New Houses Not Selling?

[swissie]

Well there must be people with money in Issan as a development in Korat called Land & Home has 500 plus houses 5M-10M and they are all sold.

Paid 1.8M for my house 6 years ago in a development called Home Gardenville and now they same house is going for almost 3M. The land prices have sky rocketed 100%. And still 99% of the homes being built in this area are already sold. Go figure.

Once upon a time there was a country, that granted mortgages to people with no money. They re-packaged those mortgages and called them "solid mortgage backed investments" and sold them to the worldwide community of investors.

But lo and behold, Real-estate prices hit a certain ceiling. A few people, equipped with a pocket calculator started to realize that those mortgages will never be repaid. This was the trigger that resulted in "the financial crisis" of witch we haven't fully recovered yet.

By reading Rdrokit's text above: Isn't all this only too familiar? Monthly rents stay low while properties explode in value. The consensus: The profit will come from the steadily rising value of the property, nevermind the rental-income of the property. (The yield in the classic sense.)

To me: If those are not the classic symptoms of a "real-estate bubble", then I don't know what is. Only difference, this time "made in Thailand".

Cheers.

PS: Can't think of the name of this "once upon a time" country. I vaguely remember that this weird Spanish sailor that discovered this patch of land called it's inhabitants "Indians".

[JLCrab]

Weird 'Italian' sailor.

[swissie]

Weird 'Italian' sailor.

I know he was from Italy. Could not get any funding in Italy for his voyage. Queen Isabella of Spain finally paid for his trip. The rest is history.

Come to think of it: The first sailor that actually brought back a usable map of the east-coast of North America was John Cabot. He immigrated to the UK before, but was born and raised under the name of Giovanni Caboto in Italy.

And who discovered Thailand? Some us-army personnel during the war on R&R and later the tourists.

Cheers.

[Noi657]

House is only worth what people are willing to pay regardless of cost.

[hotrod4098]

whats the tax when you sell a house..had a friend who paid 2.5 million in pattaya...kept it 8 years...was hit with a big tax bill...

so people saying my house price has gone up....may not be correct..the tax could wipe out ant profit

[chiang mai]

whats the tax when you sell a house..had a friend who paid 2.5 million in pattaya...kept it 8 years...was hit with a big tax bill...

so people saying my house price has gone up....may not be correct..the tax could wipe out ant profit

There's about three different taxes involved, they total no more than 3% and they're frequently shared between the buyer and seller. The larger of the three taxes reduces on a sliding scale based on length of ownership, is your friend telling porkies to impress perhaps?

[JLCrab]

Weird 'Italian' sailor.

I know he was from Italy. Could not get any funding in Italy for his voyage. Queen Isabella of Spain finally paid for his trip. The rest is history.

Come to think of it: The first sailor that actually brought back a usable map of the east-coast of North America was John Cabot. He immigrated to the UK before, but was born and raised under the name of Giovanni Caboto in Italy.

And who discovered Thailand? Some us-army personnel during the war on R&R and later the tourists.

Cheers.

Thanks Swissie but we Yanks get our history first-hand -- "Let's give our cheer to Isabelly,"

[chiang mai]

Weird 'Italian' sailor.

I know he was from Italy. Could not get any funding in Italy for his voyage. Queen Isabella of Spain finally paid for his trip. The rest is history.

Come to think of it: The first sailor that actually brought back a usable map of the east-coast of North America was John Cabot. He immigrated to the UK before, but was born and raised under the name of Giovanni Caboto in Italy.

And who discovered Thailand? Some us-army personnel during the war on R&R and later the tourists.

Cheers.

Thanks Swissie but we Yanks get our history first-hand -- "Let's give our cheer to Isabelly,"

Your text books are out of date:

http://www.history.com/news/the-viking-explorer-who-beat-columbus-to-america

[JLCrab]

So Leif Erikson discovered what, Canada eh?

[chiang mai]

So Leif Erikson discovered what, Canada eh?

Well no, at that time there was no such thing as America or Canada, just the North American continent, the countries would be formed later. So it's fair to say that Leif and the lads discovered America.

[JLCrab]

Amerigo Vespucci was an Italian and wasn't discovered until much later.

