Rent divided by Buy Price Numbers for condos in Bangkok

[patjk]

I'm considering buying a property in Bangkok in the relatively near future, and studying the market.  Condos are popping up everywhere, and based on Hipflat numbers the Sale values are increasing steadily.  However, rent doesn't seem to be changing too much, in general. This seems to be a sign of sale prices being inflated.

 

Is there anywhere where I can find the average Rent price / Sale price for different condos around Bangkok to see better potential properties?  I'm looking at places between 4-6M.

Thanks.

[Peterw42]

Hipflat shows asking price not selling price. Often, the two are not related. Im not aware of any sites with sales price data.

[trogers]

You can make use of asking prices even though they are inflated figures.

 

I use this formula

 

Real value = Asking price x Discount factor.

 

Discount factor = 100% - % of unsold stock.

[blackcab]

Hipflat has an awful lot of dreamers...

[funandsuninbangkok]

In the past year, prices have started coming down a lot. Massive supply and not many buyers.

 

have cash and offer letter, offer 30% of ask, wait a month call back offer a little more. You'll get some. 

[Allstars]

7 minutes ago, funandsuninbangkok said:

In the past year, prices have started coming down a lot. Massive supply and not many buyers.

 

have cash and offer letter, offer 30% of ask, wait a month call back offer a little more. You'll get some. 

Why not start at 10% of asking price?

[funandsuninbangkok]

14 minutes ago, Allstars said:

Why not start at 10% of asking price?

Got punched too much.

 

At thirty they laugh and shake their head. Can't figure out if your serious. Month later offer 35% as final. They know then. 

 

Never bid on anything you can't buy that day. 

[blackcab]

6 hours ago, funandsuninbangkok said:

In the past year, prices have started coming down a lot. Massive supply and not many buyers.

 

have cash and offer letter, offer 30% of ask, wait a month call back offer a little more. You'll get some. 

 

In Thailand, what is an offer letter?

[chiang mai]

6 hours ago, funandsuninbangkok said:

In the past year, prices have started coming down a lot. Massive supply and not many buyers.

 

have cash and offer letter, offer 30% of ask, wait a month call back offer a little more. You'll get some. 

30% you say, a 70% discount, wow, who'd have thunk it!

[trogers]

A good indication of rental yield in advertisements would those adverts that list both asking rent and selling price.

 

It's easier to gauge real rental value, and then use the Investment method to derive the property value for comparison to the asking price.

[patjk]

On 2/7/2017 at 1:01 AM, funandsuninbangkok said:

In the past year, prices have started coming down a lot. Massive supply and not many buyers.

 

have cash and offer letter, offer 30% of ask, wait a month call back offer a little more. You'll get some. 

Where are you getting the data that prices have come down?  

 

Good advice on the offers.  Right now I'm looking at the market but want to get access to more numbers - rental prices, sale prices, etc. but can't seem to find that info readily available online.

[trogers]

1 hour ago, patjk said:

Where are you getting the data that prices have come down?  

 

Good advice on the offers.  Right now I'm looking at the market but want to get access to more numbers - rental prices, sale prices, etc. but can't seem to find that info readily available online.

He was referring to actual transaction prices in the secondary market, and not launch prices...

 

There are two markets: the secondary market which developers do not have control, and the market where developers launch new projects with rising prices.

 

And stuck in between is the perpetual fog swamp called Resales units...

[funandsuninbangkok]

Ddproperty best database for prices but you need to watch. 

 

Price drops :

 

castle hill Ekamai penthouse 55 million 2016 Jan. - 38 mill now

 

heritge penthouse Soi 8 Nana 35 million Jan 2016 - 24 mill now

 

cascade penthouse 38 million unfinished 2014 - remodeled in 2016 - 36 mill now 

 

Soi 36 penthouse 38 million 2014 - 34 now

 

season place penthouse 65 million 2015

50 now

 

None of these have sold, even with price cuts. 

 

Why?  Rents are also going down. You can rent them all for 2 to 3 % of purchase price, avoid transfer fees, maintenance, tenant bs, and get 6% return from your money in a US REIT. 

 

Be patient. Current political situation not great. Songkran will be a bumpy ride and sellers will cave in. 

 

Buyers market starting in May. 

 

[blackcab]

5 hours ago, funandsuninbangkok said:

Songkran will be a bumpy ride and sellers will cave in. 

 

Buyers market starting in May. 

 

What sort of percentage reductions reductions do you envisage?

[ExpatOilWorker]

On 7/2/2560 at 7:53 AM, chiang mai said:

30% you say, a 70% discount, wow, who'd have thunk it!

