Real estate values climbing in Khon Kaen

[Smithwick]

Does anyone notice that the price of land an real estate is going up in Khon Kaen? What is the reason? Is it because of Khon Kaen University being the top education/intellectual center of Issan? Is it because of more commerce?

[pianoman]

If you have not noticed, there has been a real Building Boom going on thoughout Isaan... This is mainly due to the low interest rate and relaxed borrowing requirements by Thai Banks... One Thai man we know built a "Resort" that was only marginally succesful, and when he approached his bank regarding borrowing to expand the bank told him that "Resorts" were loosing money all over Thailand and that his bank would no longer loan money for any "Resort Projects"... His local banker told him to change the name to "Hotel" rather than "Resort" and then he could loan him whatever he wanted to borrow... Perfect example of "Thai" Banking mentality...

Here in Kalasin there are rows of "Shophoues", "Apartment Buildings", smaller "Business Hotels" and "Housing Developements" going up like crazy... Most are just sitting Vacant with "For Sale" or "For Rent" signs on them, some sitting right next to Older units that have sat Vacant for several years, and from talking to other's this is happening all around Thailand... One can only wonder what will happen in 2 or 3 years when all those Loans are Non-Productive and in Default...

Anyway, back to the Topic of "Prices"... Anyone who has spent much time in Thailand knows that the Thai's are great Fan's of "When something does not sell, Raise the Price.." Unlike the West where the value of property is what someone is willing to Pay, in Thailand the value is what you are Asking...

Pianoman

Pianoman

[KhunBENQ]

Crazy building boom in Khon Kaen going on for years.

I don't know the reasons.

I guess its a mixture of different factors.

Some locally (growing wealth), some imported (Bangkokians buying another residence, Chinese buying/renting to do trade/import, more and more farangs moving in).

And when construction of the highspeed railway will start, the boom will become even crazier.

Tommorow I have to drive to KK (immigration and shopping) and cross my fingers that traffic jams will not be too heavy.

I don't enjoy it anymore. Feels like (ex) "home".

Edited December 23, 2014 by KhunBENQ

[Smithwick]

Some properties in Khon Kaen are succumbing to market forces such as there are many bidders trying to outbid each other to buy a certain property. This was not the case 3 years ago.

[thrilled]

I believe there's A bubble.But who knows when the bubble will burst.I'm seeing high land prices all over

Isaan.I believe it's gotten A lot worse since the major flooding At Bangkok A few years ago.

[shirtless]

Thais love to talk up prices be wary as the world is in a very fluid state at present.

[ezzra]

Apparently the new rapid Chinese train will pass trough KK on it's way to Nong Khai

and that will jack up land prices at some areas of KK...

[BernieOnTour]

Apparently the new rapid Chinese train will pass trough KK on it's way to Nong Khai

and that will jack up land prices at some areas of KK...

Do you know any web link, where you can look up the future route of the high speed train?

[SlyAnimal]

I wonder if the land needed for the train will be negotiated for, or simply taken and paid a "fair" price for. As I bet there are people thinking about buying up large with the intention of holding the new railway to ransom (Or of selling to the support businesses which will spring up around any stations that it stops at).

As this could definitely be a contributor to the rising prices. Although in general, there's a lot of inflation in land prices all across Isaan, as the area has seen massive growth over the past few years.

[Tassie Norm]

Ezzra - I believe you are correct. Land prices have also increased very rapidly up here in Nong Khai. Much construction underway, a new supermarket complex opened last week. I have also noted that a number of 'unit' style buildings are going up. Perhaps conjecture but I believe there is a nexus with the proposed rail line through to China.

Fact. For a lovely aunt I put together a land sale promotion document - photo, description, negotiable asking price et al. I posted this info in a couple of farang bars - target of course farangs. Asking price 600,000B per rai (based on recent - but few - local sales), 40 metre sealed road frontage, some 12 km from Nong Khai proper but rural - read paddy. I was present at the following. A young Thai bloke, in uniform (but could have been a bus driver except he was driving a latish model sedan), rocks up, agrees to the 600,000 I had suggested to Aunt Jom. No bargaining, deposit of 10 grand paid. Following the Lands Department coming out on the following Saturday - once again I was witness to this - the survey was done separating Jom' land from my wife's family. Balance to be paid upon presentation of appropriate documentation.

Three weeks go by. My girl advises me a Thai had paid (or committed to buy) one rai , just up the same road but other side - 800,000B. Clearly the first bloke thought it was too good a bargain to turn up. Can't really go wrong with real estate.

PS The appearance of the Lands Dept. 'lady', and 2 co-workers, to do the brief week-end survey, cost Aunt Jom 50,000 Baht! Some folk may recall that the Lands mob were recently exposed as the highest corruption 'earners' in Thailand. Food for thought for those in a similar situation unless you are connected or patient - or loaded with cash.

[boatguy]

My wife believes it has a lot to do with all of the flooding that has occurred in surrounding areas over the past few years. Lots of folks are migrating to KK which appears to be less affected by the flooding problems. And a lot of these folks would be looking for shops?

