmers in the adjacent areas dollar millionaires.....

Yeah right...

...and how many units can you squeeze into a rai to make it profitable?...the sums don't add up...

....just bs talk by some developer, no doubt with nefarious intents

Actually, in 2000 I personally met several old farmers on the west coast of Ireland who had cashed in on their land price boom and they were Euro millionaires! It can and did happen there so why not here?

Edited March 14, 2013 by laislica

[SgLim]

Recently giant sinkholes are appearing worldwide.

So is southern Thailand prone to similar natural occurance, in particular Krabi region where limestone karsts are a common sight.

Just curious...

[NamKangMan]

Foreigners buying residences in Phuket are now from Asian markets such as Singapore, Hong Kong and mainland China, as well as from Europe, such as Russia and Scandinavia.

But, but those foreigners are not allowed to buy residences in Thailand. All they can do is form a company on which the property is registered, and then later be threated that it is all illegal.

>You wouldn't buy a property that you can never truly own, or have full control of, back in your own country, so why would you do it here? Especially, since the construction methods here are sh*te, and that's all you can own, the bricks and motar.

Since 2008 you can buy property using "condiminium freehold"

It can be used for apartments as well as villas. 51% of the developement must be owned by Thais but the piece you own is yours to keep.

Many people are also happy with 3 x 30 year leases, or then again there is the sham corporations.

You can argue all you want about workmanship etc but people are buying... end of story. I'm sure "back in your day" it was different.

What "other people" are doing does not mean it's a wise decision.

Many people buy beer bars on Bangla Road - not many think about why so many are for sale. Why don't you buy a beer bar - everyone else is.

Does your "freehold condo" float in mid air???? It must sit on Thai owned soil.

What about if the 51% of Thai owners in the condo block vote against the 49% farang owners? (not hard, considering most of the 51% are family and/or business related)

3 x 30 year leases do not exist at Thai law. "End of story."

[oldsailor35]

Foreigners buying residences in Phuket are now from Asian markets such as Singapore, Hong Kong and mainland China, as well as from Europe, such as Russia and Scandinavia.

But, but those foreigners are not allowed to buy residences in Thailand. All they can do is form a company on which the property is registered, and then later be threated that it is all illegal.

They can buy a residence, they just can't own the land it's on...

Isn't that the same. You can't hang a house up in the air isn't it ?

errr NO !

[oldsailor35]

From my understanding, anyone who signs up for 3 x 30 year leases are being 'conned' Can anyone prove me wrong ?

[chiang mai]

From my understanding, anyone who signs up for 3 x 30 year leases are being 'conned' Can anyone prove me wrong ?

Correct

[NamKangMan]

My understanding is the first 30 years are legally binding, well, as best they can be under a Thai judicial system. The second and third lot of 30 years are nothing more than "notations" of an "agreement" and are therefore not legally binding.

[how241]

Safer to buy a condo but if your over 55 and you have a 30 year lease then your OK...Unless you have plans to leave your money to family.

[annabel]

Foreigners buying residences in Phuket are now from Asian markets such as Singapore, Hong Kong and mainland China, as well as from Europe, such as Russia and Scandinavia.

But, but those foreigners are not allowed to buy residences in Thailand. All they can do is form a company on which the property is registered, and then later be threated that it is all illegal.

They can buy a residence, they just can't own the land it's on...

Nope I am sorry but you are wrong .. you can buy a CONDO but you cannot by a residence UNLESS YOU BUILD IT YOURSELF ... otherwise you must do a long term rental... YOU CANNOT BUY A HOUSE ALREADY BUILT!!

[annabel]

Foreigners buying residences in Phuket are now from Asian markets such as Singapore, Hong Kong and mainland China, as well as from Europe, such as Russia and Scandinavia.

But, but those foreigners are not allowed to buy residences in Thailand. All they can do is form a company on which the property is registered, and then later be threated that it is all illegal.

>You wouldn't buy a property that you can never truly own, or have full control of, back in your own country, so why would you do it here? Especially, since the construction methods here are sh*te, and that's all you can own, the bricks and motar.

Since 2008 you can buy property using "condiminium freehold"

It can be used for apartments as well as villas. 51% of the developement must be owned by Thais but the piece you own is yours to keep.

Many people are also happy with 3 x 30 year leases, or then again there is the sham corporations.

You can argue all you want about workmanship etc but people are buying... end of story. I'm sure "back in your day" it was different.

You are obviously a Realtor !!