I think he meant 30% off the asking price and multiply the average hipflat price with 0.7 seem like a good starting point.

[blackcab]

4 hours ago, ExpatOilWorker said:

I think he meant 30% off the asking price and multiply the average hipflat price with 0.7 seem like a good starting point.

 

He actually said, "offer 30% of ask".

[chrisandsu]

13 hours ago, blackcab said:

 

He actually said, "offer 30% of ask".

Even 30% of ask is overpricing these badly built boxes . 

[funandsuninbangkok]

On 2/9/2017 at 1:44 PM, chrisandsu said:

Even 30% of ask is overpricing these badly built boxes . 

Units I listed are older, better built than the new junk. 

 

Prices are down already 20 to 40 %. Need to get down another 20 to 40 to make sense but we've had two years without blood in the streets. That's a long time for Thailand lately. 

 

Next poop storm might be good time to man up and buy some stuff. 

[chrisandsu]

23 hours ago, funandsuninbangkok said:

Units I listed are older, better built than the new junk. 

 

Prices are down already 20 to 40 %. Need to get down another 20 to 40 to make sense but we've had two years without blood in the streets. That's a long time for Thailand lately. 

 

Next poop storm might be good time to man up and buy some stuff. 

Is having a dictatorship a big enough poop storm? How they have ridden out of this as they have already done I'll never know . If a western government was this much of a basket case the economy would be non existent . It's almost like Thailand gets a basket case pass ! 

Edited February 11, 2017 by chrisandsu

[trogers]

8 hours ago, chrisandsu said:

Is having a dictatorship a big enough poop storm? How they have ridden out of this as they have already done I'll never know . If a western government was this much of a basket case the economy would be non existent . It's almost like Thailand gets a basket case pass ! 

Because Thailand had never had a western style democracy, same like they never had a western style of law and order.

 

Elections and vote buying and selling see to this outcome, and changes come in the form of coups. Been here since the early 80s and have seen the same transitions of power.

 

What seems to be a poop storm to newbies are just normal evolution to us old timers...

 

 

[chrisandsu]

6 hours ago, trogers said:

Because Thailand had never had a western style democracy, same like they never had a western style of law and order.

 

Elections and vote buying and selling see to this outcome, and changes come in the form of coups. Been here since the early 80s and have seen the same transitions of power.

 

What seems to be a poop storm to newbies are just normal evolution to us old timers...

 

 

Yes I see what your saying. I just can't understand how certain rules in investability (is that even a word) apply quite strictly to the west due to stock markets but Thailand seems immune to this . 

[SaintLouisBlues]

13 minutes ago, chrisandsu said:

Yes I see what your saying. I just can't understand how certain rules in investability (is that even a word) apply quite strictly to the west due to stock markets but Thailand seems immune to this . 

Owning property in Thailand is much more a status thing than in the West

[darren84310]

On 07/02/2017 at 1:26 AM, funandsuninbangkok said:

Got punched too much.

 

At thirty they laugh and shake their head. Can't figure out if your serious. Month later offer 35% as final. They know then. 

 

Never bid on anything you can't buy that day. 

If you have proof of anyone accepting such a low offer, show us, otherwise it's best to keep it real.

[4MyEgo]

On 06/02/2017 at 7:10 PM, trogers said:

You can make use of asking prices even though they are inflated figures.

 

I use this formula

 

Real value = Asking price x Discount factor.

 

Discount factor = 100% - % of unsold stock.

Rental value x 12 months x 100/ the % you apply should give you what you want, e.g.

                                                                                                                                    15,000 per month rent x 12 months

                                                                                                                               = 180,000 baht/say 3% = 6,000,000 baht

 

This can be adjusted by the % you want to reflect to bring it in line with the market, e.g. 180,000 baht/ 4% = 4,500,000 baht

 

Other factors to be taken into consideration are the age of the building, i.e. the older, the higher the % to be applied because of maintenance and higher levies to be applied, the further away from the CBD, the higher the % applied and so on and so forth.

 

This is how I used to apply my calculations as an investor, real estate agent and property valuer for 25 years in the Sydney market, my primary method was always comparable sales within a given period, i.e. 3 months in a hot market, 6 in a normal market, also removing out of line sales, like inflated sales, inter-family related sales etc etc, whether this formula could be applied here, I don't know, but give it a whirl and let me know how you go, if you like.

 

Me personally, I wouldn't be buying in Thailand as I hear units/apartments/condos are a dim a dozen, if you are adamant you want in, I would suggest you rent to start with, you know, try before you buy, until you become more familiar with the market, buildings, demographics, sales evidence, and agents, and when you are ready to pounce, then you pounce.

