Housing Slump or what ?

[Farangdanny]

Two years ago, I built a very nice two floor 3 bed/3 bath,200sq.mtr. house to sell. In nice walled garden with lawns, in good Mooban near Doi Saket. Good quality, insulation,3 wire electric, Euro. kitchen etc.

Selling price recommended by agents, 3,500,000 Baht. Since then, I have reduced the price three times, last time to 2,300,000 Baht. This is a few hundred thousand than the total cost to me, but still no viewers !!! Amazing !!

Edited November 30, 2015 by Farangdanny

[worgeordie]

Agents,try selling yourself,I think you will have better results,

plus it all depends where the house is located,that would be

just as important as the price.

regards Worgeordie

P.S. Doi Saket, that's a long way out,agents might not be bothered to bring

buyers that far,plus it will be more difficult to sell because of the location. good luck.

Edited November 30, 2015 by worgeordie

[LivinLOS]

Selling on the secondary market seems nuts.. Theres just so much inventory sitting vacant and no one is picking it up..

The actual floor where houses are changing hands is hard to determine, I had an agent show me a home in need of total refurb for 4, which I thought high, and he countered that with it being sold in a week.. Another mate is (and I am incredulous at this) considering a bare shell for refurb at 6.5, I fail to understand why he would pay more than perhaps 3 simply because he liked the location.... Yet on my old moobaan there was a 5 bedroom bank repo home on the market for 4 years at 2.8. A mate of mine picked up his home from an asking of 4.x at 2.4..

I was recently offered a substantial place that was asking 12 a couple of years ago.. and in the last 6 months has gone 8.5 7.5 6.5 (or offers) without a bid. Hes getting closer and closer to my lowball stink bid.

Edited November 30, 2015 by LivinLOS

[NeverSure]

We have an old saying. "There are only three things that matter in property valuation. Location, location, and location."

To me, all of Thailand is a poor location.

[Trujillo]

The problem is that many people who own property/houses are still living in some fantasy world and think they can get millions for something worth far less. (The lady across the way has a house and land that is probably worth 2.8 to 3 million baht, but is asking 7 million.)

And then you have people who think we are in a slump and nothing is worth half of what the asking price is.

Personally, I think we saw this bubble starting to expand to nearly bursting a couple years ago.

Having said that, there are still loads of constructions going on -- housing estates, new condos, the beautiful and stately shop house rows....Either some cabal thinks things will eventually turn around, or there's a hell of a lot of money laundering going on.

[Puwa]

Until the day comes when there's greater transparency in the local real estate market, I don't think anyone can say what's going on. (Condos are a bit easier, perhaps) Transparency includes a reasonably functioning property tax system, more data from mortgage lenders, proper valuations, etc. Today we just see rampant speculation, lottery-style pricing, laundering of cash, hiding of assets, collusion by land officials etc.

I was recently chatting with the owner of a small farm and restaurant in San Sai. The family acquired the land from the administrative court, which handles seized assets. The listing was for 2 mil, but the official decided he wanted 4, 2 more mil for him to pocket. Think of the repercussions on future value and sale in a situation like that.

I'm not saying it's impossible to turn a profit, but you need luck, balls, time, and investment money you can afford to lose.

[LivinLOS]

^^ Agree with that..

Theres a huge variation in build quality, but you can kind of assess that with skill... But the market is very illiquid and as I tried to point out, some farangs seem to think a bare shell at 6.5 is a bargain, while I see homes that have been on the market since I moved to CNX over 4 years ago.. Same homes, still for sale..

Land seems easier to value, and seems to have had some steady reasonable appreciation.. But land and homes, you can throw a dart at the price range and see all kinds of values.. But if you need to leave Thailand, and have say a 6 month timeline to sell, the ability to liquidate the asset for anything like similar asking prices seems very rare. Doesnt help there are so many vacant decaying homes, I guess a product of not having real property taxes or cost of ownership (but they fall apart so how is that not a huge cost ?? Seems like terrible financial decisions to me).

[chiang mai]

We have an old saying. "There are only three things that matter in property valuation. Location, location, and location."

To me, all of Thailand is a poor location.

Anything and everything about Thailand is bad as far as you're concerned! Get over what ever happened to you out here and enjoy whatever you have out there (and stay there). Mostly, stop being so vindictive and grow up.

[Briggsy]

Estate agent is the cause. They don't do anything.

Advertise yourself (ensure 2 languages). Take your time to construct the ad well. Use good pictures. Research the market and place ads on sites and locations where things shift. Ensure you are contactable. Finally ensure everyone in your neighbourhood knows it is for sale. In Thailand, houses are much more likely to be sold someone already living in the same street / moo bahn than in Farangland.

[MESmith]

Build to live in is the right way. Build to sell seems crazy to me. Buy land to sell, ok.

[cyberfarang]

I think the difficulties are that Chiang Mai is flooded with properties up for sale toppled with the owners being greedy and asking too much over the top.

I don`t consider properties as an investment in Chiang Mai but are homes to live in. My girlfriend and me have a nice house in a decent area, but I know it will not sell for the price it cost for the land and having the place built and have settled in my mind that the only ways to get rid of it would be to practically give it away or keep the present house and buy another one somewhere else, neither which I could afford to do.

We did not build the house as an investment for profit anyways so not complaining.

Edited November 30, 2015 by cyberfarang

[opalred]

the wife is a broker

she says falangs came in mouthing loudly

about big pockets so price double or triple

now falang not comimg price go back for thai

lose 70% sorry have another beer drown sorrows

[THAIJAMES]

A lot of good points above and yes we are in a housing and economic slump with too much oversupply, not a good time to sell, maybe 2-3 years ago. If you can wait out another 4-5 years or be more creative in your marketing.

