Introduction to Real Estate in Thailand

[bendshead]

Can someone point me to a source for better understanding the real estate market in Thailand? I've budgeted 2mm baht for wife to purchase some property around Kanchanaburi. However, it seems options are few, realtors non-existent, and on its face the market seems to be very inflated (eg., USD250k - 500k per rai in an up and coming area). How to make sense of it all? Any guidance appreciated.

[mcfish]

I'm curious how you came to conclude it's over inflated ?

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[bendshead]

I haven't concluded, but merely suggested that " on its face " it seems that way. Hence, looking for guidance...

[pinkpanther99]

I can't offer any advice on the real estate market in Kanchanaburi but after looking extensively at buying a house in Hua Hin I'd offer that buying a house in Thailand should probably be avoided at all costs.

1. Laws on foreign ownership means any investment in real estate is a huge risk.

2. No legal system to back you up if it all goes wrong.

3. Poor quality design and construction.

4. Uncertain political situation.

5. If like me you work here but would also need a mortgage, lousy mortgage rates make the investment even less desirable.

Why buy when I can rent a house with a pool for 15,000 per month and sleep well at night knowing we just walk away if my circumstances take a turn for the worse.

My plan is to save the money I earn here an invest back in my home country. Much safer.

[bendshead]

Thanks PP. Actually, we live in the U.S. but have some money for her to invest in her hometown in the event that she or we want to come back one day. I agree with all your points though...

[mcfish]

Google list a number of Realtors there. I can't see any problems with your thai wife buying land in her own name. Pink panthers warning is aimed more at farangs I would have thought. Regarding the political situation, there has never been stability however that has not stopped rising housing prices and you won't be getting a mortgage so irrelevant. If you find a great deal you shouldn't be discouraged

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Edited December 9, 2015 by mcfish

[pinkpanther99]

Yes, my warning is aimed at Farangs.

Don't let me put you off. I haven't got the money to lose and being only in my mid thirties, this kind of investment is one I have to get right as it could shape the rest of my life. For that reason, Thailand is just too risky, given that there is no real resale market and for the reasons I mention above.

If I was retirement age and coming here with a decent pension and savings in the bank then my attitude may be different.

[PattayaPhom]

A quick search on DD Property throws up 1 Rai from 800K-3mil,...who told you its 16 Million Baht a Rai..the wife???

[KittenKong]

... the market seems to be very inflated ....

It seems that you have already understood the most important aspect of the Thai property market: prices are way too high.

Second to that you only need to be aware that anyone involved in any property transaction is probably a cheat and a liar.

[Colabamumbai]

Every one in the area will become a real estate agent overnight, if they know you are looking to buy.

[Colabamumbai]

Google list a number of Realtors there. I can't see any problems with your thai wife buying land in her own name. Pink panthers warning is aimed more at farangs I would have thought. Regarding the political situation, there has never been stability however that has not stopped rising housing prices and you won't be getting a mortgage so irrelevant. If you find a great deal you shouldn't be discouraged

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"Great deal" there are no great deals for buyers in Thailand, only sellers.

[1FinickyOne]

All real estate markets are place specific but if you are talking about 15 MM baht per rai - that does not sound correct - unless for some reason there is vast commercial possibilities for that land in which case, you might want to look nearby but elsewhere… sometimes people in "up and coming areas" get carried away with possibility for the future.

I would look around - a lot. There is no substitute for knowledge, even if it is a bit more difficult to come by - as there are no multiple listing services and not easy to find actual records of previous sales…

good luck - start shopping around. Ask the locals.

Basic rule is that land appreciates [if you pay a market value] and structures, homes depreciate…

[GlutinousMaximus]

Hi OP

In my experience, a lot of the property market in Thailand is informal, word-of-mouth at ground level so maybe try and have a long holiday or two where you can have a good look around. Thai property prices are extremely location-sensitive. One rai of general-purpose farmland away from a road and utilities can be had for peanuts. The same rai fronting a busy highway costs the earth.

Having said that however, we did just find a Thai buyer through kaidee.com , so don't rule out the websites (ddproperty.com is also worth a look).

The other thing you need to get a feel for is true market value. Ask a farmer how much any parcel of their land is worth and they can tell you fairly accurately. By market value I mean that if you buy it, you can immediately sell it at something close to the price you paid for it. I think a lot of Thais advertise their land at some vastly inflated price - they're just fishing and/or they think the market will rise to their asking price. Also, a lot of sellers will inflate their prices if they get wind of farang (or mia/wife of farang) interest - it's best to approach it very discreetly as a strictly Thai-only affair until the deal is done. Maybe your wife has some (trusted) relatives that can do some discreet scouting for you (incentivised by a small commission)?

If it were me, and I was looking for a long-term sleeper investment, maybe with a view to relocating here sometime in the future, I'd be looking at locations where there's some possibility of future development - e.g. a 2-lane highway which might be developed to a four-lane, or a village or town that was expanding etc. or would be eventually subsumed by a larger town. In that vein, I know of places which you could have bought for 50,000 a rai 10 years ago that are worth 5 million today - that's quite a nice ROI in any language.

