Will AEC affect property values in Chiangmai?

[cheeryble]

A friend suggested AEC would have a real impact on property values in CM.

Is this true?

[Pib]

Is CM expecting a big influx of AEC foreigners for some reason? AEC foreigners still can't own land; only Thais can own land. But I guess they can use that Thai nominee method that's apparently used a lot in farang-heavy locations like Phuket, Pattaya, etc., to own certain kinds of property. And of course anyone can buy a condo since no land ownership is involved.

[Naam]

read and relax!

A5. Free flow of skilled labour

33. In allowing for managed mobility or facilitated entry for the movement of natural persons
engaged in trade in goods, services, and investments, according to the prevailing regulations of the receiving country,

ASEAN is working to:

Action:

i. Facilitate the issuance of visas and employment passes for ASEAN professionals and
skilled labour who are engaged in cross-border trade and investment related activities.

[laislica]

read and relax!

A5. Free flow of skilled labour

33. In allowing for managed mobility or facilitated entry for the movement of natural persons

engaged in trade in goods, services, and investments, according to the prevailing regulations of the receiving country,

ASEAN is working to:

Action:

i. Facilitate the issuance of visas and employment passes for ASEAN professionals and

skilled labour who are engaged in cross-border trade and investment related activities.

Thanks, I ran out of likes today LOL

[Robert24]

Maybe property values may go up further given the proximity to Myanmar and Chinese interests in Chiang Mai. However bear in mind that they have gone up a lot already and property and land prices are at an all time high now. For prices to go up further, the economy needs to do well, interest rates need to remain low and you need to see continued interest from foreign investors.

[cocopops]

Is CM expecting a big influx of AEC foreigners for some reason?

See that's a tricky question there. Certainly they are expecting one, but whether or not there is much of a reason is less clear. Or if there is a reason, whether or not the expectation is reasonable in magnitude.

Seems like every man and his dog is buying a condo on the grounds it can be sold on to a foreigner after ASEAN. The last guy I heard this from was a local barber. I forget if he had actually bought the thing already or was just saying that he ought to. Either way, he was confident that it was a pretty safe bet and advised me to look for a similar investment for myself.

Edited July 1, 2014 by cocopops

[Asiantravel]

Is CM expecting a big influx of AEC foreigners for some reason?

See that's a tricky question there. Certainly they are expecting one, but whether or not there is much of a reason is less clear. Or if there is a reason, whether or not the expectation is reasonable in magnitude.

Seems like every man and his dog is buying a condo on the grounds it can be sold on to a foreigner after ASEAN. The last guy I heard this from was a local barber. I forget if he had actually bought the thing already or was just saying that he ought to. Either way, he was confident that it was a pretty safe bet and advised me to look for a similar investment for myself.

Would local barber be equivalent to the shoeshine boy in New York giving you investment tips?

[ldnguy]

I think CM will grow massively over the next few decades. So teh right property in the right area could do well. But property there already seems quite expensive. It depends on so many factors that it's almost impossible to know. I'd guess that it's might likely to grow as Chinese people invest more outside China. A rail link from China to CM will help. I don't think AEC will have much impact on prices in the short to medium term, as it's been known about for years and those rises have already taken place.

[thailiketoo]

Can a Chinese person buy Thai REITs ?

[PattayaPhom]

No

[thailiketoo]

No

Wrong. Call your broker. SET.

[PattayaPhom]

No

Wrong. Call your broker. SET.

And what is the connection between SET and Chiang Mai property prices 2015+???

[thailiketoo]

No

Wrong. Call your broker. SET.

And what is the connection between SET and Chiang Mai property prices 2015+???

Real estate trusts are for sale on the SET. Chiang Mai has real estate. Real estate has a price.

[IsaanUSA]

The rise in property values is already factored into the current high prices. Also many TV posters will say the floods have also raised prices.

[JesseFrank]

Property prices will rise further as they have done in the past, but wait...........................

I bought the land on which i built a house 5 years ago at 945.000 Baht for a rai. These days all the surrounding plots want 3 million for a rai, with exception of one guy who asks 2.5 but you need to take 3 rai as a whole.

There hasn't been a single plot sold in the past 5 years, but most probably they will ask 4 million next year.