[Tassie Norm]

Boatguy, yep. Overlooked the flooding aspect. Which reminds me of anecdotal stuff I have heard about Bangkok money arriving. This would make sense. Huge development costs for the railroad, people 'in the know' would obviously take advantage of this knowledge. AKA insider trading perhaps?

[Issangeorge]

Khon Kaen, is going to become the crossroads of the North South double track railroad and East West double track railroad. I could see Khon Kaen becoming the second largest city in Thailand. In ten years people will be wishing they bought land today.

Edited December 24, 2014 by Issangeorge

[Anthony5]

Khon Kaen, is going to become the crossroads of the North South double track railroad and East West double track railroad. I could see Khon Kaen becoming the second largest city in Thailand. In ten years people will be wishing they bought land today.

Khon Kaen has always been the second largest city in Thailand

[Issangeorge]

I didn't know that, no wonder I find it so busy, and too much like a city. Now it will become even bigger, look at what happened to Chicago, when it became a rail hub.

[Robert24]

Just a word of caution, because I think the increase in land prices are unsustainable in Khon Kaen and other areas of Issan. If you pay similar prices for a condo in Khon Kaen as in Bangkok, then you know something is not right. Whilst Khon Kaen will be sort of the center of the North East, it still doesn't have any meaningful industry, it won't have huge amount of tourism etc. Whereas Bangkok is the capital and will always be the center of business in Thailand and maybe Chonburi will always have big industries and factories, Phuket, Chiang Mai will always have a lot tourism.

So in my opinion prices are likely to correct at some point, so if you do have time, I would wait with buying land or property in Khon Kaen at the moment.

[Anthony5]

I wonder if the land needed for the train will be negotiated for, or simply taken and paid a "fair" price for. As I bet there are people thinking about buying up large with the intention of holding the new railway to ransom (Or of selling to the support businesses which will spring up around any stations that it stops at).

As this could definitely be a contributor to the rising prices. Although in general, there's a lot of inflation in land prices all across Isaan, as the area has seen massive growth over the past few years.

Land for government projects is never negotiated about.

[rotary]

Asking price is one thing, if it ever sells at that price, or any price is another matter. As one poster said "When it does not sell Thai's raise the price".

Khon Kaen traffic is terrible and most drivers there compete for the worse driver of the year awards.

I first went to Khon Kaen in 1988 and now what I see resembles nothing that is there now.

[Anthony5]

Ezzra - I believe you are correct. Land prices have also increased very rapidly up here in Nong Khai. Much construction underway, a new supermarket complex opened last week. I have also noted that a number of 'unit' style buildings are going up. Perhaps conjecture but I believe there is a nexus with the proposed rail line through to China.

Fact. For a lovely aunt I put together a land sale promotion document - photo, description, negotiable asking price et al. I posted this info in a couple of farang bars - target of course farangs. Asking price 600,000B per rai (based on recent - but few - local sales), 40 metre sealed road frontage, some 12 km from Nong Khai proper but rural - read paddy. I was present at the following. A young Thai bloke, in uniform (but could have been a bus driver except he was driving a latish model sedan), rocks up, agrees to the 600,000 I had suggested to Aunt Jom. No bargaining, deposit of 10 grand paid. Following the Lands Department coming out on the following Saturday - once again I was witness to this - the survey was done separating Jom' land from my wife's family. Balance to be paid upon presentation of appropriate documentation.

Three weeks go by. My girl advises me a Thai had paid (or committed to buy) one rai , just up the same road but other side - 800,000B. Clearly the first bloke thought it was too good a bargain to turn up. Can't really go wrong with real estate.

PS The appearance of the Lands Dept. 'lady', and 2 co-workers, to do the brief week-end survey, cost Aunt Jom 50,000 Baht! Some folk may recall that the Lands mob were recently exposed as the highest corruption 'earners' in Thailand. Food for thought for those in a similar situation unless you are connected or patient - or loaded with cash.

So do I understand it correct that the Thai guy never paid the money for such a bargain?

Land is rising rapidly everywhere. In my area, about 15 km from Pattaya, land prices have quadrupled in 7 years time. Over last year the simply added 1 million baht to a rai.

Problem is that in the past 5 years nothing meaningful has been sold. As another poster said already, Thais love to brag about the price they sold there land, and the others believe and in response list their land a little higher.

Do you also smell a bubble?

[Thai at Heart]

Have a house for sale in the city centre if anyone is interested. The boom is all fluff. Many people desperately trying to flick those condos before the balloon wallops them.

[Tassie Norm]

Khon Kaen, is going to become the crossroads of the North South double track railroad and East West double track railroad. I could see Khon Kaen becoming the second largest city in Thailand. In ten years people will be wishing they bought land today.

Khon Kaen has always been the second largest city in Thailand

No, my understanding is Chiang Mai

[Thai at Heart]

Ezzra - I believe you are correct. Land prices have also increased very rapidly up here in Nong Khai. Much construction underway, a new supermarket complex opened last week. I have also noted that a number of 'unit' style buildings are going up. Perhaps conjecture but I believe there is a nexus with the proposed rail line through to China.