There are also local land agents who know about plots for sale and find buyers - maybe worth getting a few contact details there. I've not found agents here to be particularly dynamic though (as opposed to the go-getting American realtors you're probably used to)

One advantage of the Thai property system is that if you do find something, and the owner has clean title (e.g Chanote), you can get the transfer done in a matter of hours, although if it's in your wife's name, she'll need to be there in person.

If you're a cash buyer, try making some really cheeky offers (by which I mean 50%-75% of asking price). You've nothing to lose and you might get a bite.

[ToS2014]

I have never considered purchasing a property here. However, my experience with agents in locating a rental home is quite insightful. One agent showed me a house that he listed for sale and/or rent. I went to view it without the wifey as she was at work. The agent said that the owner was out of town and that the keys were with him, so we just had a walk around and a peek into the windows. That evening I took the wife. A couple Thai's showed up and started talking to the wifey, next thing I know one of them is opening the locked doors to us; he was not the owner, just the 'caretaker' for the housing development. House looked great and the advertised rent was within my budget. So I called the agent, I told him that as soon as I had a copy of the house book and owner's ID that I would sign a contract; I didn't let him know that the doors were opened to me. He countered with 'to take it off the market a 10K deposit would be required'. I countered with I will pay the two months deposit when the house book and owner's ID is provided. He responded with I will contact the owners immediately. Have never heard back from him. On a side note, the wife called the number provided by the 'caretaker' and spoke to the owner. She was quite surprised that the house was advertised as for sale AND rent; her intent was for sale only. Hence, I would never have received the house book or ID required for immigration.

Second and will keep it short. Contacted a second agent with three homes that I selected on their website and requested a viewing. Only one home was available; one was rented/sold and the other the owner changed their status to for sale only. Scheduled a viewing. The agent showed up promptly and drove me to the property. I asked where are we going, she explained that we are going to the house that you requested to see. It appears that the address/location provided on their website was inaccurate. Ended up being shown a friend to the agents house; totally different area, and totally different house!

I was lucky with a DD property agent. Good luck in your adventure!

Edited December 10, 2015 by ToS2014

[fang37]

Property prices - high or low? It is all matter of supply & demand. Where they meet = price.

[bendshead]

Kenk24, I would never have believed but we're "on the ground" calling into advertised plots. Still smh how it's possible ...

Thanks to all replies. Basically, we're now taking the approach to network through all friends to see what might be available by word of mouth. Still slim pickings but we've been told as one poster noted here that it can take time to find something word of mouth...

[bazza40]

Thanks PP. Actually, we live in the U.S. but have some money for her to invest in her hometown in the event that she or we want to come back one day. I agree with all your points though...

Perhaps buying gold in lieu of property could be preferable, although gold is not an investment, more a currency hedge. Your Thai wife will probably be like many Thais, gold is regarded as a safe haven. And it's readily negotiable in Thailand, whereas property can be on the market for years.

[GlutinousMaximus]

OP

You could also look at bank repossessions - a lot of the main branches in towns have loads of repossessed properties on their books. It's a very mixed bag though - a lot of dross, but if nothing else it can help with forming a picture of market values as banks typically want to offload them in a reasonable time-frame.

[fang37]

I have researched repossessions. Unless the bank can recover their debt, they will not discuss.

[GlutinousMaximus]

I have researched repossessions. Unless the bank can recover their debt, they will not discuss.

Possibly true, however when they initially lent on the property, they would have accurately appraised its market value. A bank won't lend you 10 million baht to buy a piece of land that's worth 1 mil because they will be exposed to a potential loss.

[fang37]

Agree but there is a matter of accrued interest on the loan & the current condition of the property.

[GlutinousMaximus]

Fair enough, but someone must be buying repossessed property as banks are constantly accruing it - if they weren't offloading it, they'd own half of Thailand by now.

[fang37]

Buying at the bank's price which may be over the odds.

[KittenKong]

I have researched repossessions. Unless the bank can recover their debt, they will not discuss.

Possibly true, however when they initially lent on the property, they would have accurately appraised its market value. A bank won't lend you 10 million baht to buy a piece of land that's worth 1 mil because they will be exposed to a potential loss.

Really? Seems like the banks in the US and parts of Europe were doing this regularly prior to 2008.

[fang37]

They say that you cannot go wrong in real estate (unless you buy in Thailand.)

[djlest]

Do yourself a favor and rent here for 1-2 years first... you wont need to pay more than 10-15k per month for a house down there.,..

That gives you time to decide if you really like the area and to see if the true value of land down there is worth your hard investment...

Failing that, condos in Pattaya are going cheap now because of a collapse after the Russians have left, plenty for 2 million...

you cannot own a house, only she can... there are usufruct ways but its not guaranteed and not a good idea if your married...

Ive lived here 12 years and i still want to own a house, but instead i buy condos rent them out and that pays for me to live in a nice house with a big garden... use your head, or you will lose everything here in a thai smile...

[fang37]

I looked into usufructs. The concept sounds good but I have my doubts of its advantage in a dispute.

When in doubt buy a condo or rent.