Why are rents lower in Thailand than other nearby countries

[Alwyn]

The reason rents are lower in Thailand than in nearby countries is because the rent in nearby countries is higher than Thailand.

My god I think you've nailed it there, Alwyn...!

Who'd've thought...?

Ha Ha!! Yes, it's my accountancy background.... One person did ask me if I was being serious and when I read some of the comments/posts I understood the need to qualify it with me!

Edited October 17, 2014 by Alwyn

[KhnomKhnom]

I am surprised at low housing rental costs because they are not in line with the cost of the housing.

The USA housing market has a fairly well established rule of thumb that pegs rents to the market value of the property, with more expensive property renting higher.

That ratio, if it exists, does not exist in Thailand except that, for example, one can rent a decent house for much less than the market value of it would seem to indicate.

I hear native Thai do not want to own a second hand house which may push such for-sale house into cheap rentals when they do not get a sale.

BTW, I see unsold lots, loooong time unsold lots, being carried on a bank's books AS AN ASSET... cute accounting.

[Strangebrew]

supply and demand plus a lot of expats leaving increase supply and you know Thai's some baht better than no baht

[bangon04]

supply and demand plus a lot of expats leaving increase supply and you know Thai's some baht better than no baht

Surely that contradicts the "accepted wisdom" here on TV that if demand drops in Thailand, Thais always put up their prices to compensate....

[ginglee]

Been mentioned a few times ...to many properties being built in say Pattaya, many being bought as yielding investments- result- lower rents. It also means it's near impossible to get capital appreciation. Why would anyone buy here??

[trogers]

I am surprised at low housing rental costs because they are not in line with the cost of the housing.

The USA housing market has a fairly well established rule of thumb that pegs rents to the market value of the property, with more expensive property renting higher.

That ratio, if it exists, does not exist in Thailand except that, for example, one can rent a decent house for much less than the market value of it would seem to indicate.

I hear native Thai do not want to own a second hand house which may push such for-sale house into cheap rentals when they do not get a sale.

BTW, I see unsold lots, loooong time unsold lots, being carried on a bank's books AS AN ASSET... cute accounting.

The reason the rent to market value here has low correlation is the lack of property tax that would make it painful to leave a property vacant.

So they over build and waste the country's resources on unproductive ventures.

[freebyrd]

Cambodia has plenty of supply now.

...still prices remain stubbornly high.

Someone has to explain to Khmer landlords this supply-demand thing.

In PP it depends where you live and what you want. Most serviced apartments are like chicken coops here, I wouldn't live in one if it was reant free, not the preferred choice. Independent rentals can be quite reasonable, same with Siem Reap.

I'm in a 2 bedroom apartment here in PP, wrap around balcony, everything on my doorstep, been here 2 years, B7,500 a month. Moving soon to a 2 bedroom house, big sitting room, 3 bathrooms, reasonable sized parking area, very quiet, B12,000. I'm quite sure something similar would cost me much more in BKK. I could have got a 3 floor rental for the same price.

Thailand cheaper than Cambodia? Yes I had a studio in BKK for B4,500, stayed there '94 - '01, it was a rabbit hutch though. I doubt that BKK is cheaper than PP.

That said, one man's meat....

[harrry]

I am surprised at low housing rental costs because they are not in line with the cost of the housing.

The USA housing market has a fairly well established rule of thumb that pegs rents to the market value of the property, with more expensive property renting higher.

That ratio, if it exists, does not exist in Thailand except that, for example, one can rent a decent house for much less than the market value of it would seem to indicate.

I hear native Thai do not want to own a second hand house which may push such for-sale house into cheap rentals when they do not get a sale.

BTW, I see unsold lots, loooong time unsold lots, being carried on a bank's books AS AN ASSET... cute accounting.

The reason the rent to market value here has low correlation is the lack of property tax that would make it painful to leave a property vacant.

So they over build and waste the country's resources on unproductive ventures.

This will start to change with the introduction of some property tax here this year. It is only a token start but have you ever known a tax to decrease.

[Greg Nixon]

If you are married to a Thai person, they can buy a family property - 2 bedroom for about 4000 Baht/month. These are comfortable homes but they do not have big empty spaces something that most people do not really need. Want yes. Need no. You can upgrade with a kitchen for about 180,000 baht or increase the size by 30% and add a kitchen for a little more.

