low cost housing for thais

[Guess]

Guess wrote:
I have a Degree in Business Studies along with other technical qualifications.

Guess, I hope you’ve got no qualifications in I.T., otherwise you would have got yourself a new keyboard by now!

As cockneyrebel has pointed out already it's not the keyboard it's my fingers. They are like sows nipples. What I need is a finger transplant.

PS. What is wrong with my keyboard anyway. At least my shift key works.

[Guess]

....it seems to me that you both have arrived at a similar juncture in this debate, neither is wrong or right, but who knows what the future has in store for expat or Thai alike. Investment is what you think it is. What risk are you prepared to take?

Good debate chaps, keep it up.

Hence my comment earlier regarding "going round in a circle". Somehow, and I do not want to re-read the whole thread again, we got onto the subject of investment.

Lets face it, in the vast majority of cases all over the world (maybe not the Igloo market for Eskimos or the mud huts for sub Saharan Aficans), the original construction was done for business purposes. People buying land and building a house for themselves is just an account from the history books nowadays or a dreamers dream come true.

Therefore it was natural that the thread progressed to investment and it was sargeant himself that first moved in that direction with "pjg i thought they were but 10 units is hardly gonna cover the shortfall".

But as I said I am well au fait with investment and risk analysis etc etc.

What the question is now is how are children who are 14 and 15 going to get on the housing ladder (presumably that means here in Hua Hin).

Burger has already answered that one quite clearly.

'Thai housing ladder' ...... are you serious sarge ?
The thought that children with a farang parent will not be able to obtain any kind of suitable property within Hua Hin and the surrounding area (ok, maybe not the centre of town), seems laughable to me.

Will you not be providing them with an education that allows them to get a decent career/salary ?
If you are, good on you, they will be fine.
If you're not, take a look in the mirror.

whinge, whinge, whinge, whinge, whinge

At current rates a mortgage will cost about 4% (or it was last year when I tried to get one). That makes the interest repayments at about 6,000 baht per month for a 1.5 million baht house which can get you on the ladder in down town Hua Hin even if the couple both work at 7/11. Get out a bit towards Pran Buri or up towards the by-pass you can get a place for 750,000. At first people when they are young have to go through the renting the odd room, maintaining property themselves and the odd week living on fried rice, but compare it to London.

Lets take North End Road for example in the chepaer middle section where you be next door to a council housing estate. A one bedroom flat over a shop is going to set you back 250,000 pounds. At 6% interest only plans, you are looking at monthly repayments of about 2,500 pounds per month. To get the mortgage without deposit you would need a joint salary of about 80,000 pounds per year. Now how many couples can get on that ladder.

This is not just true of London. It has spread all over the country and to much of the Western World. Jaime will be able to give you a better idea of prices and wages to expect as an ex-grad with a couple of years work experience in South Wales. I think you will find it is a serious challenge.

Here in Hua Hin what you have described seems laughable as Burger has already said. At least here you have the choice of starting off somwhere cheaper and commuting a few kilometres until you can move up market. In Western economies you can not get on the first rung to start with.

[sargeant]

Dawn thank you for your post firstly because i was beginning to think i was a lone voice worrying about the thais i expected more people with thai kids to join. I also worry for the likes of us that will still be here after all the grab it and bugger the consequences run and bugger of and leave us in a mess. I think that is still a way down the track thank god
but it is always better to spot a potential problem discuss it and try to deal with it early, Ostriches always get kicked in the @rse eventually.
I also come from a rather strange tradition of when a guest in someones house you should consider them first and dont be surprised if they toss you out on your @rse if you dont, sorry folks just silly stupid ole me
Thanks for the lesson on abbreviations by the way
Guess On another thread i explain how i got my mortgage for my girl one and a half years ago borrowed 800,000 mortgage 6000 a month deposit 100,000 please please enlighten me where I can borrow 1.5 mill for 6000 a month oh and 9 years ago my house in bangkwai was 17000 a month for a loan of 1.9 mill
thai average salary 7000 a month a n others figures another thread means even if the thai could save 2000 a month it will take him 50 month to save a deposit whoops before another lecture on maths it went up to 120,000 in 18months 60 months whoops in 60 months god knows
the problem is down the track
lastly i aint daft 10 lonely little units aint gonna cut it but 10X10 little nest earners (ten small longer term investors) is 100 units still not enough but a start
burgher i refer you to the above. yes i sent my 22 year old daughter back to high school and i will do my best for both my stepkids but what about the thai parents who are trying to save 2000 baht a month to get on the ladder
i still havent got out to looksee yet to wet and now my sis is here so it will be a little while i am still encouraged by the info i have been given on this thread from the guys and dawn pointing me in the places to look
I respect experience i never met a 2nd leutenant complete with a degree that could piss straight let alone tie his own shoelaces mind you they could quote their degrees ad nauseum until some ira guy shot at them apparrently that wasnt in the degree curriculum

