Two-tier Pricing Claim Baffles Developers

[george]

Two-tier pricing claim baffles developers

PHUKET: Real estate developers have reacted with bafflement and irritation to an accusation that the property industry in Thailand indulges in double pricing, with foreigners paying up to 75% more than Thais do for homes.

The accusation came in a report published yesterday by the South China Morning Post in Hong Kong – the biggest market by far for the high-end residential property available in Phuket.

The paper quoted Bangkok-based Francis Lai Pang Fee, former Chairman of the Thailand chapter of the prestigious London-based Royal Institution of Chartered Surveyors (RICS), as saying that the tourism industry’s much reviled two-tier pricing system was mirrored in the residential property market.

“Assuming it is a prime location, the increase in price for foreigners can be as much as 75%,” the newspaper quoted Mr Lai as saying.

“Normally, such projects ,which are sold off the drawing board, are offered to foreigners first at the higher price. Later, the leftovers are sold locally at a discount.”

Bill Barnett, CEO of consultancy c9 Hotelworks and developer of the successful East Coast Ocean Villas project, told the Gazette today, “Probably 90% of the clients are non-Thais so it’s not a very practical thing. I’ve never seen any two-tier pricing, or been aware of it.

“Normally, when you buy off plan, you get better value, and when sales reach critical mass, prices go up.” But, he said, this was a normal pricing strategy, and had nothing to do with nationalities.

There were no “leftovers” as described by Mr Lai, he said, adding, “If anything, the last few properties sell at a premium.”

Tanan Tanpaibul, developer of The Heritage, where homes are selling for 7 million to 10 million baht, said, “No, no. Not in the property business. The land price and the building costs are the same for anyone. We have both Thai and foreign buyers and we sell to them at the same price.”

David Edwards, Director of Green Heritage Developments, which built Katamanda, said, “It defies logic and it’s certainly not the case in anything I’ve been involved with.”

Long-time property agent and developer, William Pinsent of Phuket Land, could think of only one circumstance where there might be a price differential – in the selling of mixed condominiums, where the 49% earmarked for foreign freehold ownership might carry a premium of 20%. This was because those units could be sold to anyone in the world, while the remaining 51% could only be sold to Thais.

“But that’s a supply-and-demand issue,” he said, “and the buyers know this.”

He described Mr Lai’s allegation of a 75% difference as “absolute crap”.

Even in the Thailand chapter of the RICS, Mr Lai appears to have little support for his views. The current chairman, Haydn Thomas, told the Gazette, “I would personally distance myself from the article. I am not aware of any two-tier pricing system [in the Thai property market].”

--Phuket Gazette 2004-04-08

[britmaveric]

Well- I think the assumption can be made else where in Asia, Japan pretty much did the same thing to me when I was renting a flat there last year for 3 months. Higher prices always for the Gajin as I was told.

[mango head]

Of course the agents and developers are going to deny it happens. They don't want to spoil a good thing. Especially if they are working on commissions.

[sonthaya]

TIT, or this is Asia, you should expect anything, if you donn't like i´t, stay at home

[dr_Pat_Pong]

Of course the agents and developers are going to deny it happens. They don't want to spoil a good thing. Especially if they are working on commissions.

They'll deny it always, even if the are caught out for certain. Developers throughout the world look after themselves first, second, and third.

[Dutchy]

Of course the agents and developers are going to deny it happens. They don't want to spoil a good thing. Especially if they are working on commissions.

They'll deny it always, even if the are caught out for certain. Developers throughout the world look after themselves first, second, and third.

After acquiring an eight-rai plot, Barnett proceeded to construct three-storey condominiums that initially sold for about Bt4 million each.

With strong bookings, the developer has pushed prices up by 20 per cent in the belief that demand from overseas buyers will continue to be strong.

Source: http://www.nationmultimedia.com/page.news....ess=1&id=112076

Very honest, farang demand drives prices up..... in today's Nation

Dutchy

[kurgen]

Property developers and real estate agents are dishonest, I don't believe it.

Another illusion shattered !

[dr_Pat_Pong]

Property developers and real estate agents are dishonest, I don't believe it.

Another illusion shattered !

and there is no Santa Claus either

[Schmeen]

It's business....something is worth the price somone else will pay for it.

Quite simple really.....and ignorance of how much something is worth is not excuse.

If something is in your opinion overpriced, don't buy it.