[mcfish]

Cant see why your blaming the housing market for not being able to sell. Its pretty easy really, if your house is priced to sell it will sell very quickly.

[khwaibah]

A lot of good points above and yes we are in a housing and economic slump with too much oversupply, not a good time to sell, maybe 2-3 years ago. If you can wait out another 4-5 years or be more creative in your marketing.

Your dreaming there was no market for 2 or 3 years back for a 2nd hand home. The market in Chiang Mai for 2nd hand homes has always been saturated. and will continue.

[TheSiemReaper]

The lesson here is - do your research before you invest in something and not at the point you intend to sell. This is a pure buyer's market and property will only sell if it meets the buyer's valuation. The fact that both Thai and farang have been hoist by their own greed is pretty much irrelevant to that.

[NeverSure]

We have an old saying. "There are only three things that matter in property valuation. Location, location, and location."

To me, all of Thailand is a poor location.

Anything and everything about Thailand is bad as far as you're concerned! Get over what ever happened to you out here and enjoy whatever you have out there (and stay there). Mostly, stop being so vindictive and grow up.

Naw, I don't think I'm ready to start doing what you tell me to do, but blabber on anyway.

I do think Thailand is a poor place for farangs to invest in real estate. What have you been doing that has you so edgy? Buying, LOL?

[worgeordie]

When you see houses for sale in Buri Ram, for 8-16 million,

very nice houses,I wonder what people where thinking to do

that,seems like they are Farangs,more money than sense,

do that in CNX,maybe you have a chance to sell.but not

there,unless you can find a stupid new rich arrival, taken

home by his Issan girlfriend.

regards worgeordie

[brommers]

This is not a market that behaves like one in the west. Once you accept that and learn the local patterns you can make an informed decision. After years of renting I bought. It is a more commodious property than I was renting and including costs such as maintenance, insurance etc I will have covered the cost in ten years compared to renting. Maybe I am fortunate but if you look at the market and control your spending you can do better by owning a house. But certainly do not apply westen strategies of buying to sell at a profit. There is an area by area glut and your local buyers think differently to you.

[sappersrest]

In Chiang Mai houses are for living in, not speculation never invest more than you cannot afford to loose.

[namatjira]

Yes, like everything it's different over here, applying farang logic based on the farangs experience of his home country market will end in disaster......location is however still the over riding factor......2 shop houses in nimmanheimin area were nicely renovated, but they sold on the the market within 6 months for 2.5 and 3.5 million baht......

[theguyfromanotherforum]

Thais don't care about Euro kitchen, quality electric, insulation and all that nonsense. This is your mistake. They care about a nice shell and a car in front of the house. You simply don't understand the market.

[sappersrest]

Thais don't care about Euro kitchen, quality electric, insulation and all that nonsense. This is your mistake. They care about a nice shell and a car in front of the house. You simply don't understand the market.

Why would you want a nice kitchen if trying to sell when most Thais get there food in plastic bags from the market.

[bangmai]

You can actually apply certain aspects of western real estate logic to Chiang Mai. It's all about location, of course, but specifically, when the downturn (or actual crash in American markets) comes or came, the "infill" areas, where the lot is often worth more without the house on it, are the last to decline and decline by the least, and they are also the first to retrace their previous highs. The farther out locations, with a relatively unlimited supply of land decline the most, and take the longest to come back, if ever. This is even more applicable here, where the Thais aren't into second hand houses....unless it is in a prime location, which doesn't mean close to the overgrown tennis court or pool, whatever it is under that mess. The inexperienced/uneducated buyers focus on things that can be changed; paint, fixtures, trim, when they would be better off to buy solely on location. Budget constraints often push people to the exurbs, especially, when they need the bedrooms. It's called "drive to you qualify," and these folks are often the first sacrificed at the slaughter.

[bangmai]

Get proper appraisals: Royal Institution of Chartered Surveyors

http://www.rics.org/th/

http://www.thaiappraisal.org/english/the2001/default.php

[ezzra]

Since Yingluck has gone the army moved in, things has slowed down considerably in the real estate markets

as this government not as lavishly throwing money at framers and other frivolous promotions to appease

and win voters, hence the lull in the RE bushiness, once bustling land department office are much quiet now

with very few buyers and sellers...

[LivinLOS]

Build to live in is the right way. Build to sell seems crazy to me. Buy land to sell, ok.

100% agree.. Thats exactly my feeling.

Also if selling, realize all those little personal details and touches you added that you want in your build to live, doesnt add value to the next person.

[LivinLOS]

I know its another market.. But this, from the mouth of an agent, is fairly damning..

http://lovepattayaproperty.com/en-gb/news/2015/11/28/pattaya-property-market-update

Another agent was similarly honest on the stickman interviews a couple of months ago.

[LivinLOS]

Cant see why your blaming the housing market for not being able to sell. Its pretty easy really, if your house is priced to sell it will sell very quickly.

I dont actually agree.. I have seen homes change hands for (considerably) less than the cost of the build in the last year, let alone the build plus land..

You might call that priced to sell, but the reality is homes are incredibly iliquid here, much moreso than I remember Phuket or can say hua hin is.. Theres just so many new moobaans on the ring rds around the city, 1000s of units.. I think developers will be sitting on many of those for a long time (which leads to failed moobaan services) if I look at the SE of the city and the mae on side.

[LivinLOS]

Get proper appraisals: Royal Institution of Chartered Surveyors

http://www.rics.org/th/

But the point is, appraising fair value when there seems to be very few buyers, and property sold has a wide range of price points on very similar property..

An appraiser will do no batter in that random market spread than an experienced person with a keen eye.