Fact. For a lovely aunt I put together a land sale promotion document - photo, description, negotiable asking price et al. I posted this info in a couple of farang bars - target of course farangs. Asking price 600,000B per rai (based on recent - but few - local sales), 40 metre sealed road frontage, some 12 km from Nong Khai proper but rural - read paddy. I was present at the following. A young Thai bloke, in uniform (but could have been a bus driver except he was driving a latish model sedan), rocks up, agrees to the 600,000 I had suggested to Aunt Jom. No bargaining, deposit of 10 grand paid. Following the Lands Department coming out on the following Saturday - once again I was witness to this - the survey was done separating Jom' land from my wife's family. Balance to be paid upon presentation of appropriate documentation.

Three weeks go by. My girl advises me a Thai had paid (or committed to buy) one rai , just up the same road but other side - 800,000B. Clearly the first bloke thought it was too good a bargain to turn up. Can't really go wrong with real estate.

PS The appearance of the Lands Dept. 'lady', and 2 co-workers, to do the brief week-end survey, cost Aunt Jom 50,000 Baht! Some folk may recall that the Lands mob were recently exposed as the highest corruption 'earners' in Thailand. Food for thought for those in a similar situation unless you are connected or patient - or loaded with cash.

So do I understand it correct that the Thai guy never paid the money for such a bargain?

Land is rising rapidly everywhere. In my area, about 15 km from Pattaya, land prices have quadrupled in 7 years time. Over last year the simply added 1 million baht to a rai.

Problem is that in the past 5 years nothing meaningful has been sold. As another poster said already, Thais love to brag about the price they sold there land, and the others believe and in response list their land a little higher.

Do you also smell a bubble?

The issue for Khon Kaen is the train line which is now back on, having been on, then off due to the coup and now back on.

I attended the launch of the sansiri development in KKC. It was nuts. People signing up for the first down payments with credit cards. Thing is they flicked them the next day for a clip and have been flicked many times.

[shaurene]

I have spoken to a number of influential people and they all tend to say the same thing. Lots of people moving from Bangkok area (Thais) and setting up business. They have a new Pratunam market and the old one has been upgraded a lot, nice to go around there.

I have lived there for 5yrs now and have noticed the vast building going on, also lots places partly built and abandoned.

[Tassie Norm]

Hello 'Thai at Heart', seasons greetings to you and yours..

Yes, the Aunt's settlement was made if that is the one you are referring to.. Incidentally, It's probably inappropriate, with a tag name like your's to throw a net over the entire Thai population unless, of course, you feel you are in that net................. My wife and family certainly do not feel, nor act as, 'netted'.

[jigagee]

Hundreds plus of finished un-sold properties up here , many finished 2 / 3 years ago , some sites stopped building , half finished properties on estates ,

workers all disappeared (assume laid off) , a bubble about to burst, despite claims to the contrary .... imo

[jigagee]

Asking price is one thing, if it ever sells at that price, or any price is another matter. As one poster said "When it does not sell Thai's raise the price".

Khon Kaen traffic is terrible and most drivers there compete for the worse driver of the year awards.

I first went to Khon Kaen in 1988 and now what I see resembles nothing that is there now.

Yes dog eat dog driving standards here . Thai's raise the price , yea just what they said about the Spanish , look where it got them ...

PS Wanna buy a house in Spain (mine) mmmmm thought not ....

[Smithwick]

Asking price is irrelevant. Bid price is everything.

[ozyjon]

Some years ago clearing started around the village that consisted of about 20 houses, i was saddened to see so many trees flattened only to reveal some acres of dirt, some time later more clearing, we were now going to have some neighbors but not a forest, so i asked my darling, ''what's goin on mate ?'' with a glint in her eye, she replies,, (oh this is going to cost me money - me thinks) you know darrrling Bangkok have problem,, soon will be under water, now many people leave Bangkok, cannot swim ? many people buy land, we must buy land now then sell, i could feel the blood vessels starting to pop,, and the badgering started, one of the many reasons i left

[Thai at Heart]

Hello 'Thai at Heart', seasons greetings to you and yours..

Yes, the Aunt's settlement was made if that is the one you are referring to.. Incidentally, It's probably inappropriate, with a tag name like your's to throw a net over the entire Thai population unless, of course, you feel you are in that net................. My wife and family certainly do not feel, nor act as, 'netted'.

I was answering to the question about a bubble and Khon Kaen in particular, not your personal situation.

Khon Kaen has been up and down for 5 years now, mainly to do with the trains and Thaksin political future.

[SlyAnimal]

Isaan land prices are definitely over inflated at the moment in comparison to their true value. Hell, bare land in Thailand is a similar price, or sometimes more expensive, than what the equivalent bare land would be in NZ (And I'm pretty sure the return per m2 is significantly lower in Thailand!!).

However, whether this will "pop" or not will depend on how people purchased the land and their loan to value ratio.

Also there is a different attitude here, with people often happy to settle for a lower percentage return on investment. Many people are even happy to just land bank their money, and wait for a long time until they eventually realise a profit.