 

Also forgot to mention but funandsuninbangkok mentioned it in an earlier post, buy into an established building, I don't know if you have them here, but in Oz you could order a strata report whereby for a couple of hundred bucks a company rep would go in and check the books to see where money has been spent, i.e. money in, money out (levies) and the history of the building, annual meetings, major repairs etc etc, last thing you want to be buying into is a "special levy" which was made at the last annual general meeting for 500,000 baht per unit for repairs to the cancer in the building, etc etc, that means as the new owner, you would be up for it.

 

As for new buildings, well do you know what your buying into, i.e. I remember valuing new ones back in Oz, not even having waterproof membranes down in the wet areas, no ones can see that because the tiling had gone down, and in some cases on the roof tops, then there was no undercoating on the main walls, just one thin layer of top coat, so when the builder shuts shop, where do you go, straight to the hip pocket. 

 

Most local agents tend to have a reputation, not the fly by night ones, and the more time you spend with them, you should be able to separate the snake, from the rat if that makes sense.  

 

Good Luck

Edited February 14, 2017 by 4MyEgo

[timendres]

Personally, I would never invest in property (condo) in Thailand. This will sound controversial, but in my mind, you simply cannot own property in Thailand. You may argue that you have a contract and proof of ownership. I will argue that a contract is nothing more than in invitation to go to court. Going to court in Thailand is an exercise in slow, agonizing suffocation.

 

That said, if you have money that you are willing to invest in high-risk/high-reward scenarios (in other words, you are willing to take a 100% loss), then I strongly recommend that you talk to a foreigner who has invested in, and managed, properties here for at least a few years. Listening to advice here demonstrates that you need to be separated from your money.

[trogers]

1 hour ago, 4MyEgo said:

Rental value x 12 months x 100/ the % you apply should give you what you want, e.g.

                                                                                                                                    15,000 per month rent x 12 months

                                                                                                                               = 180,000 baht/say 3% = 6,000,000 baht

 

This can be adjusted by the % you want to reflect to bring it in line with the market, e.g. 180,000 baht/ 4% = 4,500,000 baht

 

Other factors to be taken into consideration are the age of the building, i.e. the older, the higher the % to be applied because of maintenance and higher levies to be applied, the further away from the CBD, the higher the % applied and so on and so forth.

 

This is how I used to apply my calculations as an investor, real estate agent and property valuer for 25 years in the Sydney market, my primary method was always comparable sales within a given period, i.e. 3 months in a hot market, 6 in a normal market, also removing out of line sales, like inflated sales, inter-family related sales etc etc, whether this formula could be applied here, I don't know, but give it a whirl and let me know how you go, if you like.

 

Me personally, I wouldn't be buying in Thailand as I hear units/apartments/condos are a dim a dozen, if you are adamant you want in, I would suggest you rent to start with, you know, try before you buy, until you become more familiar with the market, buildings, demographics, sales evidence, and agents, and when you are ready to pounce, then you pounce.

 

Also forgot to mention but funandsuninbangkok mentioned it in an earlier post, buy into an established building, I don't know if you have them here, but in Oz you could order a strata report whereby for a couple of hundred bucks a company rep would go in and check the books to see where money has been spent, i.e. money in, money out (levies) and the history of the building, annual meetings, major repairs etc etc, last thing you want to be buying into is a "special levy" which was made at the last annual general meeting for 500,000 baht per unit for repairs to the cancer in the building, etc etc, that means as the new owner, you would be up for it.

 

As for new buildings, well do you know what your buying into, i.e. I remember valuing new ones back in Oz, not even having waterproof membranes down in the wet areas, no ones can see that because the tiling had gone down, and in some cases on the roof tops, then there was no undercoating on the main walls, just one thin layer of top coat, so when the builder shuts shop, where do you go, straight to the hip pocket. 

 

Most local agents tend to have a reputation, not the fly by night ones, and the more time you spend with them, you should be able to separate the snake, from the rat if that makes sense.  

 

Good Luck

There are two valuations that I make, one for new projects that developers still having substantial unsold stocks, and the other is the Investment method which you have highlighted, though, I would use a % return at 3% above AAA bonds to cover the added risk of illiquidity.

 

In new projects, we have only the asking prices of developers as a guide. Yet, logic dictates that these prices cannot be the real market prices as the presence of unsold stocks indicates these prices did not clear the market.

 

Thus, I use the level of unsold stock to derive a discount factor.

 

Valuation from the Investment method establishes a fundamental benchmark to check how much market prices deviate from it, and how inflated the bubble has become.

