Housing Slump or what ?

[Just1Voice]

We bought our house 7 years ago for 2.5 mil. Since then I've put close to another 1.5 mil into it. We thought about selling, and had it appraised by 2 different banks. One said 4.2 mil, the other said 3.9 mil. We listed it for 4 mil, and "willing to negotiate" That was 6 months ago. Only had 2 interested parties and both them them offered 3 and 3.2. Told the wife, "Forget it. We'll keep it and it goes to our son when we die." She agreed.

Chiang Mai is being absolutely flooded with new houses and shop houses going up like mushrooms after a rain in the forest. And the overwhelming majority of them are sitting empty.

[Robert24]

yes it's oversupply that puts pressure on prices.

Maybe recommend you market it yourself to foreigners might be a good approach. and give it more time. 2.3m sounds quite reasonable, I wouldn't go lower than that. What mooban is it? one of the big development companies in Thailand or a small one? The issue with small moobans is that they will look pretty run down after a few years and nobody has any interest anymore in your property. If it's a big one that maintains the area very well (i.e. Sansiri, Land & House) than you can easily wait a few years until prices recover. Those will be in demand also in 10 years from now.

[mesquite]

Maybe it's because we're in a worldwide deflationary recession.

[slipperylobster]

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

Who can buy land? Wish I could..but am not married. I suppose a wife/thai friend.

[hml367]

We bought our house 7 years ago for 2.5 mil. Since then I've put close to another 1.5 mil into it. We thought about selling, and had it appraised by 2 different banks. One said 4.2 mil, the other said 3.9 mil. We listed it for 4 mil, and "willing to negotiate" That was 6 months ago. Only had 2 interested parties and both them them offered 3 and 3.2. Told the wife, "Forget it. We'll keep it and it goes to our son when we die." She agreed.

Chiang Mai is being absolutely flooded with new houses and shop houses going up like mushrooms after a rain in the forest. And the overwhelming majority of them are sitting empty.

There are still derelict leftovers all around Chiang Mai from the lead up to the 1997 crash.

[1FinickyOne]

The rare time I drive through a moo bahn in CM area, it appears to be less than 10% occupied. Plenty of 'for sale' signs and I would guess plenty more have given up or are hoping for a never to come recovery [as they keep building].

Houses here, mostly due to climate, are depreciating assets. Land appreciates.

Generally, I would say it is not easy to sell anything in that chaotic non-transparent "market" - w/o multiple listings and other tools helpful for all.

From the little bit of looking around that I have done in CM - I would guess that salability would be determined by walking distance to Thapae Gate -

and Doi Saket would be quite a hike.

[bazza40]

There are a number of factors in the OP's lack of success, as follows:

1/ Thais will pay Thai price, and they want new houses - secondhand doesn't cut it.

2/ Chronic oversupply in Chiang Mai. Speculators are building condos and houses in the expectation CM will become the northern gateway for the Chinese. In view of its location it is entirely possible Chiang Rai will be that gateway instead.

3/ Real estate agents in CM are useless. Anywhere else in the world they would probably be out of a job.

The only advice I can give is to advertise with plenty of photos in areas frequented by falangs.

As I've said before on TV, it's quite easy to get into property here. Getting out is another story. My landlord has had the condo apartment I rent on the market for more than 3 years. I don't think I'll be moving for a while yet.

I'm forecasting a property crash here in CM, because the speculators have presumably borrowed to finance construction. With interest payments to meet, and no cash flow from the empty properties, how long before the banks move in? Has anyone noticed a downward trend in rental prices?

[LivinLOS]

The rare time I drive through a moo bahn in CM area, it appears to be less than 10% occupied. Plenty of 'for sale' signs and I would guess plenty more have given up or are hoping for a never to come recovery [as they keep building].

....

Houses here, mostly due to climate, are depreciating assets. Land appreciates.

...

From the little bit of looking around that I have done in CM - I would guess that salability would be determined by walking distance to Thapae Gate -

and Doi Saket would be quite a hike.

I wouldnt put many down as low as 10% but some moobaans are really 50% and under occupied.. I cant understand why people buy homes to 'sit on' which Thais often repeat to me (bangkok people buying as an investment) when the homes seem to both depreciate and need upkeep. My old moobaan about 30 - 40% occupied at any one night judging by lights on and cars parked.. another 10 or 20% owned and visited just for upkeep.. And a full 40 - 50% were actually vacant, decaying, for sale for rent for anything.. I do think that was a special case tho, a lot of repos happened there or unsold at build time inventory.

Lastly I dont actually agree that nice places a bit out of town are so unappealing, I think theres many of us who like to live outside of the downtown and suburbs and would rather drop into town rather than live there full time. Its just so many moobaans are made with Thai tastes, 2m of cement around the entire property with no garden, that finding nicer moobaans is instantly writing off a large amount of inventory.

