Could Chiang Mai be top Asian city for investors?

[CMfoodie]

This article seems to be lifted from the recent FT article about Chiang Mai's glorious investment opportunities. Thoughts?

When it comes to Thai property investment, it is the instinct of most to head to Bangkok, but savvy buyers may instead choose to put their money in Chiang Mai real estate. Tourism numbers are increasing and the city remains a business and academic hub. This is a departure from previous years and Chiang Mai has historically been looked down on as Bangkok's rural cousin. It's decline began before the economic crisis hit, but things seem to be changing for the city.

MORE:

http://www.propertyshowrooms.com/thailand/property/news/could-chiang-mai-top-asian-city-for-investors_312833.html

[stament]

Always seems to be plenty of property around whenever I go there, so unless things have changed drastically I don't think supply is an issue which would surely be one of the main driving factor for prices wouldn't it?

[rubberduck]

Sure go invest in Chiangmai and loose all of your money

[L&J]

It is quite probable that Chiang Mai will in the next decade become a focal point for relocation/second residence for

the money class from Bangkok, Singapore, Hong Kong and China. The development that is taking place (Central Festival

and Promenada) is designed to fill the infrastructure "needs" of those people. Building a second airport and high speed rail

links are also part of what that group wants to have available. When the government finally decides to allow casino operations

it will complete the picture. The investments that are taking place are not designed to pay off big immediately but they will in another

five to ten years.

[Mapguy]

OP, it depends. Some quick thoughts:

If you have a short horizon and only look at the immediate area, I suggest that residential and commercial is being overbuilt for speculative reasons and because of changes in property development laws.

Medium term development seems valid for any but manufacturing. Chiang Mai remains an agricultural, administrative, educational, recreational and tourist center. There are still some grand development plans that have (blessedly) never hatched, such as casinos and monorails up the face of Doi Suthep from the Night Safari!

Long-term development will be focused on the Route 1 (AH2 and AH 3) corridor. Chiang Mai in the wrong valley! "AH" stands for "Asian Highway." The "AH" signs are already being posted, in case you haven't noticed.

Chiang Mai is basically at the end of the line. If you look at transportation by road and rail, it is very clear:

Asian Highway System: http://en.wikipedia.org/wiki/File:Asian_Highways.png

High speed Rail: http://www.nytimes.com/2013/01/02/world/asia/china-builds-a-railroad-and-laos-bears-the-cost.html?_r=0 Check out the map with the article. It shows all the planned development in Thailand which is currently seriously discussed (as part of a larger plan) as well as the immediate concern with Laos.

[elektrified]

I think a lot of these articles suggesting "glorious investment opportunities" here are backed by sellers/speculators who are desperate to off their investments which they paid too high a price for, before the bubble bursts.

[heybruce]

If foreignors were allowed to own property and not just condos land prices would jump almost immediately as I and many others rushed to buy. However I don't expect that to happen, and for every reason one can think of to justify investing in property in Chiang Mai, there is a reason to have doubts (political gridlock, questions as to when or if the high speed rail will be built, corruption, air quality, straining infrastructure, a history of military coups, etc.). I'll just continue to rent for the time being.

[hellodolly]

OP, it depends. Some quick thoughts:

If you have a short horizon and only look at the immediate area, I suggest that residential and commercial is being overbuilt for speculative reasons and because of changes in property development laws.

Medium term development seems valid for any but manufacturing. Chiang Mai remains an agricultural, administrative, educational, recreational and tourist center. There are still some grand development plans that have (blessedly) never hatched, such as casinos and monorails up the face of Doi Suthep from the Night Safari!

Long-term development will be focused on the Route 1 (AH2 and AH 3) corridor. Chiang Mai in the wrong valley! "AH" stands for "Asian Highway." The "AH" signs are already being posted, in case you haven't noticed.

Chiang Mai is basically at the end of the line. If you look at transportation by road and rail, it is very clear:

Asian Highway System: http://en.wikipedia.org/wiki/File:Asian_Highways.png

High speed Rail: http://www.nytimes.com/2013/01/02/world/asia/china-builds-a-railroad-and-laos-bears-the-cost.html?_r=0 Check out the map with the article. It shows all the planned development in Thailand which is currently seriously discussed (as part of a larger plan) as well as the immediate concern with Laos.

Talk of high speed rail is a joke. Yingluck's kid sat down and drew a bunch of lines on the map.