What do you really need - a pool, a huge deck, an ocean view, a seaside location ? These are not needs, they are wants. My Thai wife and her mother tried to get me to buy a 3,000,000 baht property when I came. She already owned two houses side by side. She had property in Nong Sung and Sak Khonakon as well. I said to her, " You do not need more you need less " Thai people are very property conscious and are loath to give anything up. I modernised her two houses and consolidated them into one very attractive property. Two toilets, four bedrooms, 3 showers, a sitting room ( TV) and an office. We added a kitchen. In the future we will enlarge the liveable space by adding a porch and an upstairs storage. Our next big necessity is a new roof.

Thailand is tomorrow country. If you could go back to the '50's in North America and buy again knowing the future would you? The prices here are 50's prices. If you are in North America it is always tomorrow here. This is tomorrow land. When the world discovers Thailand prices will pop but it will not necessarily be the big luxury properties that will see the biggest % % % increases. My belief is the bargains are elsewhere; like a $20,000.00 home or two $20,000.00 homes. Raw land in development range of a big city. A small farm.

[manarak]

Because everyone builds condos or houses to hold for the land value and up till now there was no land tax. This means that there is a glut of accomodation.

this land tax is a very bad idea

[harrry]

Because everyone builds condos or houses to hold for the land value and up till now there was no land tax. This means that there is a glut of accomodation.

this land tax is a very bad idea

Why. It may encourage people to actually use land instead of tying it up.

Of course if you have property youwill not think it is a good idea.

[manarak]

Because everyone builds condos or houses to hold for the land value and up till now there was no land tax. This means that there is a glut of accomodation.

this land tax is a very bad idea

Why. It may encourage people to actually use land instead of tying it up.

Of course if you have property youwill not think it is a good idea.

There is so much land available in Thailand for cheap, land availability is not a problem in Thailand that needs to be solved by a land tax.

All it will do is further impoverish poor people who will be forced to sell because they can't pay the tax, and it will push costs up for everything, not just rents, but also production costs for food, rubber...

[MyFriend You]

I live in a nice clean condo in Chiang Mai close to everything 40 square metres. We have a nice pool good neighbors good security. I only pay 4,000 bahts a month plus utilities at market rate not inflated rates.

May I inquire the area you live in - close to night life?? - do they entertain short term leases ?? - I'd fancy a few months in Chiang Mai to see if I'd like to live there.........I spent six months there in the US Army but that was a looong time ago.............PM me if you like to elaborate. I am single, a little beyond ,middle age and enjoy life.

[MyFriend You]

I Thai friend of mine for over 35 years recently offered to sell me a Condo for 900,000 baht on Soi 77 Sukumvit - was advertised as 2 room (in thai) with kitchen - 52 mt sq - I went to visit and found something akin to a hotel room with a glassed in balcony with a small hammock bedroom and a kitchen (on the balcony) - a bed, chest of drawers and a TV in main room. She was disappointed when I laughed at the place, all she could say it was 'worth ary baht ary baht' because of location, location - Old Ekamai area............she no longer answers my email and de friended me on Facebook

[trogers]

I Thai friend of mine for over 35 years recently offered to sell me a Condo for 900,000 baht on Soi 77 Sukumvit - was advertised as 2 room (in thai) with kitchen - 52 mt sq - I went to visit and found something akin to a hotel room with a glassed in balcony with a small hammock bedroom and a kitchen (on the balcony) - a bed, chest of drawers and a TV in main room. She was disappointed when I laughed at the place, all she could say it was 'worth ary baht ary baht' because of location, location - Old Ekamai area............she no longer answers my email and de friended me on Facebook

When has Onnut became Ekamai? Has Prakhanong disappeared?

Her unit is just a glorified studio, and not even a 1-bedroom unit.

[trogers]

Because everyone builds condos or houses to hold for the land value and up till now there was no land tax. This means that there is a glut of accomodation.

this land tax is a very bad idea

Why. It may encourage people to actually use land instead of tying it up.

Of course if you have property youwill not think it is a good idea.

There is so much land available in Thailand for cheap, land availability is not a problem in Thailand that needs to be solved by a land tax.

All it will do is further impoverish poor people who will be forced to sell because they can't pay the tax, and it will push costs up for everything, not just rents, but also production costs for food, rubber...

Heard of progressive tax?

[manarak]

Heard of progressive tax?

Never heard of progressive land tax for farmers, food and wood producers, rubber farms...