[GiantFan]

Property prices will rise further as they have done in the past, but wait...........................

I bought the land on which i built a house 5 years ago at 945.000 Baht for a rai. These days all the surrounding plots want 3 million for a rai, with exception of one guy who asks 2.5 but you need to take 3 rai as a whole.

There hasn't been a single plot sold in the past 5 years, but most probably they will ask 4 million next year.

+1

[Berkshire]

The rise in property values is already factored into the current high prices. Also many TV posters will say the floods have also raised prices.

Yes, there are several factors, but rampant speculation and over-development is going to create a bubble like Chiang Mai ain't never seen. If folks are just getting in now, they're already late to the dance. Like with everything else, some's going to win, some's going to lose. And lose big.

[cheeryble]

Evidence for bubble to burst please Berkshire?

BTW interested if folks can come up with names for those places in the world where it seemed like a bubble but it wasn't a bubble it was growth due to demographic or economic change

I'll start:

Singapore?

As for the condo boom where close in can say a bank employee afford a piece of land and build his nest? And have I heard young folks the classic Thai family house is diminishing in appeal and they like their new independence?

Yesterday I drove past one if the newish One Plus Condos.

They are small and have rather hard mattresses and laminated floors BTW.

The fact is there were (assorted) curtains at all windows, they were genuinely occupied.

I also just happened to have an old friend visiting say "I think I'll buy something here".

I myself once bought a condo from a Thai family who'd had it for four years while their son was studying.

We're not talking paupers here.

Sent from my iPad using ThaiVisa app

Edited July 3, 2014 by cheeryble

[Naam]

Property prices will rise further as they have done in the past, but wait...........................

I bought the land on which i built a house 5 years ago at 945.000 Baht for a rai. These days all the surrounding plots want 3 million for a rai, with exception of one guy who asks 2.5 but you need to take 3 rai as a whole.

There hasn't been a single plot sold in the past 5 years, but most probably they will ask 4 million next year.

ask prices are irrelevant, only actual deals count. in the moo baan where i live the price for one wah² was THB 17,500 in 2005, recently a plot was sold for 28,500/wah².

that does not seem too inflationary when comparing Baht prices. but nine years ago one US-Dollar bought THB 42.50 vs. today's 32.25

[JesseFrank]

Property prices will rise further as they have done in the past, but wait...........................

I bought the land on which i built a house 5 years ago at 945.000 Baht for a rai. These days all the surrounding plots want 3 million for a rai, with exception of one guy who asks 2.5 but you need to take 3 rai as a whole.

There hasn't been a single plot sold in the past 5 years, but most probably they will ask 4 million next year.

ask prices are irrelevant, only actual deals count. in the moo baan where i live the price for one wah² was THB 17,500 in 2005, recently a plot was sold for 28,500/wah².

that does not seem too inflationary when comparing Baht prices. but nine years ago one US-Dollar bought THB 42.50 vs. today's 32.25

I think I made it clear with my post that only deals count, but that doesn't mean that the absence of deals holds them back from rising their asking pices.

Recently I had a interested buyer for my house, but he wanted to purchase an additional 2 rai connected to my plot, which is no problem as I have an owner with 16 rai at one side and another with 5 rai at the other side.. He offered them 2 million/rai but they persisted on 3 million and so the deal feel through.

[cocopops]

Property prices will rise further as they have done in the past, but wait...........................

I bought the land on which i built a house 5 years ago at 945.000 Baht for a rai. These days all the surrounding plots want 3 million for a rai, with exception of one guy who asks 2.5 but you need to take 3 rai as a whole.

There hasn't been a single plot sold in the past 5 years, but most probably they will ask 4 million next year.

ask prices are irrelevant, only actual deals count. in the moo baan where i live the price for one wah² was THB 17,500 in 2005, recently a plot was sold for 28,500/wah².

that does not seem too inflationary when comparing Baht prices. but nine years ago one US-Dollar bought THB 42.50 vs. today's 32.25

Even in dollars, assuming we're talking about 9 years, that's "only" 8.5% nominal per annum. A good return, but compared to plenty of places in the world, not much of a bubble at all!