The proposed HSR to Chiang Mai is going to go about a fourth of the way with government money and private investors will do the rest according to the plan.

Any HSR in Thailand will not start for at least 5 years and only on a very limited scale.

The best chance we have in Thailand of seeing HSR is if China goes ahead with there plan to run it all the way from South to North in order to connect to Peiking. I believe there was mention of a spur to Chiang Rai.

[OldChinaHam]

It looks to me like all the signs point toward Chiang Mai getting ready to truly take off.

It always seems this way, that I find a nice place, then 5 years down the line, the place is ruined by rampant development.

A sleepy little town in Florida became nationally known, and then ruined.

Then, it felt just like Chiang Mai feels to me now.

Also, I really feel that what happens here will ultimately depend on what happens in China.

[mascarakatze]

It looks to me like all the signs point toward Chiang Mai getting ready to truly take off.

It always seems this way, that I find a nice place, then 5 years down the line, the place is ruined by rampant development.

A sleepy little town in Florida became nationally known, and then ruined.

Then, it felt just like Chiang Mai feels to me now.

Also, I really feel that what happens here will ultimately depend on what happens in China.

lonely planet must follow you around and voila where you land becomes the next chic

[OldChinaHam]

It looks to me like all the signs point toward Chiang Mai getting ready to truly take off.

It always seems this way, that I find a nice place, then 5 years down the line, the place is ruined by rampant development.

A sleepy little town in Florida became nationally known, and then ruined.

Then, it felt just like Chiang Mai feels to me now.

Also, I really feel that what happens here will ultimately depend on what happens in China.

lonely planet must follow you around and voila where you land becomes the next chic

Apparently so,

So unfortunate for me,

And the places I travel to.

[nikster]

In this day and age, whether or not a high speed railroad goes through the town has no impact at all at development here. Also who knows when and if that thing is going to get finished - it might easily take 25 years, too long to speculate on.

Whether or not this is a bubble, and when or if it will end: If you can answer those questions definitely you'll make a lot of money.

[alant]

If foreignors were allowed to own property and not just condos land prices would jump almost immediately as I and many others rushed to buy. However I don't expect that to happen, and for every reason one can think of to justify investing in property in Chiang Mai, there is a reason to have doubts (political gridlock, questions as to when or if the high speed rail will be built, corruption, air quality, straining infrastructure, a history of military coups, etc.). I'll just continue to rent for the time being.

I do wonder if the massive amount of building in Chiang Mai is, in part, due to this being an attractive area for overseas purchasers. I am thinking in particular of Singaporeans who, in common with all nationals off the AEC will be free to live, work, own businesses, land and property in all ASEAN countries. This is less than 1.5 years off I believe.

[Muirton]

A trade rag is hardly the source of wisdom and truth regarding investing in Chiang Mai. But Chiang Mai has one advantage over Bangkok that is increasing every minute, every hour, every day, every month, every year. Chiang Mai is 1000 feet above the sea, Bangkok is every minute sinking into it. That's Wiki sayin', not me.

[alant]

I don't know about investment but where oh where are all the people going to come from to fill all of the houses being built? There are huge housing developments everywhere.

Sure the Thais prefer new houses to old houses but still I do not see massive areas of older houses being demolished.

Someone is investing in this area and investing in a big way.

[Just1Voice]

5 years ago we bought a house in a small, privately owned development, that had plans for a total of 100 houses. There were only 3 other developments within 3-5 kilometers from us, and all of them were very "upper end" developments. Other than that, nothing but a temple and hundreds of rai of rice paddies. Now there are home improvement companies, paint companies, restaurants out the ying-yang, new 7/11's, more housing developments popping up like mushrooms in a forest after a good rain, so forth and so on. Oh, and Pramada is only a 3-4 minuted drive from where we are.

We're actually getting ready to put our house up for sale and look for some land where we can build a new, and smaller one. My wife spoke to a friend who is a real estate agent and was told that when we're ready, she would be able to easily sell ours to one of the many clients from BKK who are looking for nice homes here in CM. It's still a decent location, but things are getting a bit crowded in my opinion, and besides, we don't need a house this big any more. It served it's purpose, but now time to sell and downsize a bit.

[worgeordie]

When Bangkok finally sinks into the mud ,people will have to move somewhere,

thats why people from Bangkok are buying land in the North and Isan,taking a

very long term view for their future descendants.