[Steiner]

On 2/8/2017 at 8:39 AM, patjk said:

Where are you getting the data that prices have come down?  

 

Good advice on the offers.  Right now I'm looking at the market but want to get access to more numbers - rental prices, sale prices, etc. but can't seem to find that info readily available online.

1/. This guy is talking nonsense,  property is a long term investment for Thais. 

Why would they give away 65% of the market value of a property that hasn't increased in value that much since purchase,  and that they probably have it mortgaged?  It isn't financially viable,  his comment is completely stupid. 

If they don't have it mortgaged and have the money to buy it outright,  they have no need to sell it quickly. 

Again he is talking rubbish. 

Just think about those figures,  they would give it to the bank instead of paying 65% of value. 

 

2/. Property prices have not fallen in the past year,  believe me,  it's my job! The last 18 months  has seen some increases that have surprised even me,  I haven't seen any  fall in prices. 

 

3/. Hip flat is pure nonsense and incredibly misleading,  stay away from it. 

 

4/. As a guide for rental values vs purchase price,  divide the purchase price by 1,000 and multiply by 5, you will be pretty close. 

Pm me if you want some help,  I have 11,000 owners in my database and years of experience in Bkk. 

We manage a lot of properties for rental that we helped purchase. 

[trogers]

26 minutes ago, Steiner said:

1/. This guy is talking nonsense,  property is a long term investment for Thais. 

Why would they give away 65% of the market value of a property that hasn't increased in value that much since purchase,  and that they probably have it mortgaged?  It isn't financially viable,  his comment is completely stupid. 

If they don't have it mortgaged and have the money to buy it outright,  they have no need to sell it quickly. 

Again he is talking rubbish. 

Just think about those figures,  they would give it to the bank instead of paying 65% of value. 

 

2/. Property prices have not fallen in the past year,  believe me,  it's my job! The last 18 months  has seen some increases that have surprised even me,  I haven't seen any  fall in prices. 

 

3/. Hip flat is pure nonsense and incredibly misleading,  stay away from it. 

 

4/. As a guide for rental values vs purchase price,  divide the purchase price by 1,000 and multiply by 5, you will be pretty close. 

Pm me if you want some help,  I have 11,000 owners in my database and years of experience in Bkk. 

We manage a lot of properties for rental that we helped purchase. 

Property prices of those who bought outright with cash had fallen when you take into consideration discounted prices of foreign sellers. The rich Thais can hang on for another decade.

 

Property prices would have fallen when you take into consideration those properties that are in the process of foreclosure or being auctioned off. These would not appear on your database...

 

And property prices would have fallen when developers offer discounts in form of money or add ons to clear unsold stocks.

Edited February 14, 2017 by trogers

[funandsuninbangkok]

4 hours ago, Steiner said:

1/. This guy is talking nonsense,  property is a long term investment for Thais. 

Why would they give away 65% of the market value of a property that hasn't increased in value that much since purchase,  and that they probably have it mortgaged?  It isn't financially viable,  his comment is completely stupid. 

If they don't have it mortgaged and have the money to buy it outright,  they have no need to sell it quickly. 

Again he is talking rubbish. 

Just think about those figures,  they would give it to the bank instead of paying 65% of value. 

 

2/. Property prices have not fallen in the past year,  believe me,  it's my job! The last 18 months  has seen some increases that have surprised even me,  I haven't seen any  fall in prices. 

 

3/. Hip flat is pure nonsense and incredibly misleading,  stay away from it. 

 

4/. As a guide for rental values vs purchase price,  divide the purchase price by 1,000 and multiply by 5, you will be pretty close. 

Pm me if you want some help,  I have 11,000 owners in my database and years of experience in Bkk. 

We manage a lot of properties for rental that we helped purchase. 

Resale Sales- market is frozen up. Same crap listed by multiple agents. Nothing moving. Check ddproperty. Thousands of listings. Ridiculous 

 

new projects - CBRE most recent analysis projects on Sukhumvit due to be finished 2018 at less than 30% reserved. 

 

Rentals - cbre rents same as 2007

 

banks bad loans up 100% in last year. Massive credit crunch. 

 

Interest rates headded up

 

Thai exports down

 

hot summer comin'

 

wait for the storm, then buy

[blackcab]

On 08/02/2017 at 1:24 PM, funandsuninbangkok said:

Be patient. Current political situation not great. Songkran will be a bumpy ride and sellers will cave in. 

 

Buyers market starting in May. 

 

I asked before but got no reply from you.

 

What sort of percentage reductions do you envisage?