[FunFon]

Many people are also happy with 3 x 30 year leases, or then again there is the sham corporations.

-

From my understanding, anyone who signs up for 3 x 30 year leases are being 'conned' Can anyone prove me wrong ?

-

I 100% agree that both of the above scenarios have very good odds of ending badly, even in the unlikely event of an honest "seller".

The problem is that it is much much more difficult for a foreigner to find properly qualified and trustworthy advisors to represent their interests and honestly tell them about the risks involved if/when the existing laws begin to actually get enforced at some point down the road.

And that's too risky for me, never mind the fact that most of the industry is run by outright scammers and crooks in league with the officials confirming to one and all that everything's OK.

Now if someone's getting a property that will will give them years of pleasure at a cost no more than a very small percentage of his total worth, and he realizes he could maybe lose it all and he's willing to take that risk, well fine and good, but some are putting 10% of their net worth or more into these bets and I'm afraid it's very likely to end in tears.

Renting the land is simply renting the land, maximum "rights of 30 years full stop, no right of resale or sublease (usually) and don't forget rule of law means little here if the owner wants to kick you out early for any reason they're probably well-connected enough to do so. And if not easy enough to create enough problems for you that you'll want to leave of your own accord.

Personally I'd never pay more than three years at a time up front, never mind 30. . .

[youngXpat]

Buy property in Hua Hin. It get less rain and less crime than Phuket, and fewer bombings (none actually) than Songkla. It's close to Bangkok. Boost my property values.

Maybe but the cost of living is pretty up there. Helps if you got a nice pension I suppose.

Edited March 15, 2013 by youngXpat

[NamKangMan]

Many people are also happy with 3 x 30 year leases, or then again there is the sham corporations.

-

>From my understanding, anyone who signs up for 3 x 30 year leases are being 'conned' Can anyone prove me wrong ?

-

I 100% agree that both of the above scenarios have very good odds of ending badly, even in the unlikely event of an honest "seller".

The problem is that it is much much more difficult for a foreigner to find properly qualified and trustworthy advisors to represent their interests and honestly tell them about the risks involved if/when the existing laws begin to actually get enforced at some point down the road.

And that's too risky for me, never mind the fact that most of the industry is run by outright scammers and crooks in league with the officials confirming to one and all that everything's OK.

Now if someone's getting a property that will will give them years of pleasure at a cost no more than a very small percentage of his total worth, and he realizes he could maybe lose it all and he's willing to take that risk, well fine and good, but some are putting 10% of their net worth or more into these bets and I'm afraid it's very likely to end in tears.

Renting the land is simply renting the land, maximum "rights of 30 years full stop, no right of resale or sublease (usually) and don't forget rule of law means little here if the owner wants to kick you out early for any reason they're probably well-connected enough to do so. And if not easy enough to create enough problems for you that you'll want to leave of your own accord.

Personally I'd never pay more than three years at a time up front, never mind 30. . .

Also, I would like to leave any percentage of my "net worth" to my kids, upon my demise, not a Thai landlord.

[NamKangMan]

This is the ONLY house a foreigner can 100% "freehold" own, in their own name, in Thailand, any other property leaves you somewhat exposed, but the tax to get it here would be a killer. :) :)

It also gets around the transport issues on the island. :)

www.gowinnebago.com

[laislica]

This is the ONLY house a foreigner can 100% "freehold" own, in their own name, in Thailand, any other property leaves you somewhat exposed, but the tax to get it here would be a killer.

It also gets around the transport issues on the island.

www.gowinnebago.com

Surely the running costs would be the real killer?

[NamKangMan]

This is the ONLY house a foreigner can 100% "freehold" own, in their own name, in Thailand, any other property leaves you somewhat exposed, but the tax to get it here would be a killer.

It also gets around the transport issues on the island.

www.gowinnebago.com

Surely the running costs would be the real killer?

Why? It would be parked most of the time, on "public" land. Or, you could actually rent a small parcel of land, and anytime the Thai landlord wants to kick you off, at least you can take your house with you, not like now, where the Thai gf/wife keeps it or the Thai Landord.

It's 100% in your name, registered at The Land Transport Office, not The Land Titles Office. No dodgy company structures, no Thai partners/nominees needed, no need to put it in the gf's or wife's name etc etc.

It is the only house a foreigner can 100% own, in their name, in Thailand. I'm happy if anyone can prove this wrong.

Edited March 15, 2013 by NamKangMan