Property prices

[kendo]

Here in the U.K the property market has stagnated, and now has ground to a halt, there are for sale signs everywhere but no buyers.
My house has been on the market for 3 months and i have had very little activity,my agent reconds the very few buyers there are out there, are putting in stupid offers 20-30 k under the asking price and people are excepting these offers just to get moved.
House prices are falling month after month in the U.K and it is predicted that repossessions will be up by 40% on last year,things are looking grim,all you see on the media is the topics credit crunch and the price of fuel what is £1:30 a litre.
What i would like to know has this started to effect the real estate market in HH, and if i look at houses online you never really see any price reductions,is there a genral ammount that people expect to be negotiated down to, or is this a very individual thing, i think with the state of the economy people are going to be looking for a hard bargain, your comments please.

[niggle]

I think prices here holding steady at the moment

[Jockey]

if i look at houses online you never really see any price reductions,

This is because hardly anyone ever pays the full asking price for a 2nd hand house. Prices are negotiated. Developers will tend not to reduce prices for new builds but may add incentives (such as upgrades to tiles etc.) In my experience, currently, most 2nd hand houses which are selling do so if they are unique in some way, or the price has been dropped significantly. Home owners in Hua Hin (IMO) tend to value their properties higher than the real market.

On the other hand I was reading in the Bangkok post construction costs have increased by 30% over the last 2 years, so the profit margins for developers are getting squeezed and prices may be forced up!

Condo prices are holding steady, but even there, asking prices for 2nd
hand condos are rarely met.

Unlike the UK - there is no National Database of what price each piece of property was actually sold for, so the asking price in reality is not a true reflection of the actual sales price. This makes it harder to value property over here.

Another thing - some people put their house on the market thinking "I know my house is only worth 7 million, but I'll put it on for 10 million in case I get lucky. Real Estate agents usually have no charge for no sell. A neighbour looks at the advert of a similar house to his and thinks "Wow - they're selling my neighbours house for 10 million. I think I'll sell mine too for that price!" And so it goes on - some houses go on sale for years - some sell immediately if the price is low or the property is unique in some way.

Hope that helps

[sandman67]

Thanks for that Jockey - good reply mate

was anyone here in 1997 when the Asian market collapsed? What happened to local house/land prices then?

[caller]

Hua Hin Laguna have a new price list, cheaper than posted on the intgernet. But I think there's better around than whats there. I was told they haven't started marketing/building the new/bigger houses planned (by the clubhouse pool) as "the time is not right."

Ex-pat homes in Spain are also affected by the crunch according to a report I read the other day.

[kendo]

Jocky thankyou for that info, i dont want this to seem like "how long is a piece of string qestion" but when you say that 2nd hand houses prices, hardly any achive the asking price and the one's that are selling because they may have been dropped significantly,is there an average percentage that vendors expect to be Knocked down to.
The reason i am intrested in this,is that if i decide to come to HH permanantly i look at what i can get for my money and wot me and the wife can do for a business its just really a qestion of doing our homework and some very hard thinking.

[chelsea]

Jockey with all the doom and gloom posted on here re problems with developers and some shoddy workmanship of new propertys, I am supprised that established house prices are not a lot stronger than you are saying.

Personally if I was to buy a property in HH and were able to talk with the previous owners regarding the well published problems that have been extensivly covered in other posts. I think I would feel a lot safer to buy one of those properties over a new one.

I also think a close to the beach & town Condo would be the way to go. Again perhaps an established one would be the way to go.
Are there any pitfalls in buying an established Condo that one should be wary of instead of a new one.

I am not in the market, but am interested in your comments on new against established properties and why more expats do not go for the established homes.

I know in Australia, new developments are aimed at the newly married young family groups.

I know that is not the norm over in HH, but I would think that most older expats in their own countries would buy established over new, so as to avoid neighborhoods of screaming kids, so I am curious on the reverse thinking when it come to real estate purchases in HH

[Jockey]

Chelsea - very good post and pertinent questions. Before I answer I want to point out I have experience of the market and I'm currently involved, but I am just an ordinary punter who has opinions, like anyone else, I'm not an expert (if such a person exists) and I'm sure others involved in the property market over here will have different opinions.

you said "all the doom and gloom posted on here re problems with developers and some shoddy workmanship of new propertys, I am surprised that established house prices are not a lot stronger than you are saying".