[patongphil]

whats the tax when you sell a house..had a friend who paid 2.5 million in pattaya...kept it 8 years...was hit with a big tax bill...

so people saying my house price has gone up....may not be correct..the tax could wipe out ant profit

There's about three different taxes involved, they total no more than 3% and they're frequently shared between the buyer and seller. The larger of the three taxes reduces on a sliding scale based on length of ownership, is your friend telling porkies to impress perhaps?

If you own property less than 5 years total taxes are around 5 to 6 percent of "declared value" and then about 3 percent after. 5 years is the magical number.

[Issangeorge]

I'm always amazed at how many people won't buy property in Thailand because they can't own it. I wonder how many of these people lost their house or at least half of it to their ex wives in their home country, where they could own property. Oh by the way there are lots of ways to protect your investment in Thailand.

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[Naam]

These prices quoted on this thread for new homes in Issan are double what you would pay in the US. In the US you get a large lot, real roads and civil amenities. Plus in the US the average family income is at least double that of Thailand. So I simply don't believe any of the bullshit I read here. Thai families in Issan don't buy out 500 unit subdivisions of 10 m baht houses. Somebody is playing games. Remember the speculation of 1997, and all the unfinished buildings and subdivisions left behind. They are still visible all over Thailand. I fear that after reading this blog, we a drawing closer to that happening again. Be careful what you buy.

But wouldn't you have to live in the US for those new homes ?

and pay income tax?

year for year till you die?

and after you died your heirs pay inheritance tax?

[NeverSure]

These prices quoted on this thread for new homes in Issan are double what you would pay in the US. In the US you get a large lot, real roads and civil amenities. Plus in the US the average family income is at least double that of Thailand. So I simply don't believe any of the bullshit I read here. Thai families in Issan don't buy out 500 unit subdivisions of 10 m baht houses. Somebody is playing games. Remember the speculation of 1997, and all the unfinished buildings and subdivisions left behind. They are still visible all over Thailand. I fear that after reading this blog, we a drawing closer to that happening again. Be careful what you buy.

But wouldn't you have to live in the US for those new homes ?

and pay income tax?

year for year till you die?

and after you died your heirs pay inheritance tax?

C'mon Naam. You're smarter than that. Income taxes for an American don't depend on where you live.

Inheritance tax doesn't kick in until after $5 million, which doesn't affect most people.

And no matter how you slice it, you can't own real estate in Thailand.

[tullynagardy]

Anyone with any exposure and experience to the property bubbles that came and went over the last decade in Spain and Ireland can see Thailand, and Issan in particular, is heading for a big fall.

Aside from the uncertain political situation ( which means the farm subsidies and infrastructure spending issan benefits from is likely to soon stop) it is easy to see much of the new found wealth is based around a binge of cheap credit with nothing substansial underneath to support it. Once this bubbles bursts and the construction and wealth ripple that goes it, these 10M type houses will be worth probably a third of their current value.

Only a fool would want to buy such a property now. (not that we as farrangs can buy one anyway so better to rent on so many levels.)

Heres a good article - http://www.forbes.com/sites/jessecolombo/2013/11/04/thailands-bubble-economy-is-heading-for-a-1997-style-crash/

[chiang mai]

Property in Thailand has a long and solid history of never falling in price, if owners can't get the price they feel is right they will sit on it until they do, good luck in waiting for the market to crash, it's never going to happen.

[barrybankruad]

Property in Thailand has a long and solid history of never falling in price, if owners can't get the price they feel is right they will sit on it until they do, good luck in waiting for the market to crash, it's never going to happen.

What you are saying is generally true, however if you are patient property will often come onto the market where the owner has got himself deeply into debt and is desperate to sell. They will no doubt initially ask a ridiculous price but if you're prepared to wait the price will come down to a sensible level. In my area there has been a lot of building going on, particularly of the shop type with the roller door and the flat upstairs. Rows and rows of them have been built, most of them remain empty. No doubt in many cases money was borrowed to erect these structures, when the banks start calling in these loans then the bubble will burst and bargains could well be had.

[chiang mai]

Property in Thailand has a long and solid history of never falling in price, if owners can't get the price they feel is right they will sit on it until they do, good luck in waiting for the market to crash, it's never going to happen.