[Wanderlust]

It seems to me that us farangs are trying to impose our way of doing things on the Thais, when they are quite happy with the way things are (or were). I remember when I first came here a long term expat told me that the Thais will spend more on their car than they would ever dream of spending on a house, and the vast majority rent their places in the towns and cities, often only a room and bathroom, while up country they will have the bits of land that have been handed down and live in wooden shacks. The property ladder just doesn't exist in the same way as it does in the UK or elsewhere (although I believe in certain parts of Europe the vast majority also rent rather than buy), and to be honest I can't see how it can be sustained in those countries; I firmly believe that another house price crash is going to happen in the next 2 years in the UK. I can understand the concerns of farang parents here but who knows what those children will want when they are old enough to make that kind of decision? If they are anything like their parents they may well be globetrotting, looking for the 'perfect' place to live! Or they may just live with the parents until they expire and then take over the house! Although the concerns about whether there is enough housing for Thais in Hua Hin are genuine, I think the problem is being over stated; the market will normally work to meet demand.

[Guess]

A good summary by wanderlust.

Things are different here in Thailand and many other countries in the World. In my experience with many Thai families, (maybe not exactly a random and large enough sample I know), that is land is gradually split through generations and house are built on the land when required. My in-laws have about ten or fifteen houses now whereas the land owned by the same family one hundred years ago only had one house and maybe a couple of sheds for the plantation workers. This is affluent Thai landed class though. I have seen similar in Isan though it is just that the houses are not so big and not so well built and as wanderlust says the motorcycle and the truck (plus of course that essential piece of kit, the cell phone) will always come before the house. I have seen many cases in Isan where the truck is worth more than the house.

The loan figures were based on a quote I was give by K-Bank (Thai Farmers Bank) about 18 months ago. I appreciate that interest rates may have increased since then. From memory I think the rate quoted was 4.25%.

As for locale, you are quoting two of the most expensive places in Thailand, i.e. Hua Hin and Bangkok. Both have had high housing cost rises for two completely different economic reasons. Firstly The ex-pat retiree population coupled with the ideal location for the Thai executive with enough cash for a second holiday or weekend home with the addition of the local nouveau riche (who have more interest than any to increase house and land prices in Huia Hin., have all added to the rising costs in Hua Hin.

In Bangkok I believe it is more a case of the signs of a rapidly developing economy. This is something that the new government will need to watch very closely. If salaries rise too much, Thailand may become a country where it is no longer viable to produce goods and large international corporates could move elsewhere. The phenonemon has being going on for years especially in the motor car and electronics industries. Currently Thailand is flavour of the month but that does not have to remain that way if economics dictate not.

To summarise the main points that have shown up in this thread so far:

Water finds its own level. Prices can generally rise only to an amount that people can afford to pay. If prices are raised by artificial means, like they were in the UK in 1989 then slump is possible.

If Hua Hin is too expensive why attempt to live here. A mere 15 KM motorcycle ride will take you to much cheaper housing.

There is plenty of cheap Thai housing being built in Hua Hin you just have to look for it. You won't find it advertised in the Observer.

I totaly agree with the 2nd leutenant statement. That is why they are 2nd leutenants. I fail to see what relevance it has on the housing prices in Hua Hin though, but I am only a simple chap.

Anyway Khun Bilko I am glad to see that you have found the Shift Key at last and have discovered the difference between it and the Caps Lock Key. Perhaps we can move onto intermediate punctuation now such as commas and correct positioning of periods followed by the obligatory First capital of the new sentence.

I will schedule lessons on advanced punctuation after Christmas. There are many exiting things to learn such as question marks, exclamation marks and the oft misunderstood subtle difference between the colon and semi colon neither of which BTW have anything whatsoever to do with the anal region.