I agree with your sentiment Chelsea, but you have to remember, most "new buyers are not avid readers of HHAD or have even heard of HHAD (despite what the owner of this website may claim ) and so you have "dizzy tourists and single men in mid-life-crisis being lured by glossy magazine adverts and computer graphic simulations promising eternal bliss for only 100,000 thb deposit.

You said "Personally if I was to buy a property in HH and were able to talk with the previous owners regarding the well published problems that have been extensivly covered in other posts. I think I would feel a lot safer to buy one of those properties over a new one". I agree! But you have to remember the agents who try to persuade you what to buy are on huge commission for new builds (5% to 10%) and we don't need to do as much work selling new builds than 2nd hand homes where we have to take more care and get involved more with sales agreement contracts etc.

You said "I also think a close to the beach & town Condo would be the way to go". I agree with you again although prices are at a premium for beach and town centre property. Why anyone would want to travel 15 km over road pot holes and rivers to buy 18 million baht houses amazes me (but the glossy adverts make them look appealing)

You asked "Are there any pitfalls in buying an established Condo that one should be wary of instead of a new one". Buying a 2nd hand condo is (IMO) the safest way to buy property for a foreigner in Thailand. For investment puposes make sure it is a beach condo, the building is well maintained, it has good views, loads of facilities, pleasant juristic staff and the maintenance fees are not too high (anything over 30 baht per square metre per month is high).

An interesting statistic in the Hua Hin and Cha Am area is that by far more houses are sold to foreigners than condos, whereas Phuket, Pattaya, Bangkok and even Chang Mai have more condo buyers than house buyers. That is something that I think will change over time, in that foreigners will realise condos are a safer and better buy unless foreign ownership land laws change in favour of foreign ownership or longer leases.

[Jockey]

is there an average percentage that vendors expect to be Knocked down to.

Quick answer Kendo ... No! (Its up to how brassed neck you can be!)

[kendo]

Jockey i think the house vs condo comment, is a true reflection on HH CA not being to spoilt, and is more up market than other places thats why people think nice place to retire, or live the dream, kids or grand kids running around the garden.If you look at the price of condo's in Pattaya any middle aged mug can buy one for the price of a crap car in the U.K and then he thinks he's gods gift you can see why condos in some places are in such an abundance.I think that HH is such a lovely place i want to be sat on a terrace drinking beer or sat in the garden just enjoying the out doors.
my next qestion is, and "this is aimed at all real estate agents" do you think that the HH housing market rides on the back of the european economys, if things are good in euroland, then your market will do very well on the back of it.
The state of the U.K economy is very worrying, all the truckers have started there fuel protests again, the price of food and fuel are going up daily, at home it's just me and the wife, our food bill has gone up £40.00 a month and i am using another £80.00 a month in fuel, my wife works in a large food pub,and we can see there is less disposable income its getting more empty early evenings with the tea time trade,i just hope this is not the start of resession, that will affect everyone our credit crunch is a direct result of poor lending in the U.S market and we are paying the price for that.

[norm]

Kendo
For starters I think HH and Cha Am area is really great to live in. I did live at Palm Hills golf course for about a year and really enjoyed it. That was in a rental, and while rentals do have some advantages to me it never felt like home as I could not do things to make it suit our style of living better.

We were going to build on Palm Hills but the ownership problem shut us off on doing that. Should mention my wife is also farang so buying a house becomes very complex.

We found a used condo on the beach in Cha Am (that we have a chanote for) that seemed like it would work for us. It was 10 years old but had never been lived in and did not have a kitchen. Well to make a long story short we bought it and extensively remodeled it. Not so much because it needed it but we wanted it to suit our lifestyle better. The remodeling experience was very good, the builder was Thai and did a great job.