[Just1Voice]

The moo ban we are in is not far from Land & House, but not as big. Total of 100 houses, and all of them sold, with the exception of maybe 2. There were only about 20 houses completed when we moved in. The quality is good, and the overwhelming majority are solid middle class people. Very few kids. Basically no loud parties, unless someone gets married, and during the week, just about everyone is lights out and in bed by 9:00. Very quiet. I actually like it here, and the thought of selling was just an idea we played with. But no one else wanted to play. lol. No problem. Our son is 32, working on his Masters, and says eventually he will find a good woman to marry. In the meantime, he loves this house, and was happy when we decided not to sell it. Works for me.

[SiSePuede419]

"the wife is a broker"

If you buy real estate in Thailand, you will be "broker" than renting.

Real estate bubble? What's that?

555

[sawadee1947]

I got very good experience with Simon from Perfect Homes CM. He will not list your house if there is no chance to sell for a reasonable prive. Others just list your house and you wouldn't hear anything again. I had to reduce my desired house price by more than 25%. My "desired" house price I calculated by comparing certain websites of property agents.

Doi Saket is "far" away from Big C or Festival. So I suppose it's not easy to find a buyer. And also depends on your plot size. (long time I couldn't find a buyer for another house of mine because it was near to a cemetry, 300m. At least a "farang" bought it)

In general house prices dropped in CM. Condos are stable more or less.

[Paul Catton]

Heading South on Highway 108, about 400mtr from Central Plaza is a small narrow street on the left which has 3B Boutique Bed and Breakfast on the corner.

Along this small street is a row of unassuming two bedroom terrace type houses.

One of which belonged to my mother-in-law which passed into the family estate upon her death a few years ago.

The property is now surplus to the family and was primarily used by out of town nephew and nieces as a base whilst attending CMU.

My father-in-law has secured a buyer who has laid down an initial deposit against a total purchase price of 2,500,000 baht.

This has been done Thai to Thai with any marketing of the property by word of mouth and local gossip.
It may possibly be a slump for some type of houses, I couldn't tell you, just thought I should provide this as an observation.

[hml367]

"the wife is a broker"

If you buy real estate in Thailand, you will be "broker" than renting.

Real estate bubble? What's that?

555

I disagree. I have already saved more rent than the money I put out for land and house in someone else's name and I have a lease on. You can even figure in the interest if you like. Then there are other factore which would be paricular to a person's situation.

However, for most foreigners I would agree you are correct. That is quite the problem in Chiang Mai now.

[puukao]

losing money on a property is a very hard concept for many.......cars, sure.....almost anything else, sure.....but not property.

doi saket isn't the best location, but WAIT 100-years and it will be!!!! the chinese will soon buy everything.......they like CM, so they will keep expanding.

location is good, but timing is much more important.

i can only imagine what people said as you were paying them..."oh, best ever. you make lots of money. oh you get rich. oh you are now best of best of best."

if you really need to sell, i'll give you 1,000,000 baht sight unseen...

[kiwikeith]

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.

There have been a few stories about money laundering into real estate, here in Hua HIn there is shop houses going up evrywhere.

Resorts all down the coast from Cha Amm but thousands of units vacant. (17000) I heard but think far more.

Property is I heard taking seven years to sell on average.

The rental market is slowing or I mean you can get huge reductions on rent. In western countries a collapse of the rental market is the first sigh of a slump.

I have been shown land for 2 million a Rai that others have been shown for 1 million a Rai.

I met a Falaang who is in real estate who says you can get it for 400.000 per Rai.

However there is some rich people land banking that will sit on land regardless if it is less far less than they are asking.

Banks are sitting on reposessed properties all around Hua Hin that they let get srtipped and want over the top money for.

I have seen properties reduced on TV by millions of BHT.

While Eurpoe and Australia and NZ properties are still rising, this does not appear to be the case in Thailand.

Many financial experts globaly are predicting a global property bubble burst in the near future.

My opinion is that Thailand is in a backward price slide or correction bubble burst mode now.

[dotpoom]

I had my house on the market for 2 years and couldn't sell it. I really didn't have any reason for selling it, except for "old habits die hard". I have always enjoyed the buying and selling challenge and naturally get a great lift out of making a profit. Actually I love the house and had it just the way I imagined a house of mine would look some day....but still couldn't resist the "itch".

Anyway, I took it off the market and as true as I'm writing this reply....as every day goes by my gratitude is growing and growing daily that it didn't sell. I have only recently taken to pull myself away from either the TV, Radio or Internet to sit outside and actually observe what's going on in the garden (butterflies, frogs etc.') and listen to the water streaming past my outside. BBQ as the sun is setting and thinking up new ideas to move this and that here and there. I have decided that this is the place where I will spend my last days and hours on this planet...it is beautiful (to me).

I have for many years now lived my life in the knowledge that the "flow" (God) knows what's better for me than I do myself, so was never perturbed that it didn't sell and would often say to the wife "Up to Him".

As always...He was right and what was best for me has been the outcome.

Edited December 1, 2015 by dotpoom

[realenglish1]

Right now there is building going on because of the banks They are still sinking money into projects. I suspect within 18 months the bubble will burst and the Thai punters are going to be hat in hand

You can only inflate the price of r/e if there are enough buyers. There are not enough buyers entering the market.