[sargeant]

ok sister and fam had a great time and back in aberaeron.
Did a lot of running around and got to see a lot of buildings of the type i have been talking about so thanks to those who pointed them out.
It now depends on rents but as guess says they will find their own level in time.
I am however more hopefull but still concerned only time will tell.
The strict application of coy law and visa law may also dent the rocketing prices and give some time for dust to settle

Just to reitterate guess are you sure you were offered 1.5million baht at 6,000 baht per month I spell six thousand baht per month
16,000 is about corrct for 18 months ago as i have said my mortgage 18 months ago is 6,000 a month for 700,000
I agree that rising wages will hurt the thai economy (in particular poor thais) why do you think i was worried in the first place the quickest way is for rents and housing to rocket (for artificial reasons ie ex pat Retirees)no degree in that just plain 60 years of common sense.Hence this thread.

Glad you agreed with the 2nd Lt analagy correct nothing to do with house prices so i will spell it out your degree quoted to me by your goodself doesnt cut anything with me at all sorry. 22 years of 2nd Lts quoting theirs did the job juuuust fine.

As for punctuation got no degree dont want one and dont need lessons and as most of my time is pent on messanger where u dont even spell all the words which unfortunately will become the english of the future i reckon i am real kooland in the lead.

To no one in particular but seems to me the ostriches of Hua Hin are thriving------------- so far

[Guess]

Just to reitterate guess are you sure you were offered 1.5million baht at 6,000 baht per month I spell six thousand baht per month
16,000 is about corrct for 18 months ago as i have said my mortgage 18 months ago is 6,000 a month for 700,000

OK f**k the punctuation and spellink get yerself a calculater. How does 6000 per month for 700,000 equate to 16,000 for 1,500,000.

[sargeant]

guess
Fact 18 months ago my girl took out a mortgage for 700,000 baht(because i couldnt)
Fact it is costing her 6,000 baht a month (I know I am paying it ).
Fact it is over 25 years.

According to your goodself 18 months ago you found a bank which was operating at an interest rate fifty percent lower than the Siam commercial and the Bank of Ayudaya were at that time, we tried tried both as they are our personel banks.

In my experience banks all over the world are just cartels and to get a cigarette paper between interest rates is next to impossible now i dont know how many years this loan was to be over which would have a bearing on it

. I dont need a calculator i can do it in my head. I would like to know if they made a mistake because there is something not right somewhere

I only make a querie why such angst

p.s. when i asked for a loan (Joking at the time) i was told (cannot lend to Falangs )
P.P.s I gratefully accept your version of spellink and will alter my version spelling to yours

[sargeant]

guess as i had a few spare minutes twixt beers i took your advice and partook of a calculator.

1,500,000 loan
Annual interest @4.5% =67,500
Monthly interest payment =5,625
with a payment of 6,000 a month that pays 375 a month of the capital loan
1,500,000 divided by 375 = 4,000 months divided by 12 months a year means 333.333 years

i dont friggin think so, methuzalah didnt live that long

now if you take your calculator ,degree and all your financial experience and work out my girls mortgage as stated in previous posts you will find with help that it works out exactely this loan was taken out on 1st feb 2005
a little over 18 months ago

Just a small aside there are 5 falangs who over a jug last night are all under the same delusion that under thai law banks are not allowed to loan money to falangs

I have tried to maintain this thread in a gentlemanly manner and when told of places to look i have and came back and said so i have also had the decency to take up calculator and work it out
i hope it can be maintained that way

[Guess]

guess as i had a few spare minutes twixt beers i took your advice and partook of a calculator.

1,500,000 loan
Annual interest @4.5% =67,500
Monthly interest payment =5,625
with a payment of 6,000 a month that pays 375 a month of the capital loan
1,500,000 divided by 375 = 4,000 months divided by 12 months a year means 333.333 years

OK now we a comparing apples with apples.

Firstly that rate (18 months) ago seems high but I am aware that rates have gone up and possibly quite dramaitically between my quotation and yours. Also in Thailand there is a habit of making a low quote verballly to get you hooked and then sell you something more expensive.

As for your figures, above you got off to a good start but forgot to consider that the measly 375 per month would only be for the very first payment.

As you have stated there are two elements at least to the repayment.

They are the interest accrued during a period (this is where Western Banks are adept at stitching people up) and the capital repayment.

Additionally there really should be a life insurance portion which covers you in the event of the motgagee dying and the inheritors picking up the tab. In healthy market I would argue that that in unnecessry as the value of the house will be greter and there will be adequate equity anyway. There is sometimes a fourth element of mortgage indemnity. This covers the unlikely event (but it happened in 1989 inn the UK) of house values decreasing loan outstanding becoming greater than the value of the property. I.e negative equity. The bank is then exposed and many have the out and out cheek to expect the mortgagee to pay insurance for their risk.