We have been living in the condo since Oct. and truly do enjoy it, the beach is great the area has lots of restaurants within walking distance and have no complaints at all. If you do your homework you can find some really nice places to live in the HH Cha Am area.

I'm still thankful that we did not build a new house as we had originally planned. The potential for problems is a bit overwhelming. Buy existing that is in good shape and fullfills the criteria Jockey pointed out and you can enjoy a very nice lifestyle, with friendly people. Good luck in your selection.

[Super Joe]

Chelsea wrote:

"all the doom and gloom posted on here re problems with developers and some shoddy workmanship of new propertys, I am surprised that established house prices are not a lot stronger than you are saying".

As Jockey said not many of the buyers out there have been on HHAD, thankfully, before they buy. Some become members afterwards. The opinion of buying property on here, is a far more negative view than the reality, there's tons of good development around that do not have problem and the agents take customers there. For instance I personally know several members on here who have bought and are happy, but have posted about it. When people speak to people in real life about it you speak to the 20 happy ones for every 1 unhappy one (or whatever the ratio is), also buyers now will speak to other residents, again if a decent developer you'll get the appropriate feed back.
Also about a third of the buyers are Skandi's and other Europeans, who do not come on HHAD, probably due to the language barrier.

IMO new builds are the most popular by a long way still, think it's mostly to do with people never having had a brand new house before, and they like the idea. Also they can part design it to their own tastes, internal finishes, larger pools and patios, kitchen upgrades etc.
Regarding prices, I'm not sure on the less popular/slower selling projects whether they are offering price reductions to boost sales, but on the more popular developments prices are still increasing. Developers do now include more in the house, as Jockey said in earlier thread, ie: more a/c's, furniture deals, ovens/fridges, more generous land plots, bigger discounts when pushed etc. So effectively that is a form of discount.

I know next to nought about condos, but am i right in thinking they're more popular in places like Bangkok, Phuket because of land scarcity there which makes house prices high in relation to condos. Whereas here houses are a good deal, relative to the condo prices ?

All the above is just my impressions, real estate agents would know better as they are involved across the board.

Good luck,

[norm]

A few observations about house and condo prices in the area. I agree with super Joe that you do get more house for your money than you get for a condo.

However when you take location into consideration then I think the condo will be the better buy. If you want to be on the beach or a farang style development like Palm Hills I think you will find the house prices extremely high. . If you want to live in a house right on the beach you better have a fat bank account. In palm hills they have some homes up to 75,000,000Baht.

If you don't mind living a few kilometers from the beach or from town in a development that you have to drive to go anywhere then the prices are certainly less than you would pay for a condo in a more desireable location. I guess my point is you can't just look at square metres per baht. You also have to consider location and the amenities that come with it. But to each his own, some would prefer to be out in the countryside, some would like to be near town, some the beach and some the golf course. Then I guess some don't care to much they just want the most house they can get for the money and location dosen't matter.

So you really do need to look around a lot to discover where and how you want to spend your time, and your money. So there is no easy answer.

[holmes]

Here in the U.K the property market has stagnated, and now has ground to a halt, there are for sale signs everywhere but no buyers.
My house has been on the market for 3 months and i have had very little activity,my agent reconds the very few buyers there are out there, are putting in stupid offers 20-30 k under the asking price and people are excepting these offers just to get moved.
House prices are falling month after month in the U.K and it is predicted that repossessions will be up by 40% on last year,things are looking grim,all you see on the media is the topics credit crunch and the price of fuel wot is £1:30 a litre.
Wot i would like to know has this started to effect the real estate market in HH, and if i look at houses online you never really see any price reductions,is there a genral ammount that people expect to be negotiated down to, or is this a very individual thing, i think with the state of the economy people are going to be looking for a hard bargain, your comments please.

In the UK the market starting to collapse already .

[norm]

For starters I'm not in the real estate business so these are just my impressions of the market in LOS right now. The prices are pretty much holding but there are few transactions taking place. The Thais are very very slow to reduce prices.

Houses are much slower moving than condos. This is due to the ownership laws.