Real estate expert says Bangkok's Siam Square is overvalued

[webfact]

Real estate expert says Siam Square is overvalued

By Coconuts Bangkok

BANGKOK: -- On Wednesday, veteran real estate evaluator Sopon Pornchokchai, president of the Agency for Real Estate Affairs (AREA), said that the land in and around Bangkok’s Siam Square might be grossly overvalued.

According to Sopon’s research, land surrounding Siam Square should not be valued at greater than THB2 million per square wah (an area roughly equal to four square miles).

He said that prices should increase to about THB1.7 million per square wah by the year’s end.

The land surrounding Siam Square is generally regarded as the most expensive in Thailand.

Full story: http://bangkok.coconuts.co/2013/06/13/real-estate-expert-says-siam-square-overvalued

-- Coconuts Bangkok 2013-06-13

[OzMick]

I knew it was a good decision not to buy it.

[jaidam]

Pardon my ignorance but in a largely free market, how can a commodity like land become "overvalued"?

Surely the laws of supply and demand dictate the price at any given time?

Sounds like Sopon has sour grapes afer missing out on buying real estate in the Siam square area.

[cyberholz]

... THB2 million per square wah (an area roughly equal to four square miles)

should probably read

equal to four square METERS.

Otherwise I'm definitely a multi-millionaire with my few talang wahs here at Ekkamai...

[MacWalen]

Pardon my ignorance but in a largely free market, how can a commodity like land become "overvalued"?

Surely the laws of supply and demand dictate the price at any given time?

Sounds like Sopon has sour grapes afer missing out on buying real estate in the Siam square area.

Exactly. Price is what the market thinks it is. If someone will be willing to pay more it will cost even more. Very relative, supply and demand.

[Payboy]

Remind me again, who owns that land?

[retell]

thats cheaper than the land inside buriram city

[smutcakes]

I presume where the article says an area roughly 4 square miles, it should be roughly 4 square meters?

I presume that it is also all a little pie in the sky as the land around there is owned by either the the Crown or by Chula, and as far as I am aware it is not being sold, only leased out.

[tomross46]

I presume where the article says an area roughly 4 square miles, it should be roughly 4 square meters?

I presume that it is also all a little pie in the sky as the land around there is owned by either the the Crown or by Chula, and as far as I am aware it is not being sold, only leased out.

Could it be that some greedy property developer wants the land. I could have been mistanken to thing that there were property developers that were not greedy. Is this also the area that was burned down during the riots in 2010?

[WhizBang]

Is this also the area that was burned down during the riots in 2010?

The cinema opposite the BTS station was torched, but that was all in the Siam Square area that I am aware of.

BIG development going up there now.

[Chrisswe]

The hole Bangkok is overvalued!! Reason most of Bangkok already under seawater level !!!

[bigbamboo]

Time for another land auction then? After the guide price has been substantially reduced of course.

[itchybum]

Prime waterfront land is expensive in any city.

[BangkokHank]

As Warren Buffett so succinctly put it: "Price is what you pay. Value is what you get."

There is such a thing as a reasonable price - and an unreasonable price - for any asset. This reasonable price can be determined by comparing the income-earning potential of the given asset to other assets, modified, of course, to reflect the differences in the assets being compared.

So, as some people have already pointed out, prices can - and often do - diverge from values.

[Thait Spot]

... THB2 million per square wah (an area roughly equal to four square miles)

should probably read

equal to four square METERS.

Otherwise I'm definitely a multi-millionaire with my few talang wahs here at Ekkamai...

Yes - an incredible mistake.

I'll take the lot a t double that rate

[PREM-R]

Remind me again, who owns that land?

Chulalongkorn University is the owner of Siam Square, did you think it was someone else?

[itchybum]

Remind me again, who owns that land?

Chulalongkorn University is the owner of Siam Square, did you think it was someone else?

mbk also I believe innit?

[PREM-R]

Remind me again, who owns that land?