The bubble has a few holes in it now and is starting to deflate . Mark My words on this

[pokerkid]

I had my house on the market for 2 years and couldn't sell it. I really didn't have any reason for selling it, except for "old habits die hard". I have always enjoyed the buying and selling challenge and naturally get a great lift out of making a profit. Actually I love the house and had it just the way I imagined a house of mine would look some day....but still couldn't resist the "itch".

Anyway, I took it off the market and as true as I'm writing this reply....as every day goes by my gratitude is growing and growing daily that it didn't sell. I have only recently taken to pull myself away from either the TV, Radio or Internet to sit outside and actually observe what's going on in the garden (butterflies, frogs etc.') and listen to the water streaming past my outside. BBQ as the sun is setting and thinking up new ideas to move this and that here and there. I have decided that this is the place where I will spend my last days and hours on this planet...it is beautiful (to me).

I have for many years now lived my life in the knowledge that the "flow" (God) knows what's better for me than I do myself, so was never perturbed that it didn't sell and would often say to the wife "Up to Him".

As always...He was right and what was best for me has been the outcome.

nice sales pitch

Edited December 1, 2015 by pokerkid

[Genericnic]

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.

Any house located on land I can't own is in a poor location.

David

[elgordo38]

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.

It all boils down to one word "Greed" plain and simple. I would not touch real estate here with a 10 foot pole. My g/f bought a piece of land a small piece. Someday after I am gone she will build a small house on it although I constantly tell her get some rich foreigner to build the house keep your money in the bank.

[dageurreotype]

^^ 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).

A neighbour's theory as to why there is so much overbuilding here, predominantly on Phuket, is because of the banks' very low interest rates. His contention was that a Thai would rather build something he may be able to offload at a later date and make more money. However, being a homeowner myself and therefore aware of just how much you must spend to maintain it in this, a tropical country, simply doesn't make sense. I agree with you. I personally believe it's a mix of 'monkey see' and massive money laundering.

[elgordo38]

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.

Read the article and noted that like most real estate agents he states "now is the time to buy" Yes the review is honest but again he is in the real estate business shouting "You all come" I again state I would not touch real estate here with a 10 foot pole.

[dageurreotype]

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.

This has been a 'pure buyers' market' ever since the European economy went pear shaped some ten years ago and has never recovered. Before that every Sunday would see some aging farang being scootered around my neck of the woods by his ti rak looking for something to buy her. I agree that a lot of greedy farang have contributed to the devastation of Phuket being enabled by the local bent OBJ's to throw up their Godawful multi storey condos in predominantly residential neighbourhoods, thus further devaluing their immediate neighbour's home's value at a stroke. I fortunately do not fall into this category but feel for the poor buggers who do.

I now also understand that to Thais, a structure is of very little importance/value, it's the land it sits on they prize, their coming from a culture where bamboo shacks were routinely replaced every year or so. They simply don't share Westerner's different value system.

I notice your nik. Toying with a relocation. How goes it in SR? Lovely town. Completely different vibe to here.

[Dan5]

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.

I second that emotion. I've lived in Thailand for a long time and find it a great place to live. The best. Wouldn't want to live anywhere else and don't plan to.

[Farangdanny]

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.

This seems like a silly comment ! Everyone agrees that the housing market is in a slump. Priced to sell !! It does not matter what the price is if NO ONE IS LOOKING !

[spidermike007]

My experience with agents here is they they do not work hard, are not too motivated and they hardly ever follow up unless something drops into their laps. Most are terribly unimpressive.

[Farangdanny]

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.

I understand the market much better than you assume. My brother and I and a friend have been, independently, building houses to sell here for a long time. The market we aim for is farang with Thai wife. He understands the quality, she just wants the house !! The particular house I mentioned is one very nice house that is being sold for less than the cost of completing it. That is why I am so surprised.

[MaeJoMTB]

Ban Wiang Doi (aka 'Ban Mia Farang' to the locals) ain't all that great a place though.

Too far out of town, poor internet choices and liable to flood.

[MaeJoMTB]

I'm forecasting a property crash here in CM, because the speculators have presumably borrowed to finance construction. With interest payments to meet, and no cash flow from the empty properties, how long before the banks move in? Has anyone noticed a downward trend in rental prices?

Nah, mainly financed by money laundering, they don't ever need to sell.

Even the land price will make them enough clean money.

[Farangdanny]

"the wife is a broker"

If you buy real estate in Thailand, you will be "broker" than renting.

Real estate bubble? What's that?

555

I disagree. I have already saved more rent than the money I put out for land and house in someone else's name and I have a lease on. You can even figure in the interest if you like. Then there are other factore which would be paricular to a person's situation.

However, for most foreigners I would agree you are correct. That is quite the problem in Chiang Mai now.

I am really surprised by the number of people who say that it is better to rent !!! It has been proven over many, many years that that statement is pure bunkum, nearly always used by people who can not afford to buy. I have bought every house I ever lived in, in five different counties. I always sold at a profit and in two cases, more than doubled my money !!