If we just consider the first two portions then gradually the capital repayment portion reduces the outstanding debt. Ther fore the differential changes so the next month the capital repayment will be 338 for example.

This change is tiny for the first ten years but gradually gets larger and larger until after 20 years nearly all of your 6,000 baht per month is capital repayment. This reduces the payment length of repayment significantly. I nhave not worked tour example out but there are functions in Excel that do it for you if you want to try.

The other major isuue is mortgae type. As I said the rate of 4.5% seems well high but if that rate is fixed for a lengthy periods then it makes a lot more sense. What it means is that if the interest rate doubles, trebles or even quadruples as it has done before in many countries you still continue to pay the agreed rate of interest. It is a calculated risk done by the bank and can often save you money. I believe this type of loan is common in Thailand and maybe that is what your lady friend got. If the loan is for a property that is to become your long term place of residence it makes perfect sense to take a fixed rate mortgage out even if at the begining you are paying 2 points over the odds. You could easily save a lot more than you put in.

[sargeant]

guess I agree the thais make low quotes for a come on (Jeez dont they ever but) which means it is not a serious quote now is it.Which is exactley why even though of topic i called you to task.
1.5 mil at 6000 a month is a ludicrousley low quote and you should have with your quals known it. It is the fact that you quoted it, at which i take issue.

Of course i know that as a mortgage goes longer more of the monthly payment is paying of more capital ive had 5 mortgages in my life i know how they work but i have in my 59 years never heard of a loan or mortgage longer than 25 years and 1.5 mil @4.5% 6000 a month works out well over 30 years.

My mortgage is 4.5% Fixed and is a slightly higher rate for that very reason.

The reason for taking this isssue to task is, somebody out there reading it may be thinking he can come here and get the same sort of loan and he cant full stop it is as far as i know illegal under thai law for banks to loan to foriegners.

I am presuming from a previous post of yours that the loan may have been made to your Thai wife / partner as with me, and you just fell into the same mistake i keep making of saying my mortgage my loan because im the one thats paying it

I hope that puts this subject to bed

I started this thread with the tin shack population in mind
I still hear the rumblings of discontent from a small few of my thai friends and hope it wont grow

I think this thread for me is virtually closed thanks to the guys and gal that pointed me in the right direction i do feel more hopefull but i am still concerned mainly by the rocketing ludicrous prices here in hu hin

Lastly as a guest in thailand i will always consider them first in all that i do here. I also think the falang pop would do itself a better service if more of us did the same

p.s. guess please tell me how to cut and paste quotes from other posts

[STEVE G]

Going back to the original thread, one point to take into consideration is that the reason so many Thais live in Hua Hin, and need cheaper housing is because of all the jobs created by the tourist industry, which are comparatively well paid.
If tourism had never come here, and it goes back to the 1920’s, it would still be a sleepy fishing village, and houses would be very cheap.

[Jaime]

Going back to the original thread, one point to take into consideration is that the reason so many Thais live in Hua Hin, and need cheaper housing is because of all the jobs created by the tourist industry, which are comparatively well paid.
If tourism had never come here, and it goes back to the 1920’s, it would still be a sleepy fishing village, and houses would be very cheap.

Exactamundo!

[sargeant]

JD and Jaime totally agree my fear was that the property developers were headlong full tilt bungalow crazy chasing the falang money.
And not worrying about the working thais .
happily as i said in previous posts the people pointed some out i went out and looked for myself and i am far more hopefull now than i was when i started this thread.
I am still concerned at the pace of prices and rents though.
but as guess says rents and wages will eventually settle and maybe the visa / coy law crackdown will give a respite for a while and we can all take a breath.
One last point when i came here 9 years ago it was a pretty sleepy little town it has exploded in the last 2/3 years

[JD]

JD and Jaime totally agree my fear was that the property developers were headlong full tilt bungalow crazy chasing the falang money.
And not worrying about the working thais .

I beg your ever so pudding!!! JD agrees with what?

I don’t what you’ve been reading mate, but I suggest you put your glasses on, re-read whatever it was, then take your ‘fishing’ hat off and put your thinking hat on, (that’ll be the one with ‘85’ on the front in case you’re confused), and stop attributing my name, as agreeing to your ideas on this debate.

I’ve never totally agreed with any post you’ve made, or made any comment likewise. I don't know you, who you are, what you're about. The above statement has nothing to do with my personal feelings about property in Thailand.