Chulalongkorn University is the owner of Siam Square, did you think it was someone else?

mbk also I believe innit?

I believe that you are correct

[Jasun]

There has to be a motive here somewhere.

[Thai at Heart]

Is there anything for sale that is undeveloped there?

[kblaze]

TV uses coconuts stories that coconuts gets from "the other news site"...ummmhmmm...

[soi41]

TV uses coconuts stories that coconuts gets from "the other news site"...ummmhmmm...

All of them hoping, for you to hit the magic sponsor-button!!

[HerbalEd]

Pardon my ignorance but in a largely free market, how can a commodity like land become "overvalued"?

Surely the laws of supply and demand dictate the price at any given time?

Sounds like Sopon has sour grapes afer missing out on buying real estate in the Siam square area.

Pardon my ignorance but in a largely free market, how can a commodity like land become "overvalued"?

Surely the laws of supply and demand dictate the price at any given time?

Sounds like Sopon has sour grapes afer missing out on buying real estate in the Siam square area.

You say "pardon my ignorance" but then infer that Sopon's interpretation of real estate prices are only "sour grapes" when obviously he has extensive professional experience that qualifies him to evaluate real estate in Thailand.

[tragickingdom]

Yes most areas in Bangkok and other cities are grossly overvalued. It is what someone pays for it. But beware, the expert hopes that by telling this the prices will drop, he might be representing a buyer.

[Payboy]

Remind me again, who owns that land?

Chulalongkorn University is the owner of Siam Square, did you think it was someone else?

I thought Chula holds the 90 year old lease from CPB.

[metisdead]

Off topic posts have been removed.

[ratcatcher]

Remind me again, who owns that land?

Chulalongkorn University is the owner of Siam Square, did you think it was someone else?

Maybe it belongs to the Crown Property Bureau as does all the land between Payathai, Saen Saeb Canal and Ratchaprasong.

http://en.wikipedia.org/wiki/File:Map_Siam_Ratchaprasong.png

http://en.wikipedia.org/wiki/Siam_District

[PREM-R]

Remind me again, who owns that land?

Chulalongkorn University is the owner of Siam Square, did you think it was someone else?

Maybe it belongs to the Crown Property Bureau as does all the land between Payathai, Saen Saeb Canal and Ratchaprasong.

http://en.wikipedia.org/wiki/File:Map_Siam_Ratchaprasong.png

http://en.wikipedia.org/wiki/Siam_District

"Maybe it belongs to the Crown Property Bureau as does all the land between Payathai, Saen Saeb Canal and Ratchaprasong."

Siam Square is owned by Chulalongkorn University and is managed by its Property Management Office, known as Chula Property. .

[ratcatcher]

Remind me again, who owns that land?

Chulalongkorn University is the owner of Siam Square, did you think it was someone else?

Maybe it belongs to the Crown Property Bureau as does all the land between Payathai, Saen Saeb Canal and Ratchaprasong.

http://en.wikipedia.org/wiki/File:Map_Siam_Ratchaprasong.png

http://en.wikipedia.org/wiki/Siam_District

"Maybe it belongs to the Crown Property Bureau as does all the land between Payathai, Saen Saeb Canal and Ratchaprasong."

Siam Square is owned by Chulalongkorn University and is managed by its Property Management Office, known as Chula Property. .

Touché

[Time Traveller]

Pardon my ignorance but in a largely free market, how can a commodity like land become "overvalued"?

Surely the laws of supply and demand dictate the price at any given time?

Sounds like Sopon has sour grapes afer missing out on buying real estate in the Siam square area.

The answer is because land is not the same price everywhere. If one sq meter of land is much more expensive than one sq meter of land elsewhere, the valuation is done by comparing the rental yield at that place against the average rental yield of comparable real estate. If the rental yield is significantly less than average (ie. price is more expensive) then they declare that place as overvalued. Even is the land price elsewhere is much less per sq meter it could still be declared overvalued if the rental yield is much below average yields on comparable property.