What you are saying is generally true, however if you are patient property will often come onto the market where the owner has got himself deeply into debt and is desperate to sell. They will no doubt initially ask a ridiculous price but if you're prepared to wait the price will come down to a sensible level. In my area there has been a lot of building going on, particularly of the shop type with the roller door and the flat upstairs. Rows and rows of them have been built, most of them remain empty. No doubt in many cases money was borrowed to erect these structures, when the banks start calling in these loans then the bubble will burst and bargains could well be had.

Really doubtful, even the banks when they repossess property want the full whack else it stays on the books unsold.

[DILLIGAD]

Really doubtful, even the banks when they repossess property want the full whack else it stays on the books unsold.

Do you know this "first hand" about repo"s on banks books????

I ask to save time and effort going down this route.

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[CraigSchuler]

Property in Thailand has a long and solid history of never falling in price, if owners can't get the price they feel is right they will sit on it until they do, good luck in waiting for the market to crash, it's never going to happen.

What you are saying is generally true, however if you are patient property will often come onto the market where the owner has got himself deeply into debt and is desperate to sell. They will no doubt initially ask a ridiculous price but if you're prepared to wait the price will come down to a sensible level. In my area there has been a lot of building going on, particularly of the shop type with the roller door and the flat upstairs. Rows and rows of them have been built, most of them remain empty. No doubt in many cases money was borrowed to erect these structures, when the banks start calling in these loans then the bubble will burst and bargains could well be had.

Really doubtful, even the banks when they repossess property want the full whack else it stays on the books unsold.

As the inventory reaches a certain level and the banks have more real estate then money....It will be time to liquidate.

[chiang mai]

Property in Thailand has a long and solid history of never falling in price, if owners can't get the price they feel is right they will sit on it until they do, good luck in waiting for the market to crash, it's never going to happen.

What you are saying is generally true, however if you are patient property will often come onto the market where the owner has got himself deeply into debt and is desperate to sell. They will no doubt initially ask a ridiculous price but if you're prepared to wait the price will come down to a sensible level. In my area there has been a lot of building going on, particularly of the shop type with the roller door and the flat upstairs. Rows and rows of them have been built, most of them remain empty. No doubt in many cases money was borrowed to erect these structures, when the banks start calling in these loans then the bubble will burst and bargains could well be had.

Really doubtful, even the banks when they repossess property want the full whack else it stays on the books unsold.

As the inventory reaches a certain level and the banks have more real estate then money....It will be time to liquidate.

It'll be a long wait then, non-performing loans are well under 3% across the board and bank profits (just released) are up 30%!

[tullynagardy]

Property in Thailand has a long and solid history of never falling in price, if owners can't get the price they feel is right they will sit on it until they do, good luck in waiting for the market to crash, it's never going to happen.

How much you want to bet? Name your price?

Come back to this thread in 2015

[FiftyTwo]

Property in Thailand has a long and solid history of never falling in price, if owners can't get the price they feel is right they will sit on it until they do, good luck in waiting for the market to crash, it's never going to happen.

What you are saying is generally true, however if you are patient property will often come onto the market where the owner has got himself deeply into debt and is desperate to sell. They will no doubt initially ask a ridiculous price but if you're prepared to wait the price will come down to a sensible level. In my area there has been a lot of building going on, particularly of the shop type with the roller door and the flat upstairs. Rows and rows of them have been built, most of them remain empty. No doubt in many cases money was borrowed to erect these structures, when the banks start calling in these loans then the bubble will burst and bargains could well be had.

Really doubtful, even the banks when they repossess property want the full whack else it stays on the books unsold.

As the inventory reaches a certain level and the banks have more real estate then money....It will be time to liquidate.

Banks are prohibited, by law, from selling below the outstanding loan.

Bargains are sold off to friends and staff members.

The chances of a foreigner getting anything cheap are zero.

[steve187]

Anyone paying over 2 million for a house here is nuts and will regret it.

Most of these projects are a con and the resale value about halfwhat you pay for it but probably a lot less as there will be no takers.

Buy some land, get a good builder and build your own. I have a beautiful large teak house with plenty of land all for 650k.

Would cost me over 1/2 million pounds back in the UK

some photo's of your house would be nice