Edited July 3, 2014 by cocopops

[Robert24]

A 50% increase over 9 years is not much compared to other locations. However I'm not sure how representative this is. I don't have statistics about land price development in Chiang Mai but I would say that in good locations, prices have increased more than 100% in the last 5 years and a lot more than that since 2005.

Overall prices are relatively high and yes maybe can go up more especially in the long run provided the economy is good, interest rates remain low and there is healthy demand from both domestic and foreign investors. But bear in mind that the risk for a price correction has increased as well.

[wolfmanjack]

Maybe property values may go up further given the proximity to Myanmar and Chinese interests in Chiang Mai. However bear in mind that they have gone up a lot already and property and land prices are at an all time high now. For prices to go up further, the economy needs to do well, interest rates need to remain low and you need to see continued interest from foreign investors.

You mean you have to see continued interest in Bangkok investors.

The property values have skyrocketed in my area and my mother in laws village solely due to purchases from bangkok thais.

[Robert24]

yes you are right. investments from both foreign as well as domestic investors need to continue to sustain or further increase current price levels. Both institutional investors as well as private investors have put in huge amounts into the property market. Many big Thai corporates have more exposure in property than their traditional business. Look at CPF, Singha, Thaibev etc. Also foreign investors from Singapore, Hong Kong and China have invested a lot in the Thai property market through either REITS or direct investments.

[AfterLOS]

Is CM expecting a big influx of AEC foreigners for some reason?

See that's a tricky question there. Certainly they are expecting one, but whether or not there is much of a reason is less clear. Or if there is a reason, whether or not the expectation is reasonable in magnitude.

Seems like every man and his dog is buying a condo on the grounds it can be sold on to a foreigner after ASEAN. The last guy I heard this from was a local barber. I forget if he had actually bought the thing already or was just saying that he ought to. Either way, he was confident that it was a pretty safe bet and advised me to look for a similar investment for myself.

Would local barber be equivalent to the shoeshine boy in New York giving you investment tips?

It would. SELL, sell, sell - notwithstanding why you buy-ed in the first place when the formula for LOS is Rent, rent, rent

[AfterLOS]

A 50% increase over 9 years is not much compared to other locations. However I'm not sure how representative this is. I don't have statistics about land price development in Chiang Mai but I would say that in good locations, prices have increased more than 100% in the last 5 years and a lot more than that since 2005.

Overall prices are relatively high and yes maybe can go up more especially in the long run provided the economy is good, interest rates remain low and there is healthy demand from both domestic and foreign investors. But bear in mind that the risk for a price correction has increased as well.

More steam out the tailpipe

SELL SELL SELL

[Robert24]

@afterLOS: now we know you are a Harry Dent follower with your prediction to buy property in 2018. Unfortunately Harry Dent has been wrong about most his predictions over the last 10 years, so good luck to you. I hope you are not betting too much money on his predictions, his track record isn't very good. And also be careful with your short SET50 future position.

[JesseFrank]

Property prices will rise further as they have done in the past, but wait...........................

I bought the land on which i built a house 5 years ago at 945.000 Baht for a rai. These days all the surrounding plots want 3 million for a rai, with exception of one guy who asks 2.5 but you need to take 3 rai as a whole.

There hasn't been a single plot sold in the past 5 years, but most probably they will ask 4 million next year.

Believe it or not but just minutes ago, the guy who is the local messenger and who offered me the land adjacent my property for 3 million/rai about 2 months ago, rang the doorbell and informed me that they now want 4 million/rai.

Not that a single plot has been sold in the past 5 years

[JesseFrank]

The biggest problem is that this country is one big lying society who wind each other up.

When I asked the guy what land had been sold in the past 5 years around here, he pointed to the land where currently a monastery is build and said that one was sold at 2 million/rai.

The NGO that is building the monastery has a website which shows that the land was 5 years ago purchased at 3.5 million for 4.2 Rai.

[AfterLOS]

@afterLOS: now we know you are a Harry Dent follower with your prediction to buy property in 2018. Unfortunately Harry Dent has been wrong about most his predictions over the last 10 years, so good luck to you. I hope you are not betting too much money on his predictions, his track record isn't very good. And also be careful with your short SET50 future position.

Incorrect, Robert. Harry's specialty is Demographics, mine is TA. I follow nobody. All work here is my own. Good advice on the Set50 futures, thanks.