######, in the UK you pay what's written on it, and mark up %'s are way higher than in Thailand, including, the fees of the agent, the agent's agent, the transporter etc.

[englishoak]

Ok But the Tooth Fairy IS REAL right ??

[simon_derv]

i don't know who that guy from South China mag. got his info from but all prices are quoted on brochure and published in both thai and english. moreover, if you look at constryuction costs and land prices, you will see that it is not being a foll to pay 55,000-60,000 a square meter on well famous beaches with good quality developments.

Then, some developers might not deliver what they promise, or with boolshit land titles, but as market become more and more competitve, it is less and less. Differences in price can come from agent, that overcharge clients (i think both farang and thai) but not from developers. and it is always possible to buy dirrectly from developers. Moreover, Thai people is a really minoruty in condo purchasing in Phuket. Maybe 5 - 10% maxi.

[Thetyim]

Took you a long time to find this thread didn't it ?

[apetley]

“No, no. Not in the property business. The land price and the building costs are the same for anyone. We have both Thai and foreign buyers and we sell to them at the same price.”

555555555555555

I am present looking for either a ready built home or some land to buy and build my own place. Have even been told 'you farang, can afford more' when I queried a price. Some will deny double pricing goes on, some will admit it. My guess is that the ones who admit it are marginally the more honest, Andy.

[dr_Pat_Pong]

Ok  But the Tooth Fairy IS REAL right ?? 

<{POST_SNAPBACK}>

Absolutely

[The_Eye_Of_Sauron]

Can't we look on the positive side of this?

Even after the allegations by this clown in Hong Kong, pretty much everyone in-the-know has said its misrepresentative.

Of course all you Negative thinkers and Conspiracy Theorists automatically assume that he was being accurate.

You get 2 - tier pricing when its a Farang looking around Isaan for a land plot rather than a local buyer - but not in places like Katamanda, Phuket,.

[haha]

one of the things I studied in college was real estate. the 2 approaches to valuating property is the income approach, and the market approach.

the income approach is the old method which most people don't use anymore.

in the market approach, the value of a property is based on how much someone will pay for it. if even one person is willing to pay a certain price, then, that will be the going price.

most of the condos in bangkok are bought by foreigners. so, therefore, the price for these condos are based on what foreigners believe the price should be.

a few years ago, one of my friends bought a condo along sukhumvit. before he bought it, it was listed at 3 million baht. according to the agent, this was a good price. so, my friend bought it without even doing any research. ..he trusted the agent for whatever reason. later on, from other condo owners in the complex, he found out that the price he paid for the small one bedroom was the same price that 3 bedrooms were being sold at.

the word went around that my friend bought the place at 3 times the going rate. so, guess what happened? all the properties listed in the area were taken off the market for a month. evidently, all the real estate agents got together to reevaluate what the properties should be listed at.

...how do I know this, you ask? because another friend of mine was looking for a condo to buy at the same time. he was in the process of negotiating the price for a condo that he wanted to buy when all of a sudden, the agent he was working with told him that the seller decided to take the condo off the market.

later, the condo came back on the listing at a new higher price. ..true story.

get this, when my friend who bought the condo at 3 million baht found out that he overpaid the going rate at the time, he just shrugged it off saying it was a good deal. according to him, quote, "you'll never get a deal like this in the states."

moral of the story. value is a state of mind whether it be stocks, bonds, houses, and any other material thing - even money. if enough people BELIEVE something is worth a certain price, then, it is worth that price.

..supply and demand.

another story...

another friend of mine bought this condo in the sathorn district. he was told that his unit was one of the last ones available. so, naturally, being eager to buy, he bought it.

..later, he found out that a whole section of the condo complex he was in was vacant. more than 50+ units. my friend bought his unit over 4 years ago. and you know what? those 50+ units are still vacant.

right? wrong? ..let the buyer beware.

people, this is not america where there are laws against fraud, or title companies available to protect you from claims to your home. remember that.

not trying to scare anybody from buying here in thailand. frankly, the way things are going, prices will probably continue to rise because of the large demand from foreigners. so, if you are buying for an investment, you can't go wrong in buying - for now.

personally though, I would rather rent. to each their own.

[toastwars]

TIT, or this is Asia, you should expect anything, if you donn't like i´t, stay at home

Is that as constructive as you get or is there a point to that pointless waste of screen space you just wrote???