A lot of the buying is done on speculation ,but it will come good in the end,

unlike the West , land prices don't really fall, as the Banks don't so aggressively

repossess property in default, and sell it off at a massive discount .

Wish I had gotten the wife to buy more land when I first came here, bht 3K a

square wah is now bht 30k and still rising .

regards Worgeordie

[Baerboxer]

It is quite probable that Chiang Mai will in the next decade become a focal point for relocation/second residence for

the money class from Bangkok, Singapore, Hong Kong and China. The development that is taking place (Central Festival

and Promenada) is designed to fill the infrastructure "needs" of those people. Building a second airport and high speed rail

links are also part of what that group wants to have available. When the government finally decides to allow casino operations

it will complete the picture. The investments that are taking place are not designed to pay off big immediately but they will in another

five to ten years.

And how many of the money class from Bangkok, Singapore, Hong Kong and China did you research to check your hypothesis?

What on earth makes you think the rich from Singapore, HK and China will consider some rurual Thai non coastal town as a second residence? Are you some kind of property salesmen hoping to cash in?

[true blue]

should think cnx has a lot going for it at the moment,but its certinally traffic wise, getting dead locked at certain times,but its a nice place to live.

[hellodolly]

I don't know about investment but where oh where are all the people going to come from to fill all of the houses being built? There are huge housing developments everywhere.

Sure the Thais prefer new houses to old houses but still I do not see massive areas of older houses being demolished.

Someone is investing in this area and investing in a big way.

Not only where are they going to come from but what are they going to do if they have to work?

Short of online work there is not that much open other than low paying jobs that can not afford the new construction.

It is funny before I moved here Hua Hin was in my thoughts. A friend told me get a place there and then go to Chiang Mai for furniture. I wound up living here in furnished accommodations. But they did not have the chair I wanted for my TV viewing so I went out and looked at about three or four places before settling on one that met my qualifications.

They had to ship it up from Bangkok.

[hellodolly]

I don't know about investment but where oh where are all the people going to come from to fill all of the houses being built? There are huge housing developments everywhere.

Sure the Thais prefer new houses to old houses but still I do not see massive areas of older houses being demolished.

Someone is investing in this area and investing in a big way.

Not only where are they going to come from but what are they going to do if they have to work?

Short of online work there is not that much open other than low paying jobs that can not afford the new construction.

It is funny before I moved here Hua Hin was in my thoughts. A friend told me get a place there and then go to Chiang Mai for furniture. I wound up living here in furnished accommodations. But they did not have the chair I wanted for my TV viewing so I went out and looked at about three or four places before settling on one that met my qualifications.

They had to ship it up from Bangkok.

[hellodolly]

I don't know about investment but where oh where are all the people going to come from to fill all of the houses being built? There are huge housing developments everywhere.

Sure the Thais prefer new houses to old houses but still I do not see massive areas of older houses being demolished.

Someone is investing in this area and investing in a big way.

Not only where are they going to come from but what are they going to do if they have to work?

Short of online work there is not that much open other than low paying jobs that can not afford the new construction.

It is funny before I moved here Hua Hin was in my thoughts. A friend told me get a place there and then go to Chiang Mai for furniture. I wound up living here in furnished accommodations. But they did not have the chair I wanted for my TV viewing so I went out and looked at about three or four places before settling on one that met my qualifications.

They had to ship it up from Bangkok.

[hellodolly]

I don't know about investment but where oh where are all the people going to come from to fill all of the houses being built? There are huge housing developments everywhere.

Sure the Thais prefer new houses to old houses but still I do not see massive areas of older houses being demolished.

Someone is investing in this area and investing in a big way.

Not only where are they going to come from but what are they going to do if they have to work?

Short of online work there is not that much open other than low paying jobs that can not afford the new construction.

It is funny before I moved here Hua Hin was in my thoughts. A friend told me get a place there and then go to Chiang Mai for furniture. I wound up living here in furnished accommodations. But they did not have the chair I wanted for my TV viewing so I went out and looked at about three or four places before settling on one that met my qualifications.

They had to ship it up from Bangkok.

[scotinsiam]

I don't know about investment but where oh where are all the people going to come from to fill all of the houses being built? There are huge housing developments everywhere.

Sure the Thais prefer new houses to old houses but still I do not see massive areas of older houses being demolished.

