thai housing market in decline

[Jockey]

It's definitely a buyers market. The asking prices remain the same, but buyers should be haggling for a bargain under this property climate. My advice is to offer as much as 15% below the asking price (if you really want to buy it), and expect a compromise of about 10% reduction.

[Mack111]

think you've got that wrong way round, Thai Baht has got stronger not dipped, if its now 63 Baht to the pound that means you will need a whole heap more money to buy just now from when it was 70...(thats if you deal in pounds of course) when i paid teh last installment on my house it was 75 Baht to the pound, its makes a lot of difference when you talking about a few million Baht for a house

[JimmyGreaves]

Not actually as low as 64 but going that way:

TT Figure today from SCB = BRITISH POUND STERLING 67.94875 and yes an extra baht makes alot of difference on a big ticket buy like a house or car.

There are pleny of Thais out there looking for land/house at the moment and still am hearing stories of high prices.

[lockwood74]

I have been watching the sales of houses in 2 projects near to Khoa Hin lek Fai in the last 6 months, sales at :


1. Hua Hin Horizon

2. Hua Hin Grand Hill

sales at these have been stagnant. Sales in the period from easter to christmas in 2006 were brisk.

john

[buksida]

If the market is in decline why are the prices still so high? Shouldn't they start to fall to reflect market status?

If you're not bringing money from overseas it makes no odds what the exchange rate is.

[Guess]

If the market is in decline why are the prices still so high? Shouldn't they start to fall to reflect market status?

If you're not bringing money from overseas it makes no odds what the exchange rate is.

My understanding is that although consumer confidence has been waining since this time last year, it is only very recently that the announcement regarding house prices has appeared in the press. The recent news regarding TRT, Thaksin and the future of goverment must have an effect nationwide.

I don't believe the foreign sector of the housing market really makes much impact in the overall picture but in some areas like Hua Hin and Phuket is much more of a factor and will probably have an effect which will be exacerbated by the strong Baht.

If the situation remains and the housing market does not pick up I would expect to see some reflection in the house prices everywhere. Just sitting on the property and waiting may not be a viable option anymore if the investment needs constant returns. You might be better off selling cheap and putting the money into Forex or stock.

Of course none of that would apply if the house is your first home which I imagine is still the majority case in Thailand. It is then just a simple equation between mortgage repayments and rent. At the moment a medium to long term requirement is better with a purchase. What the Thais need to see to regain confidence is economic stability. We don't have that yet.

[lockwood74]

In the Uk we are bombarded with house price statistics and trends, do the Thai authorities have similar agencies that provide these stats.

If not how can we presume what is going on........ Does the land registry make their figures freely available

John

[caller]

John,

I don't think any stats are available and I'm not sure I'd trust them if they were!

Two (not new build) properties I looked at apprx. this time last year are both still on the market at the same price as when I looked.

I have read here that its not uncommon for places to be left unsold. That the owners would rather wait for the price they want, rather than do something to get a sell?

[Big Boy]

caller wrote:

I have read here that its not uncommon for places to be left unsold. That the owners would rather wait for the price they want, rather than do something to get a sell?

There will always be a lot of outside influences eg how much they need the money, why are they selling etc.

While I agree that some may be in the position to wait, there will be as many who can't.

I'm not in the market (at least not in the physical passing of cash part) just yet, but we have been offered several properties at knock down prices (when compared to Estate Agents) during previous visits. Of course, its been a quick no thank you without undertaking any further investigation - the properties could have been falling down for all we knew.

[Guess]

John,

I don't think any stats are available and I'm not sure I'd trust them if they were!

Stats are produced by Land Registry but I'm not sure of their status. I.e are they publicly available or strictly internal use only. I am not even sure that they record the stated transfer price, but as you say you could not trust them here anyway so it would be impossible to use them for accurate house price assessment.

One thing that is recorded is the names on the title deeds (chanooks) along with ID card/ passport copies. It is therefore quite easy for someone with access to the figures to be able to assess the nationality and/or the ethnic group the owners fall into. Even if these records are not available publicly I am sure they can be bought at least by journalists.

Anyway the URL below points to quite a good regular update of the Thai economy as a whole.

http://www.bot.or.th/BOTHomepage/BankAt ... _eng_i.asp

[Mack111]

normally when stocks and shares are all over the place like they are just now people put money in property, if the stock market was rock solid for a decent period of time you might see a decrease in house prices but it takes time for the cycle to filter down to the normal people like us to see any upturn or down turn in housing markets.

I personally don't think you will see a big downturn in the housing market in Thailand, mainly due to the Asian region as a whole doing well just now. sure you might see a stagnant period like now in the housing market but I don't think you will see a crash, us Falangs who reside in HH (me only part time I must admit) are only the tip of the iceberg, what I've noticed lately is the big marketing campaigns in India / China / Korea for Thai property's

The only thing I think would crash the market in Thailand is if the government gets into a real problem which might happen but unless that happens I think you will just see a stagnant market for a while

[lockwood74]

Some interesting posts here.

I think the housing market at the top end 7 mill plus has definately seen a slowdown. This could be due to the fact that this market in holiday resort areas is predominantly driven by foreign investment.

In the coming years, when the Thai government stabilises, I believe that we will see future investment coming from other countries outside Europe.
If you look at the size of the market for countries like China and India, they make the European buyers appear small in number.

If I am correct, the size of this demand and change in the type of buyer will lift property prices much much higher. There are currently some very wealthy people emerging from the Asian countries and they will want a slice of the holiday homes market in the near futuere.

Places like Hua Hin will be an attractive destination for the buyer

john

[caller]

John

Open question - why do you perceive Hua Hin as attractive to buyers from other parts of Asia, compared to say other regions of Thailand or other countries?

I assume they would have all the same issues about ownsership and from what wed're hearing, other countries, such as Malaysia, already seem to be eyeing this market in a more attractive and tempting way?

[lockwood74]

Hi

The reason why Hua Hin or any other costal town will expand is because there is a limited supply of coast line in the world.

They are not making any more coast line , with the exception of Dubai.

Once the supply runs out prices will rise.

As far as other countries are concerned, I am sure that buyers will be flocking there as well.

Foreign buyers are attracted to the cost of living in tHailand as well

[DaveT]

Hi

The reason why Hua Hin or any other costal town will expand is because there is a limited supply of coast line in the world.

They are not making any more coast line , with the exception of Dubai.

Once the supply runs out prices will rise.

As far as other countries are concerned, I am sure that buyers will be flocking there as well.

Foreign buyers are attracted to the cost of living in tHailand as well

Hope I'm not being too nosey, but your footer says you've bought a plot of land, house under construction.

How did you achieve this? Through the company route?

Feel free to tell me to mind my own business if that's an intrusive question, but I do want to buy in HH and just want to safeguard myself as much as that is possible in Thailand.