Someone is investing in this area and investing in a big way.

Not only where are they going to come from but what are they going to do if they have to work?

Short of online work there is not that much open other than low paying jobs that can not afford the new construction.

It is funny before I moved here Hua Hin was in my thoughts. A friend told me get a place there and then go to Chiang Mai for furniture. I wound up living here in furnished accommodations. But they did not have the chair I wanted for my TV viewing so I went out and looked at about three or four places before settling on one that met my qualifications.

They had to ship it up from Bangkok.

Perhaps they can work in the various Hospitals, Universities, Colleges, Schools, manufacturing plants, Government positions, etc. etc - plenty opportunities around for educated people.

[ramrod711]

5 years ago we bought a house in a small, privately owned development, that had plans for a total of 100 houses. There were only 3 other developments within 3-5 kilometers from us, and all of them were very "upper end" developments. Other than that, nothing but a temple and hundreds of rai of rice paddies. Now there are home improvement companies, paint companies, restaurants out the ying-yang, new 7/11's, more housing developments popping up like mushrooms in a forest after a good rain, so forth and so on. Oh, and Pramada is only a 3-4 minuted drive from where we are.

We're actually getting ready to put our house up for sale and look for some land where we can build a new, and smaller one. My wife spoke to a friend who is a real estate agent and was told that when we're ready, she would be able to easily sell ours to one of the many clients from BKK who are looking for nice homes here in CM. It's still a decent location, but things are getting a bit crowded in my opinion, and besides, we don't need a house this big any more. It served it's purpose, but now time to sell and downsize a bit.

Sounds like we don't live very far apart. When we built our house near the intersection of hwy 121 and the Sangkhampang road 5 years ago that road was 2 lanes. There were no 711s, tesco minis. building supplies, dentist offices or coffee shops. Now the traffic is so heavy in the mornings that it can take 10 minutes just to get going. There have been at least 7 moo baans built around us. The only smart thing we did was to buy another piece of property, 159 tarang wah, as a hedge against inflation. Chiang Rai is starting to look pretty good.

[L&J]

And how many of the money class from Bangkok, Singapore, Hong Kong and China did you research to check your hypothesis?

What on earth makes you think the rich from Singapore, HK and China will consider some rurual Thai non coastal town as a second residence? Are you some kind of property salesmen hoping to cash in?

Baerboxer:

It is amazing how very small some minds are in this town. There have been a number of articles in the press (though i doubt you read much) about the some of the major high end condo building taking place towards
Hang Dong is financed by Singapore money for Singapore residents. You must stay under a rock most of the day if you haven't noticed the influx of the Bangkok hi-so crowd. The real estate market in Hong Kong is absurdly overpriced with the mainland money buying up everything available. The rich Chinese don't want to live in China (too primitive for billionaires) and if only one in a hundred decide on CM for a second residence consider the effect. The rich don't want beaches overrun with tourists, hookers and the Russian mafia but want what they "think" is a nice size city, with full facilities, in a rural (read natural) setting. Please let me never run into you here as I already have met my quota of simple fools.

[AnotherOneAmerican]

It is quite probable that Chiang Mai will in the next decade become a focal point for relocation/second residence for

the money class from Bangkok, Singapore, Hong Kong and China. The development that is taking place (Central Festival

and Promenada) is designed to fill the infrastructure "needs" of those people. Building a second airport and high speed rail

links are also part of what that group wants to have available. When the government finally decides to allow casino operations

it will complete the picture. The investments that are taking place are not designed to pay off big immediately but they will in another

five to ten years.

I though building in CM was all about money laundering.

You have a big suitcase of drug money. rice money, high speed train money, explosive detector money under the bed, buy a bit of land, build a condo on it then after a few years sell it if you can and collect your nice clean money.

Good luck buying a 45m2 condo for 5Mbht and ever making a profit on it, of ever managing to shift it at all.

Edited July 27, 2013 by AnotherOneAmerican

[lifeincnx]

Confucius says, "If financial magazine article tells you a horse will be a winner, the race has already been run. Pick another horse race."

[elektrified]

Good luck buying a 45m2 condo for 5Mbht and ever making a profit on it, of ever managing to shift it at all.

I certainly agree with you on that.

[SantiSuk]

It's people looking on residential property as an 'investment' rather than a place to live that got the developed world into the sorry-ar$ed state it is in today.